Putnam
New
Opportunities
Fund
[Artwork]
ANNUAL REPORT
June 30, 1994
[Putnam Logo]
Boston * London * Tokyo
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PERFORMANCE HIGHLIGHTS
The fund has earned Morningstar's highest ranking of five stars, based on risk-
adjusted performance through June 30, 1994, a ranking it has held since August
31, 1993. *
The fund's long-term leadership is clearly apparent when compared with other
growth funds for the three years ended June 30, 1994, the fund was ranked first
of all 270 growth funds tracked by Lipper Analytical Services. +
Performance should always be considered in light of a fund's investment strate-
gy. Putnam New Opportunities Fund is for investors seeking long-term capital
appreciation primarily through common stock investments in companies in economic
sectors with above-average long-term growth potential.
FISCAL 1994 RESULTS AT A GLANCE
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Class A Class B
Total return: NAV POP NAV CDSC
12 months ended 6/30/94
(change in value during
period plus reinvested
distributions) 7.00% 0.85% 6.18% 1.18%
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Share value: NAV POP NAV
6/30/93 $20.83 $22.10 $20.80
6/30/94 2188 23.21 21.68
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Capital gains
Long- Short-
Distributions: No. Income term term Total
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Class A 1 __ $0.400 $0.047 $0.447
Class B 1 __ 0.400 0.047 0.447
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Performance data represent past results. For performance over longer periods,
see page 8. POP assumes 5.75% maximum sales charge. CDSC assumes 5% maximum
contingent deferred sales charge.
* Morningstar is an independent research firm that rates funds relative to other
funds with similar investment objectives, based on risk-adjusted medium- and
long-term performance, as applicable, and adjusted for sales charges. Ratings
are subject to change monthly. Past performance is no assurance of future re-
sults.
+ Lipper rankings vary over time and do not include the effects of sales char-
ges. Past performance is no assurance of future results. For periods ended
6/30/94, the fund's class A shares were ranked as follows: one year, 53 of 422
funds; two years, 3 of 313 funds; three years, 1 of 270 funds.
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FROM THE CHAIRMAN [Photograph of George Putnam]
*(C) Karsh, Ottawa
Dear Shareholder:
The first six months of 1994 served as a reminder that the world's closely
linked financial markets are always shifting and sometimes do so dramatically.
This spring, higher interest rates in the United States lessened fears of infla-
tion and moderated growth while sparking volatility that affected virtually eve-
ry sector of the stock and bond markets. Conditions now appear more stable. Most
of the world's major economies show stronger fundamentals, while Japan and Euro-
pe appear on the brink of recovery.
Yet, some apprehension lingers. The markets continue to overanticipate another
rise in U.S. interest rates and discount the generally good economic news. Mean-
while the dollar poses a new concern as it loses ground to other currencies.
Most stocks in the growth category joined other investments in losing value du-
ring the past five months. However it is important to remember that declines in
the market have traditionally paved the way for gains that more than made up for
the downturn.
In the report that follows, Fund Manager Daniel Miller explains how he plans to
use Putnam's considerable resources in positioning your fund to meet the cha-
llenges of the coming months.
Respectfully yours,
George Putnam
Chairman of the Trustees
August 17, 1994
* (C) Copyright
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REPORT FROM THE FUND MANAGER
DANIEL L. MILLER
In its search for above-average growth, Putnam New Opportunities Fund has held
its place in the vanguard of the market, even through one of the more turbulent
investment periods in recent memory. The fund's strategy - selecting high-
potential stocks within what we believe are the fastest-growing sectors of the
economy - produced total returns of 7.00% and 6.18% for class A and class B
shares, respectively, based on results at net asset value. This performance,
which exceeded the Standard & Poor's (R)* 500 Index return of 1.43%, reflects
our dedication to longer-term goals during uncertain markets.
SPRING'S VOLATILITY OFFSETS WINTER'S STRENGTHS
Returns for the second half of the fiscal year eroded much of the strong perfor-
mance we reported at the end of the semiannual period. This spring's interest
rate increases were among the key factors. Although the rate changes didn't
affect our strategy directly, they did affect the market's willingness to pay a
high premium for the superior prospects of high-growth stocks. Much of the value
of these stocks rests on perceptions of their future earnings prospects - which
are discounted to a greater degree in periods of rising rates. Thus, these
stocks, in general, experienced significant price declines.
In our opinion, the recent rate adjustments appear to have run their course and
should have the desired effect of moderating economic growth. However, through-
out most of the portfolio, we generally focus on stocks that we believe have the
potential to do well regardless of the economic environment. Therefore, despite
recent volatility, we are maintaining the fund's long-term perspective and stra-
tegy.
* (R) Registered mark
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LONG-TERM APPROACH STILL ALLOWS RESPONSE TO SHORT-TERM EVENTS
While your fund's investments are concentrated in several clearly defined sec-
tors of the economy, we also have one distinct portfolio sector, or "sleeve"
which gives us the flexibility to anticipate - and respond to - current trends.
This miscellaneous sector, which constituted about 8% of the portfolio at the
end of the period, is now being positioned to take advantage of two trends that
have become widespread in U.S. industry: consolidation and outsourcing.
Investments in temporary help companies, such as Kelly Services, Inc., and the
Olsten Corp., have the potential to perform well in response to the outsourcing
trend, as does Robert Half, whose AccounTemps subsidiary is one of the larger,
better-known professional placement agencies in the United States.
Danka Business Systems is another one of the holdings that looked promising at
fiscal year's end. This office equipment service company's consolidation efforts
are enabling it to gain market share and acquire other companies in an industry
that has, thus far, been dominated by small family-owned companies.
(Bar Chart)
SECTOR ALLOCATION SHIFTS *
12/31/93 6/30/94
Value-oriented consuming 19.8% 18.1%
Medical technology / cost containment 21.6 19.6
Applied / advanced technology 13.4 17.5
Media / entertainment 20.5 15.7
Personal communications 7.8 8.3
Miscellaneous 2.3 7.2
Personal financial services 4.2 3.4
Environmental services 0.6 0.3
* Based on percentage of net assets. Future holdings will vary.
