Putnam
Overseas
Growth
Fund
[GRAPHIC OMITTED: ARTWORK]
SEMIANNUAL REPORT
December 31, 1995
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "Putnam Overseas Growth Fund's three-year trailing returns are among
the highest in the foreign stock group, while its three-year risk score
is among the mildest. It has earned these numbers by its consistency."
-- Morningstar Inc., November 10, 1995
* "Expected declines in interest rates overseas, particularly in Europe
and Japan, should bolster overseas markets, as they have over the year
in the United States. Stock markets love the prospect of cheaper money,
which tends to persuade investors to favor stocks over bonds."*
-- The New York Times, January 2, 1996
*Please see page 8 for performance information.
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio of investments owned
17 Financial statements
[GRAPHIC OMITTED: photo of George Putman
(copyright) Karsh, Ottawa]
From the Chairman
Dear Shareholder:
The dramatic rise in the U.S. stock market throughout 1995 tended to
overshadow the generally positive performance of many of the world's
other equity markets during the year. Thus, it might be easy to overlook
the positive performance of Putnam Overseas Growth Fund during the six
months ended December 31, 1995.
Furthermore, while the U.S. market might be heading toward a pause as
investors digest the sustained advance, other markets may be poised for
further growth as your fund reaches the midpoint of fiscal 1996.
Fund Manager Justin Scott believes benign inflation will continue on the
Continent as in the United States during the next several months. In
addition, there is a growing likelihood of interest-rate cuts in Europe,
a move that may bolster economic and market prospects there.
In Asia, Japan's prospects at last seem on the rise and other economies
may continue to expand, albeit at a slower rate. Overall, Justin remains
cautiously optimistic about your fund's prospects over the remainder of
fiscal 1996.
Respectfully yours,
/s/George Putman
George Putnam
Chairman of the Trustees
February 21, 1996
Report from the Fund Manager
Justin M. Scott
While fairly strong overseas equity markets were overshadowed in 1995 by
a pronounced rally in the U.S. stock market, their performance was
certainly attractive on an absolute basis. Unlike the U.S. market, where
stock valuations currently appear somewhat extended in light of slowing
corporate earnings, international equities may have room to grow in the
months ahead.
Putnam Overseas Growth Fund was able to take advantage of the generally
positive environment. For the six months ended December 31, 1995, the
fund's class A shares provided a total return of 10.67%; its class B
shares, 10.29%; and its class M shares, 10.45%, each at net asset value.
These results were well ahead of the Morgan Stanley Capital
International's Europe, Australia and Far East (EAFE) Index, which rose
8.39% over the same period. Total return at the maximum public offering
price for class A shares was 4.30%; class B shares returned 5.29% at the
contingent deferred sales charge and class M shares, 6.57% for the
period.
* SLOWING ECONOMIES APPARENT IN CORE EUROPEAN COUNTRIES
Economic slowdown is increasingly pronounced in the major European
countries. Accordingly, we are closely monitoring macroeconomic
conditions as we invest in Europe, which currently accounts for nearly
50% of your fund's portfolio. Despite slow growth -- in many ways
because of slow growth -- we see some positive developments for stock
markets in the core European countries.
Negligible inflation has provided a relatively benign backdrop for stock
markets, as has the possibility of central bank interest rate cuts. Just
as important, however, is the gradual emergence of a European equity
culture. Indeed, companies across the Continent are seeking to increase
shareholder value by deploying their corporate assets productively,
emphasizing return on equity, and cutting inefficiencies.
We believe a number of holdings in your fund's portfolio embody this
positive attitude of companies toward their shareholders. The Dutch
airline KLM, Switzerland's Ciba-Geigy conglomerate, Union Bank of
Switzerland, and Swiss Reinsurance are all striving to improve their
returns on equity and bolster their competitiveness. We believe these
moves may help such European companies to weather otherwise weak
regional business conditions.
Within the fund's U.K. holdings, which account for more than 9% of the
portfolio, Vodafone, a cellular phone company, had strong earnings over
the year and appears poised for further gains in the months ahead.
Elsewhere, the fund's shares of Austria Mikro Systeme have faltered in
recent weeks as semiconductor manufacturers in Europe, Asia, and North
America all declined in unison. Indeed, your fund's performance over the
period was hampered slightly by technology holdings; however, we believe
they retain exceptional long-term growth potential.
