Putnam
New Opportunities
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
12-31-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
It is always a pleasure to bring shareholders a report containing news of
robust performance, and this year's semiannual report for Putnam New
Opportunities Fund is no exception. It is also customary in such cases to
caution that results of this magnitude should not become an annual
expectation, though we remain confident that your fund's long-term
prospects remain exceedingly bright.
This is the last letter to you and the other shareholders of Putnam New
Opportunities Fund that I will be signing. After more than 30 years as
Chairman of the Trustees and President of the Putnam Funds, the time has
come for me to step aside. In June, John Hill will become Chairman. John
is currently an independent Trustee and has served on the board for the
past 14 years. In addition, my son, George Putnam, III, will take on the
role of President. I am confident that the leadership of the funds will be
in exceptionally strong hands.
I will become Chairman Emeritus, remain a Putnam shareholder, and stay in
close touch with the funds. It has been my privilege to serve you.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
February 16, 2000
Report from the Fund Managers
Daniel L. Miller
Kenneth W. Lang
Jeffrey R. Lindsey
Putnam New Opportunities Fund's greatest strength has been its ability to
target sectors of the market that offer the most compelling growth
potential. This was particularly beneficial in the six months ended
December 31, 1999, when many rapidly growing U.S. companies made some of
their most astounding advances. At the close of the fiscal period, the
U.S. equity market was basking in the glow of record-breaking 1999
performance from many major indexes. The Nasdaq Composite Index -- a
common measure of technology stocks -- rose 85.6% in the 1999 calendar
year, the biggest annual gain for a major market index in U.S. history.
The Dow Jones Industrial Average gained 25.2% in 1999, a record fifth year
in a row that the blue-chip index posted a double-digit percentage gain.
And the S&P 500 Index rose 19.5%, also a record fifth straight year of
double-digit gains.
The market's impressive gains were dominated by just a few sectors,
including technology, telecommunications, wireless, and media. Your fund
was positioned to capitalize on these sectors while generally sidestepping
underperforming sectors such as health care and consumer services. While
your fund has invested in a variety of businesses, one underlying theme
served as a backdrop for nearly every stock in its portfolio: the
explosive demand for advanced technology and faster, more efficient
transmission of voice and data communications.
Total return for 6 months ended 12/31/99
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- --------------------------------------------------------------------------
51.09% 42.40% 50.63% 45.63% 50.55% 49.55% 50.73% 45.46%
- --------------------------------------------------------------------------
Past performance is not indicative of future results. Performance
information for longer periods and explanation of performance calculation
methods begin on page 6.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Electronics 14.7%
Telecommunications 11.5%
Software 11.3%
Broadcasting 9.4%
Communications
equipment 9.3%
Footnote reads:
*Based on net assets as of 12/31/99. Holdings will vary over time.
* INSATIABLE DEMAND FOR WIRELESS TECHNOLOGY
While the Internet has attracted much of the media attention, stocks in
other sectors have also experienced unprecedented growth. One example is
wireless communications -- from builders of cellular telephone networks to
companies that provide Internet-based content and applications for
wireless units such as mobile laptop computers and handsets. Makers of
wireless communications technology, such as fund holding QUALCOMM, were
among the fastest-growing stocks in 1999. QUALCOMM, whose stock price rose
more than 2,300% in 1999, pioneered CDMA (code-division multiple access)
technology, which has become the high-quality standard for the next
generation of cell phones, wireless telecom equipment, and satellite
ground stations around the world. Another fund holding profiting from the
growing wireless demand is WinStar Communications. In addition to its
Wireless Fiber service, the company also provides local and long-distance
phone services, high-speed data transport, high-speed Internet access, and
Web hosting, design, and applications services. While these holdings and
others discussed in this report were viewed favorably at the end of the
fiscal period, all are subject to review and adjustment in accordance with
the fund's investment strategy and may well vary in the future.
* INTERNET CONTINUES AS DOMINANT GROWTH FORCE
The frenzy surrounding the Internet -- and investors' love affair with
dot-com stocks -- continues to be a major theme for the U.S. equity
market. When selecting Internet stocks for your fund's portfolio, as with
any other holdings, we are careful to seek leaders with healthy business
models, strong management teams, and a solid foothold in markets with the
potential for solid long-term profits. Of particular note during the
period were companies that are building vital software for Internet users.
Check Point Software Technologies, for example, provides firewall software
that protects corporate networks from unauthorized users. It also blocks
computer viruses and other unwanted Web content and lets companies set up
virtual private networks for secure internal and remote communications.
Fund holding RealNetworks provides software that lets users listen to
audio and view video on the Internet. The company's RealPlayer software
allows broadcasters to deliver streaming audio and video content over the
Web instantaneously. Silknet Software offers products that enable
businesses to perform marketing, sales, e-commerce, and customer service
functions via the Internet. Online advertising company DoubleClick was
also a stellar performer. The company is able to collect information on
audience behavior and use the results to target placement of online ads.
Putnam New Opportunities Fund re-opens, briefly
Your fund, which had been closed for lump sum investments since 1997,
re-opened for a limited time on January 18, 2000. We proceeded cautiously
- -- only keeping the fund open until new assets reached approximately
$1 billion. This allowed us to meet the demands of potential investors while
protecting the interests of current shareholders. The fund remained open to
all investors for just 9 days, closing on January 28. At present, only current
shareholders who invest through a Putnam-authorized systematic investment plan
and participants in defined contribution plans are permitted to make new
investments in the fund.
Lipper ranked Putnam New Opportunities Fund's class A shares 60 out of 1,149
(top 6%), 64 out of 730 (top 9%), and 34 out of 449 (top 8%) growth funds
tracked for 1-, 3-, and 5-year performance, respectively, as of 12/31/99.
Lipper is an industry research firm whose rankings are based on total return
performance, vary over time, and do not reflect the effects of sales charges.
Performance of other share classes will vary. Past performance is not
indicative of future results. The fund was not ranked over longer periods.
Perhaps less glamorous than Internet businesses but just as vital to the
explosion in new technology are data storage companies. Fund holdings EMC
Corp., Veritas Software, and Network Appliance provide services and
software that help businesses manage and store computer data. Veritas
software also guards computer networks against data loss from crashes and
errors and expedites data recovery. These storage companies have undergone
phenomenal growth due in large part to new demands from Internet service
providers and corporate intranets.