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SECTOR OVERVIEW
As you can see from the sector allocation chart, noticeable changes have been
made in some of the portfolio allocations, most in the last few months of the
fiscal year.
Medical technology/cost containment was identified as a promising sector well
before health care reform began to influence this portion of the market and re-
mains one of the largest portfolio sectors. This reflects our belief that
health care reform legislation now appears likely to have a minimal effect on
the industry. We are particularly looking for companies that are helping to re-
duce the cost of health care and consequently would be able to benefit under
virtually any type of health care reform scenario. Health care information sys-
tems, managed care providers, and biotechnology are some of the services and
products we think show strong potential in this area. A good example is Mid-
Atlantic Medical Services, a health maintenance organization whose earnings
strength and market share growth have made it one of the stronger health care
stocks this year.
Value-oriented consuming remains a major focus for the portfolio, with La Quinta
Inns, a budget motel chain, one of our current favorites. The company recently
underwent a management change and the results have brought strong improvements
in room and occupancy rates, which suggests potential for future earnings
growth.
Applied/advanced technology, holdings, including computer software, networking
and other computer services, had grown significantly by fiscal year's end. We
have moved away from our emphasis on education/entertainment companies and are
now focusing more on client/server and networking software. We are especially
on the lookout for companies with proprietary technology that is of great value
within a specific market niche. An example: InfoSoft, a recent initial public
offering, creates language processing and productivity tools which are supplied
to larger software-producing companies for incorporating in their word-process-
ing or other software applications.
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TOP 10 HOLDINGS (6/30/94)
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Hospitality Franchise Systems, Inc.
World's largest hotel franchise company
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Robert Half International, Inc.
Temporary and permanent staffing services company
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Bed Bath & Beyond, Inc.
Domestics and housewares discounter
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Infinity Broadcasting Corp., Class A
Largest U.S.-based radio station owner/operator
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Paging Network, Inc.
Largest provider of paging services in the U.S.
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Block (H & R), Inc.
Income tax services and on-line computer services
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Wellfleet Communications, Inc.
Multi-protocol networking products for computers
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Danka Business Systems ADR
Office equipment services
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Liberty Media Corp. Class A
Cable television systems and program networks
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PeopleSoft, Inc.
Client/server applications software
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These holdings represent 16.3% of the fund's net assets. Portfolio holdings are
subject to change.
Personal communications and media/entertainment have been quite active over the
second half of the fiscal year. Several gaming and programming positions were
sold, reducing the media section allocation. We have become increasingly selec-
tive in both sectors, with one current choice being Renaissance Communications.
This TV station chain has six stations, five of them Fox affiliates. We believe
this bodes well for advertising revenues down the road.
OUTLOOK: BETTER TIMES COULD BE AHEAD
Prices of the stocks of smaller and medium-sized companies can change dramati-
cally as the market's perception of future earnings prospects moves up or down.
Nevertheless, we believe that once the markets begin to focus forward - i.e.,
on earnings expectations for 1995 - the higher earnings potential of emerging
growth stocks will make these investments attractive. We will work to position
your fund to benefit accordingly.
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed fa-
vorably as of 6/30/94, there is no guarantee the fund will continue to hold the-
se securities in the future.
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PERFORMANCE SUMMARY
This section provides, at a glance, information about your fund's performance.
Total return shows how the value of the fund's shares changed over time, assum-
ing you held the shares through the entire period and reinvested all distribu-
tions back into the fund. We show total return in two ways: on a cumulative
long-term basis and on average how the fund might have grown each year over va-
rying periods. For comparative purposes, we show how the fund performed relati-
ve to appropriate indices and benchmarks.
TOTAL RETURN FOR PERIODS ENDING IN 6/30/94
Standard
Class A Class B & Poor's (R)*
NAV POP NAV CDSC 500 Index CPI
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1 year 7.00% 0.85% 6.18% 1.18% 1.43% 2.49%
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3 years 101.45 89.79 -- -- 30.59 8.82
Annual average 26.30 23.81 -- -- 9.30 2.86
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Life of class A 174.42 158.67 -- -- 55.66 12.46
Annual average 30.07 28.08 -- -- 12.21 3.11
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Life of class B -- -- 24.35 20.35 4.51 3.42
Annual average -- -- 17.81 14.95 3.37 2.56
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The fund began investment operations on 8/31/90, offering shares now known as
class A shares. Effective 3/1/93, the fund began offering class B shares. Fund
performance data do not take into account any adjustment for taxes payable on
reinvested distributions. Performance data represent past results and differ
for each share class. Investment returns and principal value will fluctuate so
an investor's shares, when sold, may be worth more or less than their original
cost.
(Line Chart)
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 8/31/90
Class A Shares at POP Competitive Index (S&P 500) CPI
8/31/90 $ 9,425 $ 10,000 $ 10,000
6/30/91 12,841 11,840 10,334
6/30/92 16,545 13,426 10,653
6/30/93 24,176 15,253 10,973
6/30/94 25,879 15,566 11,246
Past performance is no assurance of future results. A $10,000 investment in
the fund's class B shares at inception (3/1/93) would have grown to $12,435
by 6/30/94 ($12,035 with a redemption at the end of the period).
* (R) Registered mark
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TERMS AND DEFINITIONS
CLASS A SHARES are generally subject to an initial sales charge.
CLASS B SHARES may be subject to a sales charge upon redemption.
NET ASSET VALUE (NAV) is the value of all fund assets, minus liabilities, divi-
ded by the number of outstanding shares. It does not include any initial or con-
tingent deferred sales charges.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the time of the
redemption of shares and assumes redemption at the end of the period. Your
fund's CDSC declines from a 5% maximum during the first year to 1% during the
sixth year. After the sixth year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
STANDARD & POOR'S (R)* 500 INDEX is an unmanaged list of common stocks that is
frequently used as a general measure of stock market performance. The index
assumes reinvestment of all distributions and does not take into account broke-
rage commissions or other costs. The fund's portfolio contains securities that
do not match those in the index.
CONSUMER PRICE INDEX is a commonly used measure of inflation; it does not repre-
sent an investment return.