Elsewhere in Europe, in several of the so-called peripheral nations, we
are finding attractively valued stocks and relatively strong economies.
Ireland today boasts one of Europe's fastest-growing economies -- we
anticipate GDP growth of some 5.5% this year -- and may continue to
benefit from European Union regional development funds. Spain, like
Ireland, may grow faster this year than many other European countries;
accordingly, we currently have positioned some 5.4% of the fund's
portfolio in Spanish equities. Spain's growth rate appears manageable,
and thus the country may enjoy stable-to-declining interest rates
throughout 1996.
[GRAPHIC OMITTED: Horizonatal bar chart TOP COUNTRY ALLOCATIONS (12/31/95)*
showing:
Japan 25.7%
United Kingdom 9.2%
France 6.0%
Spain 5.4%
Netherlands 5.3%
Switzerland 5.1%
Hong Kong 4.9%
Singapore 4.7%
*Based on percentage of net assets. Holdings will vary over time.]
* ASIA MAY BE POISED FOR MODERATE GROWTH IN 1996
After suffering for several years from an overvalued yen, falling
industrial production, and political paralysis, the Japanese stock
market has been showing some signs of renewed vigor recently. Over the
past six months, a steadily weakening yen has helped to reignite
Japanese corporate profits and spur a strong market recovery (in local
currency terms). In addition, extremely low real interest rates have had
a positive effect on market liquidity, and government assistance to
failing banks has apparently defused that issue, at least for now.
During this ongoing rebound, we have seen strong performance from your
fund's Japanese financial services holdings. However, several formerly
strong Japanese technology companies have seen stocks turn downward in
recent months. Ultimately, with improving conditions in mind, we have
maintained a significant weighting in Japan, allocating more than 25% of
the fund's portfolio there.
Elsewhere in Asian markets, Singapore, Malaysia, and Thailand struggled
to overcome different obstacles as they were forced to grapple with
too-robust economic growth. Malaysia's stock market has been
particularly volatile over the past six months. After bidding up stocks
there over first quarter of 1995, investors began to fear that the
booming economy -- GDP growth over that period was among the world's
highest -- would ignite inflation. Accordingly, we have significantly
trimmed holdings in Malaysia.
Singapore, too, had mixed results over the past six months. A more
moderate GDP growth rate is forecast for 1996. Coupled with strong
export figures, this outlook could bode well for the strength of the
country's equity market in the coming months. We have maintained
Singapore holdings at some 5% of the portfolio.
The Hong Kong market gained during your fund's semiannual period,
sparked in part by declining U.S. interest rates. One of the fund's
larger holdings within its 5% Hong Kong allocation is HSBC, a
diversified financial services company that has the potential to prosper
in the months ahead, particularly if interest rates continue to decline.
Furthermore, the deflationary land price spiral appears to have
bottomed, which is good news for Hong Kong, where property prices are an
economic bellwether.
[GRAPHIC OMITTED: Graphic list of TOP TEN HOLDINGS (12/31/95)*
Showing:
Gucci Group (Italy)
Luxury Goods
Ibedrola (Spain)
Electric company
Daiwa Securities (Japan)
Brokerage firm
Bulgari (Italy)
Luxury goods
ITO Yokado (Japan)
Supermarket operator
HSBC Holdings (Hong Kong)
Financial services
Adidas (ADS)
Athletic gear
Marui Corp. (Japan)
Retailer
Tele Danamark (Denmark)
Communications
Banco de Bilbao Vizcaya (Spain)
Financial services
Footnote reads:
These holdings represent 12.1% of the fund's assets. Portfolio holdings
will vary over time.]
* CAUSE FOR CAUTIOUS OPTIMISM IN THE COMING MONTHS
Earlier in this report, we acknowledged the strength of U.S. equities in
1995 compared with international stocks. There is some good news in this
for the international investor. The divergence between U.S. and international
valuations could bode well for the latter in the months ahead as investors
seek less expensive opportunities overseas. Indeed, there are many
high-quality international companies with global market niches that have
much room to grow -- and could well catalyze overseas markets
in 1996.
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 12/31/95, there is no guarantee the fund will
continue to hold these securities in the future. International investing
involves certain risks, including economic instability, and political
developments and currency fluctuations not present with
domestic investments.