The Wall Street Journal praises Putnam New Opportunities Fund
Since it was introduced almost 10 years ago, Putnam New Opportunities Fund has
compiled an impressive performance record. In fact, The Wall Street Journal
recently featured it as the best-performing diversified stock fund of the 1990s
based on cumulative performance.* "Since its inception in August 1990, this
fund has outperformed longer-standing portfolios to produce a cumulative gain
of 1,092% through December 9, according to Lipper," said the article, entitled
"Decade's top 10 mutual funds delivered growth with flexibility." The article,
which appeared in the December 19, 1999, edition, went on to say: "Right out of
the starting gate, manager Dan Miller -- who still lead manages the fund --
decided to buy fast-growing companies of all market capitalizations." As
Putnam New Opportunities Fund faces its second decade in operation, it
continues to pursue the same strategy that made it so successful in the 1990s:
investing in fast-growing companies of all sizes that are believed to offer
exceptional long-term growth potential.
*See page 6 of this report for complete performance information and page 3 for
ranking information.
* TRADITIONAL MEDIA COMPANIES DELIVER STRONG RETURNS
In the media sector of the fund's portfolio, traditional giants such as
Infinity Broadcasting and CBS Corp. were standouts, as were smaller
businesses such as Citadel, a radio broadcaster that owns and operates
commercial stations in midsize U.S. markets. Media companies have
benefited from the growth in advertising from Internet companies as well
as from pharmaceutical firms. Drug companies have increased their
advertising dramatically since 1997, when the Food and Drug Administration
eased direct-to-consumer advertising regulations.
Also delivering strong performance in the fund's media sector were cable
programming companies such as AT&T-Liberty Media. Partially owned by AT&T
Corp., this company holds equity positions in nearly 100 cable channels,
including BET, Discovery Channel, E!, Encore, QVC, and USA Networks.
Liberty also has numerous positions in overseas cable systems, many of
which are in their infancy and are expected to experience rapid growth.
The company also has 95% ownership of Liberty Digital, which includes
music and online properties.
* GROWTH DYNAMICS REMAIN EXCITING, BUT MORE LIKELIHOOD OF VOLATILITY
The first half of fiscal 2000 has provided one of the most exciting
environments in recent years for aggressive growth funds. Solid corporate
earnings and continued demand for new technology should continue to drive
the major U.S. stock indexes in the months ahead. Recovering overseas
economies and continued economic strength in the United States also
contribute to a generally optimistic outlook.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
QUALCOMM
Communications equipment
AT&T Corp. -- Liberty Media Group
Cable television
Clear Channel Communications, Inc.
Broadcasting
General Electric Co.
Conglomerate
JDS Uniphase Corp.
Electronics
Microsoft Corp.
Software
Verisign, Inc.
Technology services
CBS Corp.
Broadcasting
Nokia Corp.
Communications equipment
Infinity Broadcasting Corp.
Broadcasting
Footnote reads:
These holdings represent 21.4% of the fund's net assets as of 12/31/99.
Portfolio holdings will vary over time.
It is important to note, however, that exceptional periods of growth --
like that we've experienced in the first half of the fiscal year -- are
often followed by periods of volatility. In addition, a much-anticipated
series of Federal Reserve Board interest-rate increases could temper stock
gains as companies face steeper borrowing costs and equity investors shift
money into higher-yielding bonds. With these factors in mind, we enter the
second half of fiscal 2000 with a strategic eye on market conditions while
continuing to target the most compelling growth opportunities.
The views expressed here are exclusively those of Putnam Management. They
are not meant as investment advice. Although the described holdings were
viewed favorably as of 12/31/99, there is no guarantee the fund will
continue to hold these securities in the future. This fund invests all or
a portion of its assets in small or midsize companies. Such investments
increase the risk of greater price fluctuations.
Performance summary
This section provides information about your fund's performance, which should
always be considered in light of its investment strategy. Putnam New
Opportunities Fund is designed for investors seeking long-term capital
appreciation primarily through common stock investments in companies in
economic sectors with above-average long-term growth potential.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 12/31/99
Class A Class B Class C Class M
(inception dates) (8/31/90) (3/1/93) (7/26/99) (12/1/94)
NAV POP NAV CDSC NAV CDSC NAV POP
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 months 51.09% 42.40% 50.63% 45.63% 50.55% 49.55% 50.73% 45.46%
- -----------------------------------------------------------------------------------------
1 year 69.64 59.91 68.62 63.62 68.41 67.41 68.81 62.91
- -----------------------------------------------------------------------------------------
5 years 319.26 295.16 304.45 302.45 303.89 303.89 308.82 294.45
Annual average 33.20 31.63 32.24 32.11 32.21 32.21 32.53 31.58
- -----------------------------------------------------------------------------------------
Life of fund 1239.69 1162.80 1149.26 1149.26 1149.44 1149.44 1174.63 1129.73
Annual average 32.07 31.23 31.08 31.08 31.08 31.08 31.36 30.86
- -----------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 12/31/99
Russell Midcap Consumer
Growth Index price index
- ------------------------------------------------------------------------
6 months 32.49% 1.56%
- ------------------------------------------------------------------------
1 year 51.29 2.80
- ------------------------------------------------------------------------
5 years 243.93 12.76
Annual average 28.03 2.43
- ------------------------------------------------------------------------
Life of fund 533.16 28.27
Annual average 21.86 2.70
- ------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Returns for class A and class M
shares reflect the current maximum initial sales charges of 5.75% and
3.50%, respectively. Class B share returns for the 1-, 5-, and 10-year
(where available) and life-of-fund periods reflect the applicable
contingent deferred sales charge (CDSC), which is 5% in the first year,
declines to 1% in the sixth year, and is eliminated thereafter. Returns
shown for class B and class M shares for periods prior to their inception
are derived from the historical performance of class A shares, adjusted to
reflect both the initial sales charge or CDSC, if any, currently
applicable to each class and in the case of class B and class M shares the
higher operating expenses applicable to such shares. For class C shares,
returns for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect both the
CDSC currently applicable to class C shares, which is 1% for the first
year and is eliminated thereafter, and the higher operating expenses
applicable to class C shares. All returns assume reinvestment of
distributions at NAV. Investment return and principal value will fluctuate
so that an investor's shares when redeemed may be worth more or less than
their original cost.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 12/31/99
Class A Class B Class C Class M
- -----------------------------------------------------------------------------
Distributions (number) 1 1 1 1
- -----------------------------------------------------------------------------
Income -- -- -- --
- -----------------------------------------------------------------------------
Capital gains
Long-term $7.30 $7.30 $7.30 $7.30
- -----------------------------------------------------------------------------
Short-term -- -- -- --
- -----------------------------------------------------------------------------
Total $7.30 $7.30 $7.30 $7.30
- -----------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- -----------------------------------------------------------------------------
6/30/99 $65.61 $69.61 $62.51 $ -- $64.05 $66.37
- -----------------------------------------------------------------------------
7/26/99* -- -- -- 65.31 -- --
- -----------------------------------------------------------------------------
12/31/99 90.95 96.50 85.99 90.65 88.37 91.58
- -----------------------------------------------------------------------------
*Inception of class C shares.