* (R) Registered mark
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THE PUTNAM FUND SELECTOR (TM)*
The Putnam Fund Selector shows the many opportunities for investors within every
investment strategy. All investors should first accumulate a base of conservati-
ve, cash-equivalent investments. Then, with the help of your investment advisor,
diversify your portfolio by investing in the Putnam Family of Funds.
(Pyramid Graphic)
Risk/Reward
PUTNAM GROWTH FUNDS
PUTNAM GROWTH AND INCOME FUNDS
PUTNAM INCOME OR TAX-FREE INCOME FUNDS
MOST CONSERVATIVE INVESTMENTS
* (TM) Trademark
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PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund Diversified Equity Trust
Europe Growth Fund Global Growth Fund
Health Sciences Trust Investors Fund
Natural Resources Trust New Opportunities Fund
OTC Emerging Growth Fund Overseas Growth Fund
Vista Fund Voyager Fund
PUTNAM GROWTH AND INCOME FUNDS
Convertible Income-Growth Trust Dividend Growth Fund
Equity Income Fund The George Putnam Fund of Boston
The Putnam Fund for Growth and Income Managed Income Trust
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Adjustable Rate U.S. Government Fund American Government Income Fund
Balanced Government Fund Corporate Asset Trust
Diversified Income Trust Federal Income Trust
Global Governmental Income Trust High Yield Advantage Fund
High Yield Trust Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE INCOME FUNDS
Intermediate Tax Exempt Fund Municipal Income Fund
Tax Exempt Income Fund Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds *
Arizona, California, Florida, Massachusetts, Michigan,
Minnesota, New Jersey, New York, Ohio, and Pennsylvania
LIFESTAGE (SM) FUNDS
Putnam Asset Allocation Funds - three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments to help
maximize your return and reduce your risk.
The three portfolios:
Putnam Asset Allocation: Balanced Portfolio
Putnam Asset Allocation: Conservative Portfolio
Putnam Asset Allocation: Growth Portfolio
MOST CONSERVATIVE INVESTMENTS +
Putnam money market funds:
Daily Dividend Trust
Tax Exempt Money Market Fund
CDs and savings accounts ++
* Not available in all states.
++ Not offered by Putnam Investments. Certificates of deposit offer a fixed rate
of return and may be insured, up to certain limits, by federal/state agen-
cies. Savings accounts may also be insured up to certain limits.
+ Relative to above.
Please call your financial advisor or Putnam at 1-800-225-1581 to obtain a pros-
pectus for any Putnam fund. It contains more complete information, including
charges and expenses. Please read it carefully before you invest or send money.
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REPORT OF INDEPENDENT ACCOUNTANTS
Annual Report
For the Fiscal Year Ended June 30, 1994
To the Trustees and Shareholders of Putnam New Opportunities Fund
We have audited the accompanying statement of assets and liabilities of Putnam
New Opportunities Fund, including the portfolio of investments owned, as of June
30, 1994, and the related statement of operations, the statements of changes in
net assets for each of the two years in the period then ended, and the "Finan-
cial Highlights" for each of the three years in the period then ended and for
the period August 31, 1990 (commencement of operations) to June 30, 1991 for
Class A shares and for the year ended June 30, 1994 and for the period March 1,
1993 (commencement of operations) to June 30, 1993 for Class B shares. These fi-
nancial statements and "Financial Highlights" are the responsibility of the
fund's management. Our responsibility is to express an opinion on these finan-
cial statements and "Financial Highlights" based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and "Financial High-
lights" are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1994 by correspondence with the custodian and brokers. An audit also inclu-
des assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and "Financial Highlights" referred to
above present fairly, in all material respects, the financial position of Putnam
New Opportunities Fund as of June 30, 1994, and the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the "Financial Highlights" for each of the three
years in the period then ended and for the period August 31, 1990 (commencement
of operations) to June 30, 1991 for Class A shares and for the year ended June
30, 1994 and for the period March 1, 1993 (commencement of operations) to June
30, 1993 for Class B shares, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
August 17, 1994
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PORTFOLIO OF INVESTMENTS OWNED
June 30, 1994
COMMON STOCKS (90.6%)(a)
Number of Shares Value
HEALTH CARE SERVICES (9.4%)
620,000 Careline, Inc. (b) $ 6,200,000
337,500 Health Management Assoc., Inc. (b) 6,918,750