Performance summary
Performance should always be considered in light of a fund's investment
strategy.Putnam Overseas Growth Fund is designed for investors seeking
capital appreciation through equity securities of issuers located outside
North America.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire period
and reinvested all distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 12/31/95
Class A Class B Class M
- ------------------------------------------------------------------------
Inception dates (2/28/91) (6/1/94) (12/1/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------
6 months 10.67% 4.30% 10.29% 5.29% 10.45% 6.57%
- ------------------------------------------------------------------------
1 year 13.97 7.39 13.21 8.21 13.65 9.64
- ------------------------------------------------------------------------
3 years 64.38 54.99 -- -- -- --
Annual average 18.02 15.73 -- -- -- --
- ------------------------------------------------------------------------
Life of class 62.90 53.47 13.98 9.98 14.13 10.14
Annual average 10.61 9.25 8.58 6.17 13.02 9.35
- ------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 12/31/95
Standard & Poor's MSCI EAFE Consumer
500 Index Index Price Index
- ------------------------------------------------------------------------
6 months 14.40% 8.39% 0.66%
- ------------------------------------------------------------------------
1 year 37.45 11.21 2.54
- ------------------------------------------------------------------------
3 years 53.29 58.88 8.18
Annual average 15.30 16.70 2.65
- ------------------------------------------------------------------------
Life of class A 93.41 36.89 13.87
Annual average 14.60 6.71 2.72
- ------------------------------------------------------------------------
Life of class B 41.35 11.74 4.07
Annual average 24.32 7.25 2.54
- ------------------------------------------------------------------------
Life of class M 40.15 11.90 2.54
Annual average 36.69 10.93 2.35
- ------------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. They do not take into
account any adjustment for taxes payable on reinvested distributions.
Investment returns and net asset value will fluctuate so that an
investor's shares, when sold, may be worth more or less than their
original cost. POP assumes 5.75% maximum sales charge for class A shares
and 3.50% for class M shares, which became effective 12/1/94. CDSC for
class B shares assumes the applicable sales charge, with the maximum
being 5%.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 12/31/95
Class A Class B Class M
- ------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------
Income $0.260 $0.195 $0.223
- ------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------
Long-term 0.003 0.003 0.003
- ------------------------------------------------------------------------
Short-term 0.002 0.002 0.002
- ------------------------------------------------------------------------
Total $0.265 $0.200 $0.228
- ------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------
6/30/95 $12.10 $12.84 $12.00 $12.09 $12.53
- ------------------------------------------------------------------------
12/31/95 13.12 13.92 13.03 13.12 13.60
- ------------------------------------------------------------------------
Past performance is not indicative of future results.
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
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 maximum 5.75% 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 shares and assumes redemption at the end of
the period. Your fund's CDSC declines from a 5% maximum during the first
year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies.
COMPARATIVE BENCHMARKS
The Europe, Australia and the Far East (EAFE) component of the Morgan
Stanley Capital International World Index (MSCI) is an unmanaged list of
international equity securities, excluding U.S., with all values
expressed in U.S. dollars. Performance figures reflect changes in market
prices and reinvestment of distributions net of withholding taxes.
Standard & Poor's 500 Index is an unmanaged list of common stocks that
is frequently used as a general measure of stock market performance.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Both the indexes assume reinvestment of all distributions and do not
take into account brokerage commissions or other costs. The fund's
portfolio contains securities that do not match those in the indexes.