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are subject
to a contingent deferred sales charge only if the shares are redeemed
during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the 5.75% maximum sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B or C shares and assumes redemption at the end of
the period. Your fund's class B 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. The CDSC for class C shares is 1% for one year after
purchase.
Comparative benchmarks
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Russell Midcap Growth Index measures the performance of Russell Midcap
Index companies with higher price-to-book ratios and higher forecasted
growth values. The index assumes reinvestment of all distributions and
interest payments and does not take in account brokerage fees or taxes.
Securities in the fund do not match those in the index and performance of
the fund will differ. It is not possible to invest directly in an index.
Welcome to www.putnaminv.com
Now you can use your PC to get up-to-date information about
your funds, learn more about investing and retirement planning,
and access market news and economic outlooks from Putnam.
VISIT PUTNAM'S SITE ON THE WORLD WIDE WEB FOR:
* the benefits of investing with Putnam
* Putnam's money management philosophy
* complete fund information, daily pricing and long-term performance
* your current account value, portfolio value and transaction history
* the latest on new funds and other Putnam news
You can also read Putnam economist Dr. Robert Goodman's commentary and
Putnam's Capital Markets outlook, search for a particular fund by name
or objective, use our glossary to decode investment terms . . . and much
more.
The site can be accessed through any of the major online services (America
Online, CompuServe, Prodigy) that offer web access. Of course, you can also
access it via Netscape or Microsoft Internet Explorer, using an independent
Internet service provider.
New features will be added to the site regularly. So be sure to bookmark us at
http://www.putnaminv.com
A guide to the financial statements
These sections of the report constitute the fund's financial
statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-end funds, a separate
table is provided for each share class.
<TABLE>
<CAPTION>
The fund's portfolio
December 31, 1999 (Unaudited)
COMMON STOCKS (98.5%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Advertising and Marketing Services (1.1%)
- --------------------------------------------------------------------------------------------------------------------------
772,200 DoubleClick, Inc. (NON) $ 195,414,863
231,596 Engage Technologies, Inc. (NON) 13,895,760
2,512,500 Lamar Advertising Co. (NON) 152,163,281
---------------
361,473,904
Airlines (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
1,389,690 Ryanair Holdings, PLC ADR (Ireland) (NON) 76,606,661
Banking (1.5%)
- --------------------------------------------------------------------------------------------------------------------------
3,870,100 Citigroup, Inc. 215,032,431
715,500 Firstar Corp. 15,114,938
3,381,020 National Commerce Bancorporation 76,706,891
2,630,740 TCF Financial Corp. 65,439,658
1,869,700 Zions Bancorp 110,662,869
---------------
482,956,787
Biotechnology (2.2%)
- --------------------------------------------------------------------------------------------------------------------------
4,437,800 Amgen, Inc. (NON) 266,545,363
568,300 Biogen, Inc. 48,021,350
795,600 Biovail Corp. International (Canada) (NON) 74,587,500
786,000 Genentech, Inc. (NON) 105,717,000
1,005,620 QLT PhotoTherapeutics Inc. (Canada) (NON) 59,080,175
1,195,130 Sepracor, Inc. (NON) 118,541,957
1,140,000 Transkaryotic Therapies, Inc. (NON) (AFF) 43,890,000
---------------
716,383,345
Broadcasting (9.4%)
- --------------------------------------------------------------------------------------------------------------------------
4,981,920 AMFM, Inc. (NON) 389,835,240
8,653,940 CBS Corp. (NON) 553,311,289
905,850 Citadel Communications Corp. (NON) 58,767,019
9,485,600 Clear Channel Communications, Inc. (NON) 846,589,800
1,207,600 Echostar Communications Corp. Class A (NON) 117,741,000
1,420,380 Entercom Communications Corp. (NON) 93,745,080
884,600 Hispanic Broadcasting Corp. (NON) 81,576,706
15,250,433 Infinity Broadcasting Corp. Class A (NON) 551,875,044
2,036,100 Univision Communications Inc. Class A (NON) 208,063,969
1,750,400 WestWood One, Inc. (NON) 133,030,400
---------------
3,034,535,547
Cable Television (3.9%)
- --------------------------------------------------------------------------------------------------------------------------
1,723,110 Adelphia Communications Corp. (NON) 113,079,094
14,949,520 AT&T Corp. Liberty Media Group Class A (NON) 848,385,260
3,930,000 Comcast Corp. Class A 198,710,625
1,503,800 USA Networks, Inc. (NON) 83,084,950
---------------
1,243,259,929
Capital Equipment (2.8%)
- --------------------------------------------------------------------------------------------------------------------------
2,429,100 Applied Materials, Inc. (NON) 307,736,606
1,639,000 ASM Lithography Holding N.V. (Netherlands) (NON) 186,436,250
1,920,180 KLA Tencor Corp. (NON) 213,860,048
2,841,300 Teradyne, Inc. (NON) 187,525,800
---------------
895,558,704
Communications Equipment (9.3%)
- --------------------------------------------------------------------------------------------------------------------------
2,070,380 ADC Telecommunications, Inc. (NON) 150,231,949
1,939,400 Advanced Fibre Communications (NON) 86,666,938
249,609 Brocade Communications Systems (NON) 44,180,793
879,800 CIENA Corp. (NON) 50,588,500
3,897,100 Cisco Systems, Inc. (NON) 417,476,838
1,994,500 Comverse Technology, Inc. (NON) 288,703,875
449,900 Extreme Networks, Inc. (NON) 37,566,650
278,900 Juniper Networks, Inc. (NON) 94,826,000