556,200 Homecare Management, Inc. (b) 8,064,900
360,000 Homedco Group, Inc. (b) 10,080,000
350,000 Horizon Healthcare Corp. (b) 8,006,250
610,000 Lincare Holdings, Inc. (b) 11,818,750
227,400 Quantum Health Resources, Inc. (b) 7,191,525
101,500 Ren Corporation (b) 862,750
270,000 Renal Treatment Centers, Inc. (b) 4,590,000
355,000 Rotech Medical Corp. (b) 6,745,000
58,100 Summit Care Corp. (b) 1,060,325
160,000 Value Health, Inc. (b) 6,120,000
365,300 Vencor, Inc. (b) 12,602,850
106,120 Vivra, Inc. (b) 2,546,880
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92,807,980
COMPUTER SOFTWARE (9.3%)
350,900 Alias Research, Inc. (b) 4,605,563
150,000 Compuware Corp. (b) 6,206,250
25,434 Concord Communications Inc. 12,717
343,907 FTP Software, Inc. (b) 5,244,582
307,400 Infosoft International, Inc. (b) 7,070,200
140,000 Intuit, Inc. (b) 4,655,000
270,000 Mercury Interactive Corp. (b) 2,767,500
380,000 Netmanage, Inc. (b) 5,320,000
130,000 Parametric Technology Corp. (b) 2,941,250
365,000 PeopleSoft, Inc. (b) 12,775,000
145,000 Powersoft Corp. (b) 7,032,500
185,000 Sybase, Inc. (b) 9,065,000
305,000 Synopsys, Inc. (b) 11,437,500
300,000 Wall Data, Inc. (b) 11,775,000
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90,908,062
BUSINESS SERVICES (7.2%)
365,000 Danka Business Systems ADR (c) 14,554,365
345,000 Interim Services, Inc. (b) 7,978,125
300,000 Kelly Services, Inc. Class A 8,250,000
300,000 Manpower, Inc. 6,300,000
250,000 Olsten Corp. (The) 8,000,000
220,000 Paychex, Inc. 6,435,000
475,000 Robert Half International, Inc. (b) 19,178,125
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70,695,615
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Number of Shares Value
CABLE TELEVISION (6.3%)
420,000 Antec Corp. (b) $ 9,870,000
140,000 Cablevision Systems Corp. (b) 6,545,000
530,000 Century Communications Corp. Class A 3,908,750
300,000 Comcast Corp. Special Class A 5,400,000
330,000 International Family Entertainment, Inc. (b) 5,445,000
670,000 Liberty Media Corp. Class A (b) 13,232,500
255,000 Star Sight Telecast, Inc. (b) 3,060,000
151,000 TCA Cable TV, Inc. 3,416,375
180,000 Tele-Communications, Inc. Class A (b) 3,667,500
225,000 Viacom, Inc. Class B (b) 7,115,625
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61,660,750
RETAIL (6.1%)
600,000 Bed Bath & Beyond, Inc. (b) 17,175,000
335,000 Books-A-Million, Inc. (b) 7,872,500
1,250,000 Cifra SA de c.v., Series C (Mexico) (c) 2,912,875
53,500 Gymboree Corp. (b) 2,113,250
335,000 Heilig-Meyers Co. 9,086,875
100,000 Home Depot, Inc. 4,212,500
180,000 Office Depot, Inc. (b) 3,600,000
172,628 Stein Mart, Inc. (b) 3,020,990
315,000 Talbots, Inc. 9,450,000
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59,443,990
RESTAURANTS (5.7%)
450,000 Apple South, Inc. 6,525,000
400,000 Applebee.s International, Inc. 4,900,000
500,000 Buffets, Inc. (b) 9,187,500
435,000 DF&R Restaurants, Inc. (b) 10,331,250
94,563 Fresh Choice, Inc. (b) 2,009,464
401,300 Landry.s Seafood Restaurants, Inc. (b) 7,398,969
385,700 Outback Steakhouse, Inc. (b) 9,305,013
450,000 Taco Cabana, Inc. (b) 6,075,000
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55,732,196
WIRELESS COMMUNICATIONS (5.3%)
450,000 Airtouch Communications, Inc. (b) 10,631,250
110,000 Cellular Communications, Inc. Class A (b) 5,280,000
345,000 Centennial Cellular Corp. Class A (b) 5,778,750
12,150 Grupo Iusacell S.A. Series D (Mexico) ADR (b)(c) 320,456
28,350 Grupo Iusacell S.A. Series L (Mexico) ADR (b)(c) 737,100
585,000 Paging Network, Inc. (b) 16,087,500
240,000 United States Cellular Corp. (b) 5,970,000
220,200 Vanguard Cellular Systems, Inc. (b) 7,266,600
----------------
52,071,656
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Number of Shares Value
BROADCASTING (5.2%)
218,750 Clear Channel Communications, Inc. (b) $ 8,230,469
285,000 Emmis Broadcasting Corp. Class A (b) 4,061,250
695,000 Infinity Broadcasting Corp. Class A (b) 16,853,750
260,000 Renaissance Communications Corp. (b) 5,980,000
385,000 SFX Broadcasting, Inc. Class A (b) 5,293,750
500,000 Westcott Communications, Inc. (b) 4,875,000
750,000 Westwood One, Inc. (b) 5,812,500
----------------
51,106,719
HMOs (4.8%)
43,900 Coventry Corp. (b) 1,613,325
310,000 Healthsource, Inc. (b) 8,835,000
240,000 Mid Atlantic Medical Services, Inc. (b) 10,680,000
180,000 Oxford Health Plans Inc. (b) 8,010,000
70,000 Pacificare Health Systems, Inc. (b) 3,500,000
125,000 Pacificare Health Systems, Inc. Class B (b) 6,125,000
79,900 United American Healthcare (b) 1,348,313
160,000 United Healthcare Corp. 7,120,000
----------------
47,231,638
RECREATION (3.9%)
310,000 Blockbuster Entertainment Corp. 8,021,250
279,000 Boomtown, Inc. (b) 4,673,250
90,000 Disney (Walt) Productions Inc. 3,746,250
590,000 Mirage Resorts, Inc. (b) 11,062,500
37,500 Players International, Inc. (b) 562,500
250,000 Promus Companies, Inc. (b) 7,406,250