<TABLE>
<CAPTION>
Portfolio of investments owned
December 31, 1995 (Unaudited)
COMMON STOCKS (88.7%)*
NUMBER OF SHARES VALUE
<S> <C> <C>
Australia (2.3%)
- --------------------------------------------------------------------------------------
86,400 Amcor Ltd. $ 609,444
100,000 National Australia Bank Ltd. 898,425
190,000 QBE Insurance Group Ltd. 877,487
------------
2,385,356
Austria (1.7%)
- --------------------------------------------------------------------------------------
6,360 Austria Mikro Systeme International 1,029,055
17,500 Mayr-Melnhof Karton AG 144A ADS 218,750
1,500 Mayr-Melnhof Karton AG 74,963
3,500 VA Technolgies AG 443,345
------------
1,766,113
Belgium (0.5%)
- --------------------------------------------------------------------------------------
270 N.V. Bekaert S.A. 221,851
600 Solvay S.A. 323,247
------------
545,098
Canada (0.5%)
- --------------------------------------------------------------------------------------
12,400 Magna International, Inc. Class A 536,300
Denmark (2.8%)
- --------------------------------------------------------------------------------------
21,000 Danisco A/S 1,010,976
30,000 Scandinavian Mobility International + 716,736
42,000 Tele Danmark A/S ADS 1,160,250
------------
2,887,962
Finland (0.1%)
- --------------------------------------------------------------------------------------
8,000 Effjohn Oy Ab Class A + 24,405
6,500 Repola 122,256
------------
146,661
France (5.7%)
- --------------------------------------------------------------------------------------
4,380 Chargeurs S.A. 870,553
11,300 Credit Local de France S.A. 902,986
489 Docks de France S.A. 74,165
11,700 Lafarge Coppee (Bearer) 752,492
13,000 Michelin Corp. Class B (Registered) 517,562
2,900 Peugeot S.A. 381,898
17,000 Sgs-Thomson Microelectronic ADR + 684,250
3,700 Societe Generale Paris 456,325
11,100 Societe Nationale Elf Aquitaine (Bearer) 816,406
1,350 Sommer-Allibert 356,936
620 Zodiac S.A. 96,561
------------
5,910,134
Germany (4.5%)
- --------------------------------------------------------------------------------------
45,000 Adidas AG 144A ADS + 1,198,125
240 Munich Re (Registered) + 520,832
1,040 Preussag AG 290,074
12,500 SGL Carbon AG + 965,083
33,000 Tarkett AG + 711,553
23,300 VEBA AG 986,972
------------
4,672,639
Hong Kong (4.9%)
- --------------------------------------------------------------------------------------
496,000 Amoy Properties Ltd. + 493,947
150,000 Cheung Kong Holdings Ltd. 913,735
51,600 Guoco Group Ltd. 248,924
80,625 HSBC Holdings PLC 1,220,011
180,000 Hong Kong Electric Holdings Ltd. 590,145
120,000 Hutchison Whampoa, Ltd. 730,988
70,000 Swire Pacific Ltd. Class A 543,197
180,000 Varitronix International Ltd. 334,066
------------
5,075,013
Ireland (2.9%)
- --------------------------------------------------------------------------------------
163,588 Allied Irish Banks PLC 883,302
35,380 Bank of Ireland 254,903
134,000 CRH PLC 1,001,824
101,900 Greencore Group PLC 874,157
------------
3,014,186
Italy (3.1%)
- --------------------------------------------------------------------------------------
150,000 Bulgari S.P.A. + 1,265,596
18,150 Danieli & Co. 114,367
91,200 Danieli & Co. (Savings Shares) 247,108
37,000 Gucci Group + 1,438,375
18,300 Sitri S.P.A. 102,858
------------
3,168,304
Japan (25.7%)
- --------------------------------------------------------------------------------------
40,000 Bridgestone Corp. 634,736
57,000 Dai Nippon Printing Co., Ltd. 965,167
7,000 Daikin Industries Ltd. 68,408
88,000 Daiwa Securities Co. Ltd. 1,345,332
87,000 Fujitsu Ltd. 968,070
10,000 Futaba Corp. 457,668