3,588,100 Lucent Technologies, Inc. 268,434,731
2,909,500 Nokia Corp. ADR (Finland) 552,805,000
4,904,424 QUALCOMM, Inc. (NON) 863,791,677
594,717 Reback Networks, Inc. (NON) 105,562,268
508,100 Tellabs, Inc. (NON) 32,621,468
---------------
2,993,456,687
Computers (3.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,541,200 Dell Computer Corp. (NON) 129,601,200
2,973,100 EMC Corp. (NON) 324,811,175
1,540,540 Network Appliance, Inc. (NON) 127,961,104
6,821,500 Sun Microsystems, Inc. (NON) 528,239,906
40,897 VA Linux Systems, Inc. (NON) 8,450,343
---------------
1,119,063,728
Conglomerates (3.2%)
- --------------------------------------------------------------------------------------------------------------------------
4,658,300 General Electric Co. 720,871,925
7,666,600 Tyco International Ltd. 298,039,075
---------------
1,018,911,000
Consumer Finance (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
2,135,190 Finova Group, Inc. 75,799,245
269,340 NextCard, Inc. (NON) 7,777,193
---------------
83,576,438
Consumer Goods (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
1,672,900 Colgate-Palmolive Co. 108,738,500
3,047,900 Estee Lauder Cos. Class A 153,728,456
---------------
262,466,956
Consumer Services (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
596,300 Stamps.com, Inc. (NON) 24,820,988
535,900 TMP Worldwide Inc. (NON) 76,097,800
---------------
100,918,788
Educational Services (--%)
- --------------------------------------------------------------------------------------------------------------------------
211,100 CBT Group PLC ADR (Ireland) (NON) 7,071,850
247,700 ITT Educational Services, Inc. (NON) 3,823,869
---------------
10,895,719
Electric Utilities (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,543,962 Calpine Corp. (NON) 162,813,568
Electronics (14.7%)
- --------------------------------------------------------------------------------------------------------------------------
1,315,600 Altera Corp. (NON) 65,204,425
3,158,800 Analog Devices, Inc. (NON) 293,768,400
1,051,480 Applied Micro Circuits Corp. (NON) 133,800,830
362,100 Broadcom Corp. (NON) 98,626,988
6,535,880 Celestica Inc. (Canada) (NON) 362,741,340
2,325,020 E-Tek Dynamics, Inc. (NON) 313,005,818
3,796,200 Flextronics International Ltd. (NON) 174,625,200
2,219,900 Intel Corp. 182,725,519
2,159,660 Jabil Circuit, Inc. (NON) 157,655,180
4,402,800 JDS Uniphase Corp. (NON) 710,226,675
3,609,680 Linear Technology Corp. (NON) 258,317,725
6,250,000 Maxim Integrated Products, Inc. (NON) 294,921,875
1,192,800 Micrel, Inc. (NON) 67,915,050
2,448,200 Motorola, Inc. 360,497,450
1,166,800 PMC-Sierra, Inc. (NON) 187,052,625
59,991 QLogic Corp. (NON) 9,591,061
656,400 RF Micro Devices, Inc. (NON) 44,922,375
1,351,700 Sanmina Corp. (NON) 135,001,038
253,000 Sawtek, Inc. (NON) 16,840,313
884,400 SDL, Inc. (NON) 192,799,200
2,193,590 Solectron Corp. (NON) 208,665,249
2,652,100 Texas Instruments, Inc. 256,922,188
1,091,160 Vitesse Semiconductor Corp. (NON) 57,217,703
3,380,380 Xilinx, Inc. (NON) 153,701,653
---------------
4,736,745,880
Entertainment (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
1,655,200 International Speedway Corp. Class A 83,380,700
2,309,600 SFX Entertainment, Inc. Class A (NON) 83,578,650
---------------
166,959,350
Financial (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
3,838,400 Intuit, Inc. (NON) 230,064,100
Gaming & Lottery (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
4,123,880 Harrah's Entertainment, Inc. (NON) 109,025,078
Health Care Services (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
3,266,200 IMS Health, Inc. 88,799,813
2,276,470 Lincare Holdings, Inc. (NON) 78,965,053
---------------
167,764,866
Insurance (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
1,608,000 American International Group, Inc. 173,865,000
Investment Banking/Brokerage (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
2,622,300 Schwab (Charles) Corp. 100,630,763
Lodging/Tourism (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
4,165,100 Extended Stay America, Inc. (NON) 31,758,888
1,440,800 Four Seasons Hotels, Inc. (Canada) (NON) 76,722,600
---------------
108,481,488
Media (3.1%)
- --------------------------------------------------------------------------------------------------------------------------
86,367 About.com, Inc. (NON) 7,751,438
3,848,900 America Online, Inc. (NON) 290,351,394
419,600 CNET, Inc. (NON) 23,812,300
1,499,000 Lycos, Inc. (NON) 119,264,188
85,997 OpenTV Corp. (NON) 6,901,259
3,556,600 Time Warner, Inc. 257,631,213
327,400 TV Guide, Inc. (NON) 14,078,200
4,292,800 Viacom, Inc. Class B (NON) 259,446,100
34,350 Yahoo! Inc. (NON) 14,862,816
---------------
994,098,908
Medical Technology (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
520,000 PE Corp.-PE Biosystems Group 62,562,500
5,265,290 Sybron International Corp. (NON) (AFF) 129,986,847
1,966,900 Waters Corp. (NON) 104,245,700
---------------
296,795,047
Natural Gas Utilities (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
2,659,500 Williams Cos., Inc. 81,280,969
Pharmaceuticals (1.9%)
- --------------------------------------------------------------------------------------------------------------------------
2,589,000 Elan Corp. PLC ADR (Ireland) (NON) 76,375,500
221,600 IDEXX Laboratories, Inc. (NON) 3,573,300
824,620 Medicis Pharmaceutical Corp. Class A (NON) 35,097,889
4,944,300 Schering-Plough Corp. 208,587,656
3,447,300 Warner-Lambert Co. 282,463,144
---------------
606,097,489
Restaurants (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
10,142,287 J.D. Wetherspoon PLC (United Kingdom) (AFF) 71,105,911
Retail (5.0%)
- --------------------------------------------------------------------------------------------------------------------------
682,700 Amazon.com, Inc. (NON) 51,970,538