221,100 Rio Hotel & Casino, Inc. (b) 2,874,300
----------------
38,346,300
CONSUMER SERVICES (3.8%)
400,000 Block (H & R), Inc. 15,700,000
405,000 CUC International, Inc. (b) 10,833,750
300,000 Loewen Group, Inc. 7,387,500
157,617 Stewart Enterprises, Inc. Class A 3,428,170
----------------
37,349,420
COMPUTER SERVICES (3.6%)
160,000 America Online, Inc. (b) 9,120,000
685,000 Cambridge Technology Partners (b) 10,446,250
200,000 First Data Corp. 8,275,000
375,000 Fiserv Inc. (b) 7,687,500
----------------
35,528,750
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Number of Shares Value
LODGING (3.4%)
815,000 Hospitality Franchise Systems, Inc. (b) $ 19,967,500
450,000 La Quinta Inns, Inc. 11,756,250
100,946 Supertel Hospitality, Inc. (b) 1,211,352
----------------
32,935,102
TELEPHONE SERVICES (3.0%)
345,000 ALC Communications Corp. (b) 10,608,750
425,000 Communications Central, Inc. (b) 5,100,000
230,000 MFS Communications Company, Inc. (b) 5,692,500
225,000 Telephone & Data Systems, Inc. 8,325,000
----------------
29,726,250
NETWORKING EQUIPMENT (2.8%)
280,000 Cisco Systems, Inc. (b) 6,545,000
100,000 Newbridge Networks Corp. (b) 3,437,500
120,000 Stratacom, Inc. (b) 2,520,000
598,200 Wellfleet Communications, Inc. (b) 14,955,000
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27,457,500
PHARMACEUTICALS AND BIOTECHNOLOGY (2.6%)
110,000 Biogen, Inc. (b) 3,148,750
37,701 Cephalon, Inc. (b) 339,309
270,000 Cor Therapeutics, Inc. (b) 3,172,500
365,000 Elan Corp. PLC ADR (b)(c) 12,683,750
125,000 Immulogic Pharmaceutical Corp. (b) 937,500
220,000 Penederm, Inc. (b) 2,255,000
275,000 Theratech, Inc. (Delaware) (b) 3,368,750
----------------
25,905,559
FINANCIAL SERVICES (2.2%)
330,000 Equitable Cos., Inc. 5,857,500
220,000 First USA, Inc. 8,442,500
325,000 MBNA Corp. 7,312,500
----------------
21,612,500
MEDICAL EQUIPMENT AND SUPPLIES (2.1%)
346,812 Ballard Medical Products Co. 3,511,472
700,000 Bioject Medical Technologies (b) 1,618,750
300,000 Haemonetics Corp. (b) 5,437,500
304,900 Igen, Inc. (b) 2,134,300
200,000 Medisense, Inc. (b) 2,400,025
330,081 Protocol Systems, Inc. (b) 2,063,006
298,100 Zoll Medical Corp. (b) 3,651,725
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20,816,778
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Number of Shares Value
INSURANCE (1.2%)
280,000 Bankers Life Holding Corp. $ 5,635,000
140,000 Sunamerica, Inc. 5,722,500
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11,357,500
HEALTH CARE INFORMATION SYSTEMS (0.9%)
369,743 Clinicom, Inc. (b) 5,361,274
150,000 HBO & Co. 3,787,500
----------------
9,148,774
COMPUTER PERIPHERALS (0.5%)
150,000 American Power Conversion Corp. (b) 2,418,750
240,000 Medar, Inc. (b) 2,880,000
----------------
5,298,750
HOUSEHOLD PRODUCTS (0.5%)
110,000 Duracraft Corp. (b) 4,812,500
PUBLISHING (0.3%)
185,000 Marvel Enterainment Group, Inc. (b) 3,376,250
ENVIRONMENTAL SERVICES (0.3%)
145,000 Molten Metal Technology, Inc. (b) 2,610,000
APPAREL (0.2%)
60,000 Tommy Hilfiger Corp. (b) 2,385,000
----------------
TOTAL COMMON STOCKS (cost $849,846,529) $ 890,325,539
CONVERTIBLE BONDS (0.5%) (a)
Principal Amount Value
$2,350,000 Careline, Inc. sr. cv. notes 8s, 2001 (b)(d) $2,256,000
4,500,000 Office Depot Inc. sub. liquid yield, cv.
notes zero %, 2007 2,958,750
----------------
TOTAL CONVERTIBLE BONDs (cost $4,654,043) $5,214,750
CONVERTIBLE PREFERRED STOCKS (0.4%) (a) (cost $1,992,839)
Number of Shares Value
72,000 Cellular Communications, Inc. Class A (b) $3,456,000
<PAGE>
<PAGE>
SHORT-TERM INVESTMENTS (10.3%)(a)
Principal Amount Value
$20,000,000 Bank of Boston Corp. 4.25s, July 12, 1994 $ 19,971,666
20,000,000 Federal Home Loan Mortgage Corp. 4.31s,
August 25, 1994 19,865,911
20,000,000 Federal National Mortgage Assn. 4.37s,
September 1, 1994 19,854,335
20,000,000 General Motors Acceptance Corp. 4.3s,
July 13, 1994 19,968,944
10,000,000 Goldman Sachs Group 4.35s, July 5, 1994 9,993,958
11,361,000 Interest in $410,000,000 joint repurchase
agreement dated June 30, 1994 with Goldman Sachs
& Co., Inc., due July 1, 1994 with respect to va-
rious U.S. Treasury obligations - maturity value
of $11,361,000 for an effective yield of 4.25% $ 11,361,000
----------------
TOTAL SHORT-TERM INVESTMENTS (cost $101,015,814) $101,015,814
----------------
TOTAL INVESTMENTS (cost $957,509,225)(e) $1,000,012,103
(a) Percentages indicated are based on total net assets of $982,525,087, which
correspond to a net asset value per Class A share and Class B share of
$21.88 and $21.68, respectively.
(b) Non-income-producing security.
(c) ADR after the name of a foreign holding stands for American Depository Re-
ceipt, representing ownership of foreign securities on deposit with a domes-
tic custodian bank.
(d) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At June 30,1994, this security
was valued at 2,256,000 or 0.2% of net assets.