25,000 Glory Ltd.(Glory Kogyo) 919,207
12,300 Hirose Electric Co. Ltd. 706,938
20,000 Ito-Yokado Co., Ltd. 1,230,769
68,000 KAO Corp. + 842,187
15,000 Komori Corp., Ltd. 377,359
30,000 Kurita Water Industries Ltd. 798,258
8,000 Kyocera Corp. 593,711
7,000 Mabuchi Motor 434,833
49,000 Maeda Corp. 478,858
57,000 Marui Co., Ltd. 1,185,777
40,000 Mitsubishi Bank Ltd. 940,494
52,000 Mitsubishi Motors Corp. 423,145
112,000 Mitsui Fudoscan Co. Ltd. 981,829
27,000 Murata Manufacturing Co. Ltd. 992,743
70,000 Nichicon 1,029,512
63 Nippon Telegraph and Telephone Corp. 508,999
25,000 Nippondenso Co., Ltd. 466,860
79,000 Nisshin Steel Co., Ltd. 318,752
44,000 Omron Tateisi Electronics Corp. 1,013,256
17,000 Rohm Co. Ltd. 958,974
36,000 Santen Pharmaceutical Co., Ltd. 815,094
60,000 Sekisui Chemical Co., Ltd. 882,438
65,000 Sharp Corp. 1,037,736
80,000 Tokio Marine & Fire Insurance Co. Ltd. (The) 1,044,993
133,000 Toray Industries, Inc. 875,085
28,000 Tostem Corp. 929,270
39,000 Yamanouchi Pharmaceutical Co. Ltd. 837,736
40,000 Yamato Transport Co. Ltd. 476,052
------------
26,540,246
Malaysia (1.1%)
- --------------------------------------------------------------------------------------
44,000 Genting Berhad 367,461
70,000 Leader Universal 159,937
42,000 Malayan Banking Berhad 354,067
60,000 Sungei Way Holdings 216,269
------------
1,097,734
Netherlands (5.3%)
- --------------------------------------------------------------------------------------
15,040 ABN AMRO Holding N.V. 684,147
18,835 Aegon N.V. 832,162
6,500 Akzo-Nobel N.V. 750,716
2,900 DSM N.V. 238,208
15,149 Getronics Electric N.V. 707,016
13,400 IHC Caland N.V. 450,280
14,980 K.L.M.-Royal Dutch Airlines 525,745
7,000 Koninklijke PPT Nederland N.V. 253,951
7,400 Unilever N.V. 1,038,395
------------
5,480,620
Portugal (0.1%)
- --------------------------------------------------------------------------------------
400 Banco Comercial Portugues, S.A. (Registered) 5,434
2,295 Banco Totta & Accores S.A. 37,903
------------
43,337
Singapore (4.7%)
- --------------------------------------------------------------------------------------
90,000 City Developments Ltd. 655,680
58,000 Cycle & Carriage Ltd. 578,441
80,000 Development Bank of Singapore Ltd. (Registered) 995,898
42,800 Jardine Matheson Holdings Ltd. 293,180
51,000 Singapore Airlines Ltd. (Registered) 476,164
30,600 Singapore Press Holdings (Registered) 541,095
104,100 United Overseas Bank Ltd. (Registered) 1,001,386
90,000 Venture Manufacturing Ltd. 301,740
------------
4,843,584
Spain (5.4%)
- --------------------------------------------------------------------------------------
6,880 Argentaria Corp. (Registered) 282,848
30,000 Banco de Bilbao Vizcaya S. A. (Registered) 1,077,947
147,600 Iberdola S.A. 1,347,114
1,700 Immobiliaria Metropolitana Vasco Central 55,912
11,500 Mapfre Vida Seguros 680,809
19,600 Repsol S.A. 640,602
17,000 Repsol S.A. ADR 558,875
24,000 Tabacalera S.A. Ser. A 907,745
------------
5,551,852
Sweden (2.9%)
- --------------------------------------------------------------------------------------
22,100 Astra AB 881,711
4,600 Autoliv AB 268,706
30,000 Foreningsbanken AB + 84,912
50,000 IRO AB + 564,572
46,300 Svenska Cellulosa AB 717,970
12,900 Pharmacia & Upjohn, Inc. 508,837
------------
3,026,708
Switzerland (5.1%
- --------------------------------------------------------------------------------------
560 BBC Brown Boveri & Cie AG, Ltd. (Bearer) 650,542
185 Baer Holdings AG 206,090
1,220 Ciba-Geigy AG (Registered) 1,073,515
500 Nestle S.A. (Registered) 553,099
2,675 Rieter Holding AG (Registered) 772,237