213,600 Ames Department Stores, Inc. (NON) 6,154,350
6,861,960 Bed Bath & Beyond, Inc. (NON) 238,453,110
718,203 Costco Wholesale Corp. (NON) 65,536,024
1,026,400 Dayton Hudson Corp. 75,376,250
2,428,900 Dollar Tree Stores, Inc. (NON) 117,649,844
5,277,600 Home Depot, Inc. (The) 361,845,450
2,713,900 Kohls Corp. (NON) 195,909,656
233,900 Linens 'N Things, Inc. (NON) 6,929,288
2,392,000 TJX Cos., Inc. (The) 48,886,500
4,950,400 Wal-Mart Stores, Inc. 342,196,400
1,237,100 Whole Foods Market, Inc. (NON) 57,370,513
792,600 Williams-Sonoma, Inc. (NON) 36,459,600
---------------
1,604,737,523
Software (11.3%)
- --------------------------------------------------------------------------------------------------------------------------
285,167 Agile Software Corp. (NON) 61,948,075
2,897,930 Amdocs Ltd. (NON) 99,978,585
166,460 Brio Technology, Inc. (NON) 6,991,320
1,201,690 BroadVision, Inc. (NON) 204,362,406
172,480 Check Point Software Technologies Ltd. (Israel) (NON) 34,280,400
54,400 E.piphany, Inc. (NON) 12,138,000
2,186,090 Electronic Arts, Inc. (NON) 183,631,560
921,770 I2 Technologies, Inc. (NON) 179,745,150
186,303 Informatica Corp. (NON) 19,817,982
730,060 Lernout & Hauspie Speech Products N.V. (Belgium) (NON) 33,765,275
1,401,640 Macromedia, Inc. (NON) 102,494,925
102,600 Micromuse, Inc. (NON) 17,442,000
5,849,200 Microsoft Corp. (NON) 682,894,100
6,756,600 Misys PLC (United Kingdom) 105,326,002
3,266,100 Oracle Corp. (NON) 366,007,331
8,473,440 Parametric Technology Corp. (NON) 229,312,470
382,900 Phone.com, Inc. (NON) 44,392,469
1,158,300 Portal Software, Inc. (NON) 119,160,113
2,239,600 Rational Software Corp. (NON) 110,020,350
377,900 Silknet Software, Inc. (NON) 62,636,925
529,748 Software.com, Inc. (NON) 50,855,808
2,837,020 Synopsys, Inc. (NON) 189,371,085
3,779,300 VERITAS Software Corp. (NON) 540,912,313
1,172,700 Vignette Corp. (NON) 191,150,100
---------------
3,648,634,744
Technology Services (6.7%)
- --------------------------------------------------------------------------------------------------------------------------
2,030,880 Affiliated Computer Services, Inc. Class A (NON) 93,420,480
158,000 Chemdex Corp. (NON) 17,538,000
929,400 CMG Information Services, Inc. (NON) 257,327,625
2,063,000 Exodus Communications, Inc. (NON) 183,220,188
38,497 Freemarkets, Inc. (NON) 13,139,507
1,065,000 InfoSpace.com, Inc. (NON) 227,910,000
67,700 Intertrust Technologies Corp. (NON) 7,963,213
425,000 RealNetworks, Inc. (NON) 51,132,813
2,105,900 Sapient Corp. (NON) 296,800,281
4,125,300 USWeb Corp. (NON) 183,318,019
2,319,100 Verio, Inc. (NON) 107,113,431
2,908,120 VeriSign, Inc. (NON) 555,269,163
287,600 Viant Corp. (NON) 28,472,400
2,189,970 Whittman-Hart, Inc. (NON) 117,437,141
843,070 Ziff-Davis, Inc. (NON) 17,704,470
---------------
2,157,766,731
Telecommunications (11.5%)
- --------------------------------------------------------------------------------------------------------------------------
2,223,000 Allegiance Telecom, Inc. (NON) 205,071,750
3,881,870 American Tower Corp. Class A (NON) 118,639,652
224,400 CoreComm Ltd. (NON) 13,323,750
2,534,900 Covad Communications Group 144A (NON) 141,795,969
1,369,400 Focal Communications Corp. (NON) 33,036,775
4,966,403 Global Crossing Ltd. (NON) 248,320,150
5,268,200 Global TeleSystems Group, Inc. (NON) 182,411,425
282,300 Intermedia Communications, Inc. (NON) 10,956,769
617,000 Level 3 Communications, Inc. (NON) 50,516,875
3,513,900 MCI WorldCom, Inc. (NON) 186,456,319
6,770,600 McLeod, Inc. Class A (NON) 398,619,075
8,540,400 Metromedia Fiber Network, Inc. Class A (NON) 409,405,425
1,543,300 NEXTEL Communications, Inc. Class A (NON) 159,152,813
6,571,620 NEXTLINK Communications, Inc. Class A (NON) 545,855,186
1,136,200 NorthPoint Communications Group, Inc. (NON) 27,268,800
1,612,800 NTL, Inc. (NON) 201,196,800
1,212,740 Pinnacle Holdings, Inc. (NON) 51,389,858
184,300 PSINet, Inc. (NON) 11,380,525
251,900 Spectrasite Holdings, Inc. (NON) 2,739,413
3,687,100 Sprint Corp. 248,187,901
3,131,100 Sprint PCS (NON) 320,937,750
1,690,780 WinStar Communications, Inc. (NON) 127,231,195
---------------
3,693,894,175
Transaction Processing (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
1,011,600 CheckFree Holdings Corp. (NON) 105,712,200
4,818,295 Concord EFS, Inc. (NON) 124,071,096
---------------
229,783,296
---------------
Total Common Stocks (cost $14,152,890,204) $31,740,609,079
SHORT-TERM INVESTMENTS (1.0%) (a)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$50,000,000 Federal Home Loan Mortgage Corp. for an effective
yield of 5.74%, February 15, 2000 $ 49,641,250
50,000,000 Federal Home Loan Mortgage Corp. for an effective
yield of 5.53%, February 9, 2000 49,700,458
142,429,000 Interest in $578,946,000 joint repurchase agreement dated
December 31, 1999 with Morgan (J.P.) & Co. Inc. due
January 3, 2000 with respect to various U.S. Treasury
obligations -- maturity value of $142,458,673 for an
effective yield of 2.50% 142,429,000
75,000,000 Interest in $75,000,000 repurchase agreement dated
December 31, 1999 with S.B.C. Warburg Inc. due
January 3, 2000 with respect to various U.S. Treasury
obligations -- maturity value of $75,025,000 for an
effective yield of 4.00% 75,000,000
---------------
Total Short-Term Investments (cost $316,770,708) $ 316,770,708
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $14,469,660,912) (b) $32,057,379,787
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $32,207,575,043.
(b) The aggregate identified cost on a tax basis is $14,485,878,500,resulting in gross unrealized appreciation and
depreciation of $17,761,172,209 and $189,670,922, respectively, or net unrealized appreciation of $17,571,501,287.
(NON) Non-income-producing security.
(AFF) Affiliated companies (Note 5).
ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign
securities on deposit with a domestic custodian bank.