(e) The aggregate identified cost for federal income tax purposes is
$959,983,375, resulting in gross unrealized appreciation and depreciation of
$110,607,581 and $70,578,853, respectively, or net unrealized appreciation
of $40,028,728.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1994
ASSETS
- -------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $957,509,225) (Note 1) $1,000,012,103
Cash 462
Dividends and interest receivable 300,938
Receivable for shares of the fund sold 9,368,287
Receivable for securities sold 10,715,064
Unamortized organization expenses (Note 1) 7,842
- -------------------------------------------------------------------------------
TOTAL ASSETS 1,020,404,696
LIABILITIES
- -------------------------------------------------------------------------------
Payable for securities purchased $ 129,795,701
Payable for shares of the fund repurchased 5,194,950
Payable for compensation of Manager (Note 2) 1,529,048
Payable for distribution fees (Note 2) 669,735
Payable for administrative services (Note 2) 4,412
Payable for compensation of Trustees (Note 2) 1,035
Payable for investor servicing and custodian fees (Note 2) 337,014
Payable for organization expenses (Note 1) 23,788
Other accrued expenses 323,926
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 37,879,609
- -------------------------------------------------------------------------------
NET ASSETS $ 982,525,087
REPRESENTED BY
- -------------------------------------------------------------------------------
Paid-in capital (Note 4) $ 931,338,979
Accumulated net realized gain on investment transactions 8,683,230
Net unrealized appreciation of investments 42,502,878
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO
CAPITAL SHARES OUTSTANDING $ 982,525,087
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- -------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($648,786,907 divided by 29,653,331 shares) $21.88
Offering price per Class A share (100/94.25 of $21.88) * $23.21
Net asset value and redemption price per Class B share
($333,738,180 divided by 15,392,432 shares) ** $21.68
- -------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS
Year ended June 30, 1994
INVESTMENT INCOME:
- -------------------------------------------------------------------------------
Interest $ 11,777,008
- -------------------------------------------------------------------------------
Dividends (Net foreign tax of $2,831) 1,117,163
- -------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 2,894,171
- -------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------
Compensation of Manager (Note 2) $ 4,492,598
- -------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 1,433,091
- -------------------------------------------------------------------------------
Administrative services (Note 2) 16,991
- -------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 24,431
- -------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 1,278,169
- -------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 1,561,106
- -------------------------------------------------------------------------------
Reports to shareholders 127,776
- -------------------------------------------------------------------------------
Registration fees 243,950
- -------------------------------------------------------------------------------
Auditing 28,331
- -------------------------------------------------------------------------------
Legal 21,643
- -------------------------------------------------------------------------------
Postage 208,951
- -------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 11,884
- -------------------------------------------------------------------------------
Other expenses 41,890
- -------------------------------------------------------------------------------
TOTAL EXPENSES 9,490,811
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS (6,596,640)
- -------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 16,471,902
- -------------------------------------------------------------------------------
Net unrealized depreciation of investments during the year (40,895,256)
- -------------------------------------------------------------------------------
Net loss on investments (24,423,354)
- -------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (31,019,994)
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Year ended June 30
1994 1993
- -------------------------------------------------------------------------------
INCREASE IN NET ASSETS
- -------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------
Net investment loss $ (6,596,640) $ (2,175,729)
- -------------------------------------------------------------------------------
Net realized gain on investments 16,471,902 3,536,111
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments (40,895,256) 80,388,469
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (31,019,994) 81,748,851
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
net realized gain on investments - class A (8,898,215) (3,728,798)
- -------------------------------------------------------------------------------
net realized gain on investments - class B (2,205,357) --
- -------------------------------------------------------------------------------
Increase from capital share transactions
(Note 4 ) 690,524,657 114,897,684
- -------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 648,401,091 192,917,737
- -------------------------------------------------------------------------------
Beginning of year 334,123,996 141,206,259
- -------------------------------------------------------------------------------
END OF YEAR (including accumulated
net investment loss of $0 and
$2,644,703, respectively) $ 982,525,087 $ 334,123,996
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS *
(For a share outstanding throughout the period)
For the period For the period
March 1, 1993 August 31, 1990
Year (commencement (commencement of
ended of operations) to operations) to
June 30 June 30 Year ended June 30 June 30
- -----------------------------------------------------------------------------------------------------------------------------------
1994 1993 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Class A
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $20.80 $17.76 $20.83 $14.50 $11.56 $8.54
Investment operation:
Net investment income (loss) (.11) (.05) (.06) (.12) (.02) (.11) (a)
Net realized and unrealized
gain on investments 1.44 3.09 1.56 6.77 3.33 (d) 3.19
Total from investment operations 1.33 3.04 1.50 6.65 3.31 3.08
Less distributions to shareholders
from net realized gain on investments (.45) -- (.45) (.32) (.37) (.06)
Total distributions (.45) -- (.45) (.32) (.37) (.06)
Net asset value, end of period $21.68 $20.80 $21.88 $20.83 $14.50 $11.56
Total investment return at
net asset value (%) (e) 6.18 51.88 (b) 7.00 46.12 28.85 43.12 (b)
Net assets, end of period
(in thousands) $333,738 $15,698 $648,787 $318,426 $141,206 $3,164
Ratio of expenses to
average net assets (%) 2.04 .67 (f) 1.23 1.31 1.64 2.28 (a)(f)
Ratio of net investment loss
to average net assets (%) (1.55) (.57)(f) (.82) (0.98) (.91) (1.14)(a)(f)
Portfolio Turnover (%) 52.76 93.59 (f) 52.76 93.59 116.04 (c) 71.54 (f)
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
* Financial highlights for periods ended through June 30, 1992 have been re-
stated to conform with requirements issued by the SECin April 1993.
(a) Reflects a voluntary absorption of expenses incurred by the fund and an ex-
pense limitation during the period. As a result of these limitations, expen-
ses of the fund for the period ended June 30, 1991 reflect a reduction of
$0.05 per share. (See Note 2.)
(b) Annualized.
(c) Portfolio turnover excludes the impact of assets received from the acquisi-
tion of Putnam Information Sciences Trust.
(d) The amount shown is a balancing figure and does not accord with the net loss
on investments which excludes the unrealized appreciation acquired from Put-
nam Information Sciences Trust.
(e) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(f) Not annualized.
</TABLE>
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1994
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is registered under the Investment Company Act of 1940, as amended, as
a diversified open-end management investment company. The fund seeks capital
appreciation by investing principally in common stocks of companies in sectors
of the economy which, in Putnam Investment Management's judgment, possess above-
average, long-term growth potential.
The fund offers both class A and class B shares. The fund commenced its public
offering of class B shares on March 1, 1993. Class A shares are sold with a
front-end sales charge of 5.75%. Class B shares do not pay a front-end sales
charge, but pay a higher ongoing distribution fee than class A shares and are
subject to a contingent deferred sales charge if those shares are redeemed
within six years of purchase. In addition, the Trustees declare separate divi-
dends on each class of shares. Each class bears expenses unique to that class
(including the distribution fees applicable to such class) and votes as a class
only with respect to its own distribution plan or other matters on which a class
vote is required by law or determined by the Trustees. All other expenses of the
fund are borne pro-rata by the holders of both classes of shares. Shares of each
class would receive their pro rata share of the net assets of the fund if the
fund were liquidated.
The following is a summary of significant accounting policies consistently fo-
llowed by the fund in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles.
A) SECURITY VALUATION Investments for which market quotations are readily avail-
able are stated at market value, which is determined using the last reported sa-
le price, or, if no sales are reported - as in the case of some securities tra-
ded over-the-counter - the last reported bid price, except that certain U.S. go-
vernment obligations are stated at the mean between the last reported bid and
asked prices. Short-term investments having remaining maturities of 60 days or
less are stated at amortized cost, which approximates market value, and other
investments are stated at fair value following procedures approved by the
Trustees.
B) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME Security transactions are
accounted for on the trade date (date the order to buy or sell is executed). In-
terest income is recorded on the accrual basis and dividend income is recorded
on the ex-dividend date, except that certain dividends from foreign securities
are recorded as soon as the fund is informed of the ex-dividend date.
C) JOINT TRADING ACCOUNT Pursuant to an exemptive order issued by the Securities
and Exchange Commission, the fund may transfer uninvested cash balances into a
joint trading account, along with the cash of other registered investment compa-
nies managed by Putnam Investment Management, Inc. ("Putnam Management"), the
fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., and cer-
tain other accounts. These balances may be invested in one or more repurchase
<PAGE>
<PAGE>
agreements and/or short-term money market instruments.
D) REPURCHASE AGREEMENTS The fund, through its custodian, receives delivery of
the underlying securities, the market value of which at the time of purchase is
required to be in an amount at least equal to the resale price, including accru-
ed interest. The fund's Manager is responsible for determining that the value of
these underlying securities is at all times at least equal to the resale price,
including accrued interest.
E) FEDERAL TAXES It is the policy of the fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the In-
ternal Revenue Code applicable to regulated investment companies. It is also the
intention of the fund to distribute an amount sufficient to avoid imposition of
any excise tax under Section 4982 of the Internal Revenue Code of 1986. There-
fore, no provision has been made for federal taxes on income, capital gains or
unrealized appreciation of securities held, and excise tax on income and capital
gains.
F) DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders are recorded by
the fund on the ex-dividend date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences include treatment of non-taxable divi-
dends, wash sales and organization expenses. Reclassifications are made to the
Fund's capital accounts to reflect income and gains available for distribution
(or available capital loss carryovers) under income tax regulations. For the
year ended June 30, 1994, the Fund reclassified $6,596,640 to increase undistri-
buted net investment income, $26,338 to decrease accumulated net realized gain
on investments, and $6,570,302 to decrease paid-in capital.
G) UNAMORTIZED ORGANIZATION EXPENSES Expenses incurred by the fund in connection
with its organization, its registration with the Securities Exchange Commission
and with various state and the initial public offering of its shares aggregated
$54,369. These expenses are being amortized by the fund on a straight-line basis
over a five-year period.
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Management, for management and investment advisory servi-
ces is paid quarterly based on the average net assets of the fund. Such fee is
based on the following annual rates: 0.70% of the first $500 million of average
net assets, 0.60% of the next $500 million, 0.55% of the next $500 million, and
0.50% of any amount over $1.5 billion, subject to reduction in any year by the
amount of certain brokerage commissions and fees (less expenses) received by
affiliates of the Manager of the fund's portfolio transactions.
The fund also reimburses the Manager for the compensation and related expenses
of certain officers of the fund and their staff who provide administrative ser-
vices to the fund. The aggregate amount of all such reimbursements is determined
annually by the Trustees. For the year ended June 30, 1994, the fund incurred
<PAGE>
<PAGE>
$16,991 for these services.
Trustees of the fund receive an annual Trustee.s fee of $1,440 and an additional
fee for each Trustees. meeting attended. Trustees who are not interested persons
of the Manager and who serve on committees of the Trustees receive additional
fees for attendance at certain committee meetings.
Custodial functions for the fund's assets are provided by Putnam Fiduciary Trust
Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing
agent functions are provided by Putnam Investor Services, a division of PFTC.
Fees paid for these investor servicing and custodial functions for the year
ended June 30, 1994 amounted to $1,433,091. Investor servicing and custodian
fees reported in the Statement of operations for the year ended June 30, 1994
have been reduced by credits allowed by PFTC.
The fund has adopted a distribution plan with respect to its Class A shares (the
"Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The purpose of Class A Plan is to compensate Putnam Mutual Funds Corp., a
wholly-owned subsidiary of Putnam Investments, Inc., for services provided and
expenses incurred by it in distributing Class A shares. The Trustees have appro-
ved payment by the fund to Putnam Mutual Funds Corp. at an annual rate of 0.25%
of the fund's average net assets attributable to Class A shares. For the year
ended June 30, 1994, the fund paid Putnam Mutual Funds Corp. distribution fees
of $1,278,169 for Class A shares.
During the year ended June 30, 1994, Putnam Mutual Funds Corp., a wholly-owned
subsidiary of Putnam Investments, Inc., acting as an underwriter, received net
commissions of $1,399,762 from the sale of class A shares of the fund.
A deferred sales charge of up to 1% is assessed on certain redemptions of Class
A shares purchased as part of an investment of $1 million or more. For the year
ended June 30, 1994, Putnam Mutual Funds Corp., acting as underwriter, received
$2,636 on such redemptions.
The fund has adopted a separate distribution plan with respect to its Class B
shares (the .Class B Plan.) pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The purpose of the Class B Plan is to compensate Putnam Mutual
Funds Corp. for services provided and expenses incurred by it in distributing
Class B shares. The Class B Plan provides for payments by the fund to Putnam Mu-
tual Funds Corp. at an annual rate of 1.00% of the funds average net assets
attributable to Class B shares. For the year ended June 30, 1994, the fund in-
curred fees of $1,561,106 for Class B shares.
Putnam Mutual Funds Corp. also receives the proceeds of contingent deferred sa-
les charges levied on Class B share redemptions within four years of purchase.
The charge is based on declining rates, which begin at 5.0% of the net asset va-
lue of the redeemed shares . Putnam Mutual Funds Corp. received contingent de-
ferred sales charges of $258,694 from such
<PAGE>
<PAGE>
redemptions for the year ended June 30, 1994.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the year ended June 30, 1994, purchases and sales of investment securi-
ties other than short-term investments aggregated $943,570,508 and $327,325,956,
respectively.
There were no purchases or sales of U.S. government obligations during the year.
In determining the net gain or loss on securities sold, the cost of securities
has been determined on the identified cost basis.