450 SGS 'Societe Generale de Surveillance Holdings S.A. 893,368
300 Swiss Reinsurance Co. (Registered) 349,025
660 Union Bank of Switzerland (Bearer) 715,215
------------
5,213,091
Taiwan (0.2%)
- --------------------------------------------------------------------------------------
23,146 Yageo Corp. 144A GDR + 208,314
United Kingdom (9.2%)
- --------------------------------------------------------------------------------------
45,000 Anglian Water PLC 421,988
113,172 Argyll Group PLC 596,416
107,249 BAT Industries PLC 943,389
33,268 Barclays Bank PLC 381,068
61,601 Burmah Oil PLC 891,800
120,000 General Electric Co. (The) PLC 660,300
50,200 Guinness PLC 368,819
66,000 Molins PLC 789,756
62,148 North West Water Group PLC 593,389
25,000 Pearson PLC 241,800
36,655 Royal Insurance Holdings PLC 217,034
3,600 Scottish Power PLC 20,646
350,000 Sears PLC 564,200
13,600 Securicor Group PLC Class A 186,558
17,500 Security Services PLC 240,870
45,000 Shell Transportation & Trading Co. PLC 594,270
45,000 Siebe PLC 553,815
45,581 Tate & Lyle PLC 333,471
200,200 Vodafone Group PLC 715,265
75,652 Weir Group PLC (The) 249,765
------------
9,564,619
------------
Total Common Stocks (cost $82,896,564) $ 91,677,871
PREFERRED STOCKS (0.3%)*(cost $210,471)
NUMBER OF SHARES VALUE
France (0.35%)
- --------------------------------------------------------------------------------------
2,200 Essilor International ADP FF 12.3 pfd. $ 306,758
------------
CONVERTIBLE BONDS AND NOTES (0.2%)*
PRINCIPAL AMOUNT VALUE
Denmark (0.2%)
- --------------------------------------------------------------------------------------
$1,200,000 Danisco cv. bonds 5s, 2004 $ 231,727
Finland (-%)
- --------------------------------------------------------------------------------------
350,000 Effjohn Oy - AB cv. bonds, 7s, 2004 36,929
------------
Total Convertible Bonds and Notes (cost $244,415) $ 268,656
WARRANTS (-%)*+ EXPIRATION
NUMBER OF WARRANTS DATE VALUE
Italy (-%)
- --------------------------------------------------------------------------------------
6,237 Danieli & Co. 11/30/99 $ 3,148
Switzerland (-%)
- --------------------------------------------------------------------------------------
1,175 Reiter Holding 3/13/96 2,954
------------
Total Warrants (cost $-) $ 6,102
Short-Term Investments (10.3%)* (cost $10,607,213)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------
$10,602,000 Interest in $308,242,000 joint repurchase agreement
dated December 29, 1995 with Lehman Brothers, Inc.
due January 2, 1996 with respect to various U.S. Treasury
obligations--maturity value of $ 10,608,950 for an
effective yield of 5.9%. $ 10,607,213
- --------------------------------------------------------------------------------------
Total Investments (cost $93,958,663)*** $102,866,600
- --------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $103,411,957
+ Non-income-producing security.
*** The aggregate identified cost on a tax basis is $93,970,114,
resulting in gross unrealized appreciation and depreciation of
$11,255,114, and $2,358,628, respectively, or net unrealized
appreciation of $8,896,486.
ADR, ADS or GDR after the name of a foreign holding stands for American
Depository Receipt, American Depository Shares or Global Depository Receipts,
respectively, representing ownership of foreign securities on deposit with
a domestic custodian bank.
144A after the name of a security represents those exempt from registration
under Rule 144A of the Securities Act of 1933. These securities may be
resold in transactions exempt from registration, normally to qualified
institutional buyers.