- -------------------------------------------------------------------------------
Futures Contracts Outstanding at December 31, 1999 (Unaudited)
Aggregate Face Expiration Unrealized
Total Value Value Date Appreciation
- -------------------------------------------------------------------------------
S&P 500 Index (Long) $125,043,850 $124,560,794 Mar-00 $483,056
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
December 31, 1999 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $14,469,660,912) (Note 1) $32,057,379,787
- -----------------------------------------------------------------------------------------------
Cash 3,277,878
- -----------------------------------------------------------------------------------------------
Dividends, interest and other receivables 4,217,372
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 33,874,841
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 462,475,913
- -----------------------------------------------------------------------------------------------
Receivable for variation margin 112,643
- -----------------------------------------------------------------------------------------------
Total assets 32,561,338,434
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 153,000,850
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 148,984,468
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 30,743,937
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 2,244,867
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 215,205
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 14,496
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 18,001,749
- -----------------------------------------------------------------------------------------------
Other accrued expenses 557,819
- -----------------------------------------------------------------------------------------------
Total liabilities 353,763,391
- -----------------------------------------------------------------------------------------------
Net assets $32,207,575,043
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $13,739,762,271
- -----------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (101,953,584)
- -----------------------------------------------------------------------------------------------
Accumulated net realized gains on investments (Note 1) 981,564,425
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 17,588,201,931
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $32,207,575,043
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($17,940,842,972 divided by 197,260,782 shares) $90.95
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $90.95)* $96.50
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($11,892,069,718 divided by 138,289,475 shares)** $85.99
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($9,490,653 divided by 104,693 shares)** $90.65
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($712,487,281 divided by 8,062,658 shares) $88.37
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $88.37)* $91.58
- -----------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($1,652,684,419 divided by 17,885,247 shares) $92.40
- -----------------------------------------------------------------------------------------------
* 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.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended December 31, 1999 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $29,256, including dividend income
of $399,370 from investments in affiliated issuers) (Note 5) $ 21,487,662
- -----------------------------------------------------------------------------------------------
Interest 5,830,585
- -----------------------------------------------------------------------------------------------
Total investment income 27,318,247
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 56,498,636
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 14,105,833
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 148,620
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 28,658
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 16,361,290
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 38,403,220
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 11,254
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 2,004,484
- -----------------------------------------------------------------------------------------------
Reports to shareholders 207,213
- -----------------------------------------------------------------------------------------------
Registration fees 66,560
- -----------------------------------------------------------------------------------------------
Auditing 55,027
- -----------------------------------------------------------------------------------------------
Legal 64,939
- -----------------------------------------------------------------------------------------------
Postage 741,072
- -----------------------------------------------------------------------------------------------
Other 1,716,783
- -----------------------------------------------------------------------------------------------
Total expenses 130,413,589
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (1,141,758)
- -----------------------------------------------------------------------------------------------
Net expenses 129,271,831
- -----------------------------------------------------------------------------------------------
Net investment loss (101,953,584)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1, 3, and 5)
(including realized loss of $106,695,558 on
sales of investments in affiliated issuers) 1,093,398,642
- -----------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (893,003)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currency during the period 692
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 9,905,764,973
- -----------------------------------------------------------------------------------------------
Net gain on investments 10,998,271,304
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $10,896,317,720
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
December 31 June 30
1999* 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (101,953,584) $ (155,256,135)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 1,092,505,639 2,352,943,195
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 9,905,765,665 997,121,712
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 10,896,317,720 3,194,808,772
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (1,314,507,212) (332,350,742)
- ---------------------------------------------------------------------------------------------------------------
Class B (933,682,378) (257,923,945)
- ---------------------------------------------------------------------------------------------------------------
Class C (488,124) --
- ---------------------------------------------------------------------------------------------------------------
Class M (54,386,506) (14,531,244)
- ---------------------------------------------------------------------------------------------------------------
Class Y (125,842,222) (15,917,465)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 2,016,842,886 114,640,051
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 10,484,254,164 2,688,725,427
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 21,723,320,879 19,034,595,452
- ---------------------------------------------------------------------------------------------------------------
End of year (including accumulated net investment
loss of $101,953,584 and $--, respectively) $32,207,575,043 $21,723,320,879
- ---------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share December 31
operating performance (Unaudited) Year ended June 30
- ---------------------------------------------------------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $65.61 $57.68 $44.47 $42.99 $29.58 $21.88
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (.23)(c) (.32)(c) (.25) (.20)(c) (.21)(c) (.12)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 32.87 10.13 14.55 2.00 13.62 8.02
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 32.64 9.81 14.30 1.80 13.41 7.90
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (7.30) (1.88) (1.09) (.26) -- (.15)
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gains -- -- -- (.06) -- (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- -- -- (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (7.30) (1.88) (1.09) (.32) -- (.20)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $90.95 $65.61 $57.68 $44.47 $42.99 $29.58
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 51.09* 17.81 32.75 4.26 45.34 36.36
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $17,940,843 $11,817,798 $10,163,386 $7,381,624 $4,752,611 $1,341,877
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .44* .93 .98 1.06 1.11 1.13
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.32)* (.56) (.49) (.48) (.54) (.55)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the year ended June 30, 1996 and thereafter includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2)
(c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during
the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share December 31
operating performance (Unaudited) Year ended June 30
- ---------------------------------------------------------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $62.51 $55.42 $43.08 $41.96 $29.09 $21.68
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (.42)(c) (.66)(c) (.62) (.49)(c) (.48)(c) (.23)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 31.20 9.63 14.05 1.93 13.35 7.84
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 30.78 8.97 13.43 1.44 12.87 7.61
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (7.30) (1.88) (1.09) (.26) -- (.15)
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gains -- -- -- (.06) -- (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- -- -- (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (7.30) (1.88) (1.09) (.32) -- (.20)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $85.99 $62.51 $55.42 $43.08 $41.96 $29.09
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 50.63* 17.01 31.78 3.50 44.24 35.34
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $11,892,070 $8,382,292 $7,950,848 $6,359,447 $4,254,962 $1,013,379
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .74* 1.60 1.73 1.81 1.87 1.87
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.62)* (1.23) (1.24) (1.23) (1.30) (1.30)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the year ended June 30, 1996 and thereafter includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2)
(c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during
the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share July 26, 1999+
operating performance to December 31
- ---------------------------------------------------------------------------------------------------------------------------------
1999
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $65.31
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (.41)(c)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 33.05
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 32.64
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (7.30)
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gains --
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (7.30)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $90.65
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 51.31*
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $9,491
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .70*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.60)*
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 27.93*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the year ended June 30, 1996 and thereafter includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2)
(c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during
the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share December 31 Dec. 1,1994+
operating performance (Unaudited) Year ended June 30 to June 30
- ---------------------------------------------------------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $64.05 $56.65 $43.91 $42.66 $29.51 $24.72
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (.40)(c) (.58)(c) (.49) (.40)(c) (.40)(c) (.05)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 32.02 9.86 14.32 1.97 13.55 5.04
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 31.62 9.28 13.83 1.57 13.15 4.99
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (7.30) (1.88) (1.09) (.26) -- (.15)
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gains -- -- -- (.06) -- (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- -- -- (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (7.30) (1.88) (1.09) (.32) -- (.20)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $88.37 $64.05 $56.65 $43.91 $42.66 $29.51
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 50.73* 17.19 32.09 3.75 44.56 20.40*
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $712,487 $491,209 $444,325 $337,535 $210,404 $16,011
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .69* 1.43 1.48 1.56 1.64 .94*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.57)* (1.06) (.99) (.98) (1.06) (.53)*
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the year ended June 30, 1996 and thereafter includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2)
(c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during
the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS Y
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share December 31 July 19,1994+
operating performance (Unaudited) Year ended June 30 to June 30
- ---------------------------------------------------------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $66.49 $58.28 $44.82 $43.21 $29.66 $22.59
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (.14)(c) (.19)(c) (.13)(c) (.09)(c) (.11)(c) (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 33.35 10.28 14.68 2.02 13.66 7.31
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 33.21 10.09 14.55 1.93 13.55 7.27
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (7.30) (1.88) (1.09) (.26) -- (.15)
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gains -- -- -- (.06) -- (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- -- -- (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (7.30) (1.88) (1.09) (.32) -- (.20)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $92.40 $66.49 $58.28 $44.82 $43.21 $29.66
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 51.26* 18.11 33.05 4.54 45.68 32.42*
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,652,684 $1,032,022 $476,037 $254,126 $118,640 $24,538
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) (b) .31* .68 .73 .81 .86 .83*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.19)* (.32) (.24) (.23) (.29) (.26)*
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the year ended June 30, 1996 and thereafter includes amounts paid through
expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2)
(c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during
the period.