NOTE 4
CAPITAL SHARES
At June 30, 1994, there was an unlimited number of shares of beneficial interest
authorized, divided into two classes, class A and class B capital shares. Tran-
sactions in capital shares were as follows:
Year ended June 30 1994
Class A Shares Amount
- -------------------------------------------------------------------------------
Shares sold 33,758,633 $802,293,848
Shares issued in connection with
reinvestment of distributions 333,672 8,021,432
34,092,305 810,315,280
Shares repurchased (19,724,856) (468,827,584)
NET INCREASE 14,367,449 341,487,696
Year ended June 30 1993
Class A Shares Amount
- -------------------------------------------------------------------------------
Shares sold 15,622,166 $282,584,004
Shares issued in connection with
reinvestment of distributions 180,756 3,313,941
15,802,922 285,897,945
Shares repurchased (10,253,778) (185,483,706)
NET INCREASE 5,549,144 100,414,239
Year ended June 30 1994
Class B Shares Amount
- -------------------------------------------------------------------------------
Shares sold 16,813,104 $400,427,970
Shares issued in connection with
reinvestment of distributions 84,593 2,023,470
16,897,697 402,451,440
Shares repurchased (2,259,924) (53,414,479)
NET INCREASE 14,637,773 349,036,961
For the period March 1, 1993
(commencement of operations)
to June 30 1993
Class B Shares Amount
- -------------------------------------------------------------------------------
Shares sold 780,431 $14,991,747
Shares issued in connection with
reinvestment of distributions -- --
780,431 14,991,747
Shares repurchased (25,772) (508,302)
NET INCREASE 754,659 14,483,445
<PAGE>
<PAGE>
NOTE 5
RECLASSIFICATION OF CAPITAL ACCOUNT
Effective July 1, 1993, Putnam New Opportunities Fund has adopted the provisions
of Statement of Position 93-2 "Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of Capital Distributions by In-
vestment Companies (SOP)." The purpose of this SOP is to report the accumulated
net investment income (loss) and accumulated net realized gain (loss) accounts
in such a manner as to approximate amounts available for future distributions
(or to offset future realized capital gains) and to achieve uniformity in the
presentation of distributions by investment companies.
As a result of the SOP, the fund has reclassified $2,644,703 to increase undis-
tributed net investment income and decrease accumulated net realized gain by
$7,424, with a decrease of $2,637,279 to additional paid-in capital. These ad-
justments represent the cumulative amounts necessary to report these balances
through June 30, 1993.
<PAGE>
<PAGE>
FEDERAL TAX INFORMATION
Of the total distributions made, $0.447 per share was classified as long-term
capital gain whether received in cash or additional Fund shares, and regardless
of how long you had owned your shares before the distribution was made.
The Form 1099 you receive in January 1995 will show you the tax status of all
distributions paid to your account in calendar year 1994.
If you're a shareholder in an IRA or other tax-sheltered retirement plan, this
statement is for information only and will serve as a record of distributions
reinvested in your account during the fiscal year. Money invested in these plans
generally is not subject to federal income tax until you withdraw it.
As required by law, your Fund reports to the Internal Revenue Service on a ca-
lendar basis the amount of distributions paid to each shareholder.
Date Paid Short-term Capital Gain Long-term Capital Gain Total Paid
- -------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------
December 20, 1993 $0.000 $0.447 $0.447
- -------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------
December 20, 1993 $0.000 $0.447 $0.447
- -------------------------------------------------------------------------------
<PAGE>
<PAGE>
OUR COMMITMENT TO QUALITY SERVICE
CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested Service Seal every
year since the award.s 1990 inception. DALBAR, an independent research firm, ran
more than 10,000 tests of 38 shareholder service components. In every category,
Putnam outperformed the industry standard.
HELP YOUR INVESTMENT GROW.
Set up a sytematic program for investing with as little as $25 a month from a
Putnam fund or from your checking or savings account. *
SWITCH FUNDS EASILY.
You can move money from one account to another with the same class of shares
without a service charge. (This privilege is subject to change or termination.)
ACCESS YOUR MONEY QUICKLY.
You can get checks sent regularly or redeem shares any business day at the then-
current net asset value, which may be more or less than their original cost.
For details about any of these or other services, contact your financial advisor
or call the toll-free number shown below and speak with a helpful Putnam repre-
sentative.
To make an additional investment in this or any other Putnam fund, contact your
financial advisor or call our toll-free number:
1-800-225-1581.
* Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market. Investors should consider their ability to con-
tinue purchasing shares during periods of low price levels.
<PAGE>
<PAGE>
FUND INFORMATION
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
TRUSTEES
George Putnam, Chairman William F. Pounds, Vice Chairman
Jameson Adkins Baxter Hans H. Estin
John A. Hill Elizabeth T. Kennan
Lawrence J. Lasser Robert E. Patterson
Donald S. Perkins George Putnam, III
A.J.C. Smith W. Nicholas Thorndike
OFFICERS
George Putnam Charles E. Porter
President Executive Vice President
Patricia C. Flaherty Lawrence J. Lasser
Senior Vice President Vice President
Gordon H. Silver Peter Carman
Vice President Vice President
Daniel L. Miller William N. Shiebler
Vice President and Fund Manager Vice President
John R. Verani Paul M. O.Neil
Vice President Vice President
John D. Hughes Beverly Marcus
Vice President and Treasurer Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New Opportunities
Fund. It may also be used as sales literature when preceded or accompanied by
the current prospectus, which gives details of sales charges, investment objec-
tives and operating policies of the fund, and the most recent Putnam Quarterly
Performance Summary.
<PAGE>
<PAGE>
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
852/358-13352
<PAGE>
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND
EDGAR-FILED TEXTS:
(1) Boldface typeface is displayed with capital letters, italic typeface is
displayed in normal type.
(2) Because the printed page breaks are not reflected, certain tabular and
columnar headings and symbols are displayed differently in this filing.
(3) Bullet points and similar graphic signals are omitted.
(4) Page numbering has been omitted.
(5) The trademark symbol has been replaced by (TM).
(6) The copyright symbol has been replaced by (C).
(7) The dagger symbol has been replaced by (+).
(8) The registered mark symbol has been replaced by (R).