</TABLE>
Notes to financial statements
December 31, 1999 (Unaudited)
Note 1
Significant accounting policies
Putnam New Opportunities Fund (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 the judgment of Putnam Investment Management, Inc.
("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of
Putnam Investments, Inc. possess above-average, long-term growth
potential.
The fund, which is at present generally closed to new investors, offers
class A, class B, class C, class M and class Y shares. The fund began
offering class C shares on July 26, 1999. Class A shares are sold with a
maximum front-end sales charge of 5.75%. Class B shares, which convert to
class A shares after approximately eight years, 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. Class C shares are
subject to the same fees and expenses as class B shares, except that class
C shares have a one-year 1.00% contingent deferred sales charge and do not
convert to class A shares. Class M shares are sold with a maximum front
end sales charge of 3.50% and pay an ongoing distribution fee that is
higher than class A shares but lower than class B and class C shares.
Class Y shares, which are sold at net asset value, are generally subject
to the same expenses as class A, class B, class C and class M shares, but
do not bear a distribution fee. Class Y shares are sold to defined
contribution plans that invest at least $150 million in a combination of
Putnam funds and other accounts managed by affiliates of Putnam
Management.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
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. Shares of each class would receive their pro-rata share of the
net assets of the fund, if that fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period.
Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sales price on its principal exchange, or if no sales are
reported -- as in the case of some securities traded over-the-counter --
the last reported bid price. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which
approximates market value. Other investments, including restricted
securities, are stated at fair value following procedures approved by the
Trustees.
B) 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 companies and certain other accounts managed by
Putnam Management. These balances may be invested in one or more
repurchase agreements and/or short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, 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 accrued interest. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. Putnam Management 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.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis.
Interest income is recorded on the accrual basis. 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.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The fund
does not isolate that portion of realized or unrealized gains or losses
resulting from changes in the foreign exchange rate on investments from
fluctuations arising from changes in the market prices of the securities.
Such gains and losses are included with the net realized and unrealized
gain or loss on investments. Net realized gains and losses on foreign
currency transactions represent net realized exchange gains or losses on
closed forward currency contracts, disposition of foreign currencies and
the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized appreciation
and depreciation of assets and liabilities in foreign currencies arise
from changes in the value of open forward currency contracts and assets
and liabilities other than investments at the period end, resulting from
changes in the exchange rate. Investments in foreign securities involve
certain risks, including those related to economic instability,
unfavorable political developments, and currency fluctuations, not present
with domestic investments.
F) Line of credit The fund has entered into a committed line of credit
with certain banks. This line of credit agreement includes restrictions
that the fund maintain an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the six months
ended December 31, 1999, the fund had no borrowings against the line of
credit.
G) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal 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, as amended. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held nor for excise tax on income and capital
gains.
H) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid at least annually. 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.
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.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment advisory
services 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 the next $5 billion, 0.475% of the
next $5 billion, 0.455% of the next $5 billion, 0.44% of the next $5
billion, 0.43% of the next $5 billion, 0.42% of the next $5 billion, 0.41%
of the next $5 billion, 0.40% of the next $5 billion, and 0.39%
thereafter.
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
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.
For the six months ended December 31, 1999, fund expenses were reduced by
$1,141,758 under expense offset arrangements with PFTC and brokerage
service arrangements. Investor servicing and custodian fees reported in
the Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered
into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $7,430
has been allocated to the fund, and an additional fee for each Trustee's
meeting attended. Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and meeting
fees for the three years preceding retirement. Pension expense for the
fund is included in Compensation of Trustees in the Statement of
operations. Accrued pension liability is included in Payable for
compensation of Trustees in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B, class C and class M shares pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the Plans 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 shares of the fund. The Plans provide for payments by the
fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00%,
1.00% and 1.00% of the average net assets attributable to class A, class
B, class C and class M shares, respectively. The Trustees have approved
payment by the fund at an annual rate of 0.25%, 0.85%, 1.00% and 0.75% of
the average net assets attributable to class A, class B, class C and class
M shares, respectively.
For the six months ended December 31, 1999, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $755,040 and $25,463
from the sale of class A and class M shares, respectively, and received
$4,474,708 and $170 in contingent deferred sales charges from redemptions
of class B and class C shares, respectively. A deferred sales charge of up
to 1% is assessed on certain redemptions of class A shares. For the six
months ended December 31, 1999, Putnam Mutual Funds Corp., acting as
underwriter received $19,222 on class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended December 31, 1999, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $6,641,935,927 and $7,173,909,291, respectively.
There were no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At December 31, 1999, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Six months ended December 31, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 22,965,428 $1,687,981,271
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 15,449,159 1,255,087,472
- -----------------------------------------------------------------------------
38,414,587 2,943,068,743
Shares
repurchased (21,288,317) (1,511,994,685)
- -----------------------------------------------------------------------------
Net increase 17,126,270 $1,431,074,058
- -----------------------------------------------------------------------------
Year ended June 30, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 45,594,076 $2,572,784,440
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 6,046,651 317,327,118
- -----------------------------------------------------------------------------
51,640,727 2,890,111,558
Shares
repurchased (47,716,775) (2,689,861,510)
- -----------------------------------------------------------------------------
Net increase 3,923,952 $ 200,250,048
- -----------------------------------------------------------------------------
Six months ended December 31, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 5,273,093 $371,936,878
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 10,606,943 815,037,985
- -----------------------------------------------------------------------------
15,880,036 1,186,974,863
Shares
repurchased (11,680,665) (806,378,332)
- -----------------------------------------------------------------------------
Net increase 4,199,371 $380,596,531
- -----------------------------------------------------------------------------
Year ended June 30, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 9,985,427 $ 532,229,736
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,483,603 224,942,388
- -----------------------------------------------------------------------------
14,469,030 757,172,124
Shares
repurchased (23,849,418) (1,272,000,118)
- -----------------------------------------------------------------------------
Net decrease (9,380,388) $(514,827,994)
- -----------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations)
to December 31, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 103,453 $7,950,316
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 5,221 422,983
- -----------------------------------------------------------------------------
108,674 8,373,299
Shares
repurchased (3,981) (307,872)
- -----------------------------------------------------------------------------
Net increase 104,693 $8,065,427
- -----------------------------------------------------------------------------
Six months ended December 31, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 989,865 $67,393,131
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 650,643 51,368,282
- -----------------------------------------------------------------------------
1,640,508 118,761,413
Shares
repurchased (1,246,563) (85,429,994)
- -----------------------------------------------------------------------------
Net increase 393,945 $33,331,419
- -----------------------------------------------------------------------------
Year ended June 30, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 1,659,416 $ 90,965,413
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 266,448 13,693,360
- -----------------------------------------------------------------------------
1,925,864 104,658,773
Shares
repurchased (2,100,915) (116,130,595)
- -----------------------------------------------------------------------------
Net decrease (175,051) $(11,471,822)
- -----------------------------------------------------------------------------
Six months ended December 31, 1999
- -----------------------------------------------------------------------------
Class Y Shares Amount
- -----------------------------------------------------------------------------
Shares sold 5,532,291 $404,075,572
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,525,129 125,842,222
- -----------------------------------------------------------------------------
7,057,420 529,917,794
Shares
repurchased (4,694,126) (366,142,343)
- -----------------------------------------------------------------------------
Net increase 2,363,294 $163,775,451
- -----------------------------------------------------------------------------
Year ended June 30, 1999
- -----------------------------------------------------------------------------
Class Y Shares Amount
- -----------------------------------------------------------------------------
Shares sold 10,843,488 $643,820,161
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 299,803 15,917,465
- -----------------------------------------------------------------------------
11,143,291 659,737,626
Shares
repurchased (3,789,291) (219,047,807)
- -----------------------------------------------------------------------------
Net increase 7,354,000 $440,689,819
- -----------------------------------------------------------------------------
Note 5
Transactions with Affiliated Companies
<TABLE>
<CAPTION>
Transactions during the period with companies in which the fund owned at
least 5% of the voting securities were as follows:
Purchase Sales Dividend Market
Affiliates cost cost Income Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Celestica, Inc. $22,001,286 $ 1,953,664 $ -- $ --
Extended Stay America, Inc. -- 15,961,970 -- --
Intuit, Inc. 10,675 -- -- --
ITT Educational Services, Inc. -- 50,661,200 -- --
J.D. Wetherspoon Plc 3,689 -- 263,300 71,105,911
Medicis Pharmaceutical Corp.
Class A -- 26,221,371 -- --
Micrel, Inc. -- -- -- --
Pediatrix Medical Group, Inc. -- 32,455,977 -- --
Snyder Communications, Inc. -- 160,863,124 -- --
Stewart Enterprises, Inc. Class A -- 92,105,612 136,070 --
Sybron International Corp. 6,712 -- -- 129,986,847
Transkaryotic Therapies, Inc. 3,970,211 -- -- 43,890,000
USWEB 16,890,602 2,064,659 -- --
Westwood One, Inc. 9,620,991 -- -- --
Whittman-Hart, Inc. 17,477,619 28,540,253 -- --
- -------------------------------------------------------------------------------------------------------
Totals $69,981,785 $410,827,830 $399,370 $244,982,758
- -------------------------------------------------------------------------------------------------------
</TABLE>
The Putnam family of funds
The following is a complete list of Putnam's open-end mutual funds. Please
call your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus
for any Putnam fund. It contains more complete information, including charges
and expenses. Please read it carefully before you invest or send money.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Century Growth Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government
Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund *
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund**
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Diversified Income Trust II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply. Contact
Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at www.putnaminv.com.
Fund information
WEB SITE
www.putnaminv.com
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
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Daniel L. Miller
Vice President and Fund Manager
Kenneth W. Lang
Vice President and Fund Manager
Jeffrey R. Lindsey
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
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 objectives, and operating policies of the fund, and
the most recent copy of Putnam's Quarterly Performance Summary. For more
information or to request a prospectus, call toll free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
SA013-58388 852/358/983/526 2/00
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
- ---------------------------------------------------------------------------
Putnam New Opportunities Fund
Supplement to Semiannual Report dated 12/31/99
The following information has been prepared to provide class Y shareholders
with a performance overview specific to their holdings. Class Y shares are
offered exclusively to defined contribution plans investing $150 million or
more in one or more of Putnam's funds or private accounts. Performance of
class Y shares, which incur neither a front-end load, distribution fee, nor
contingent deferred sales charge, will differ from performance of class A,
B, and M shares, which are discussed more extensively in the annual report.
SEMIANNUAL RESULTS AT A GLANCE
- ---------------------------------------------------------------------------
Total return
for periods ended 12/31/99 NAV
6 months 51.26%
1 year 70.09
5 years 324.45
Annual average 33.53
Life of fund (since class A inception, 8/31/90) 1258.40
Annual average 32.26
Share value: NAV
6/30/99 $66.49
12/31/99 92.40
- ---------------------------------------------------------------------------
Distributions: No. Income Capital gains Total
1 $7.30 -- $7.30
- ---------------------------------------------------------------------------
Please note that past performance does not indicate future results. Returns
shown for class Y shares for periods prior to their inception are derived
from the historical performance of class A shares, adjusted to reflect the
initial sales charge currently applicable to class A shares. These returns
have not been adjusted to reflect differences in operating expenses which,
for class Y shares, typically are lower than the operating expenses
applicable to class A shares. All returns assume reinvestment of
distributions at net asset value. Performance data reflects an expense
limitation previously in effect. Without the expense limitation, total
returns would have been lower. Investment return and principal value will
fluctuate so your shares, when redeemed, may be worth more or less than
their original cost. See full report for information on comparative
benchmarks. If you have questions, please consult your fund prospectus or
call Putnam toll free at 1-800-752-9894.