</TABLE>
<TABLE>
<CAPTION>
Forward Currency Contracts to Sell Outstanding at December 31, 1995
(Aggregate face value $26,213,153)
Unrealized
Market Aggregate Delivery Appreciation/
Value Face Value Date (Depreciation)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
British Pounds $ 5,282,197 $ 5,274,324 5/31/96 $ (7,873)
French Francs 3,200,550 3,193,397 5/31/96 (7,153)
Japanese Yen 13,529,447 14,611,188 2/20/96 1,081,741
Netherland Guilders 3,124,708 3,134,244 5/31/96 9,536
- -------------------------------------------------------------------------------------
$1,076,251
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
December 31,1995 (Unaudited)
Assets
- --------------------------------------------------------------------------------------------------------
<S> <C>
Investments in securities, at value
(identified cost $ 93,958,663 (Note 1) $102,866,600
- --------------------------------------------------------------------------------------------------------
Cash 393
- --------------------------------------------------------------------------------------------------------
Dividends, interest and other receivables 94,166
- --------------------------------------------------------------------------------------------------------
Foreign tax reclaim 56,111
- --------------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,437,522
- --------------------------------------------------------------------------------------------------------
Receivable for securities sold 94,498
- --------------------------------------------------------------------------------------------------------
Receivable for open forward currency contracts 1,091,277
- --------------------------------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 404
- --------------------------------------------------------------------------------------------------------
Total assets 105,640,971
Liabilities
- --------------------------------------------------------------------------------------------------------
Distributions payable to shareholders 1,566
- --------------------------------------------------------------------------------------------------------
Payable for securities purchased 1,708,156
- --------------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 112,508
- --------------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 175,655
- --------------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 45
- --------------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,138
- --------------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 66,647
- --------------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 107,108
- --------------------------------------------------------------------------------------------------------
Payable for open forward currency contracts 15,026
- --------------------------------------------------------------------------------------------------------
Other accrued expenses 41,165
- --------------------------------------------------------------------------------------------------------
Total liabilities 2,229,014
- --------------------------------------------------------------------------------------------------------
Net assets $103,411,957
Represented by
- --------------------------------------------------------------------------------------------------------
Paid in capital (Note 4) $ 95,634,291
- --------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (2,026,619)
- --------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (180,416)
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and assets and liabilities
in foreign currencies 9,984,701
- --------------------------------------------------------------------------------------------------------
Total - Representing net assets applicable to
capital shares outstanding $103,411,957
Computation of net asset value and offering price
- --------------------------------------------------------------------------------------------------------
Net asset value and redemption price of class A shares
($58,078,079 divided by 4,427,992 shares) $13.12
- --------------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $13.12)* $13.92
- --------------------------------------------------------------------------------------------------------
Net asset value and offering price of class B shares
($41,356,100 divided by 3,175,089 shares)** $13.03
- --------------------------------------------------------------------------------------------------------
Net asset value and redemption price of class M shares
($3,977,778 divided by 303,225 shares) $13.12
- --------------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $13.12)* $13.60
- --------------------------------------------------------------------------------------------------------
* 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, 1995 (Unaudited)
<S>
Investment Income <C>
- --------------------------------------------------------------------------------------------------------
Interest $ 209,702
- --------------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $60,498) 376,928
- --------------------------------------------------------------------------------------------------------
Total investment income 586,630
Expenses:
- --------------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 317,736
- --------------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 228,904
- --------------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 2,409
- --------------------------------------------------------------------------------------------------------
Reports to shareholders 18,209
- --------------------------------------------------------------------------------------------------------
Auditing 14,295
- --------------------------------------------------------------------------------------------------------
Legal 1,944
- --------------------------------------------------------------------------------------------------------
Postage 7,972
- --------------------------------------------------------------------------------------------------------
Registration fees 13,610
- --------------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 55,067
- --------------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 165,761
- --------------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 7,745
- --------------------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 1,468
- --------------------------------------------------------------------------------------------------------
Administrative services (Note 2) 2,250
- --------------------------------------------------------------------------------------------------------
Other expenses 3,240
- --------------------------------------------------------------------------------------------------------
Total expenses 840,610
- --------------------------------------------------------------------------------------------------------
Expense reduction (21,093)
- --------------------------------------------------------------------------------------------------------
Net expenses 819,517
- --------------------------------------------------------------------------------------------------------
Net investment loss (232,887)
- --------------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 183,314
- --------------------------------------------------------------------------------------------------------
Net realized gain on forward currency contracts and
foreign currency translation (Notes 1 and 3) 250,266
- --------------------------------------------------------------------------------------------------------
Net unrealized gain on forward currency contracts and
foreign currency translation during the period 2,354,613
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments during the period 5,195,821
- --------------------------------------------------------------------------------------------------------
Net gain on investments 7,984,014
- --------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $7,751,127
- --------------------------------------------------------------------------------------------------------
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
1995* 1994
- ----------------------------------------------------------------------------------------------------
Increase in net assets
- ----------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income (loss) $ (232,887) $ 252,913
- ----------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and options 433,580 (738,996)
- ----------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and options 7,550,434 1,745,082
- ----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 7,751,127 1,258,999
- ----------------------------------------------------------------------------------------------------
Distributions to shareholders
- ----------------------------------------------------------------------------------------------------
From net investment income:
Class A (1,053,305) -
- ----------------------------------------------------------------------------------------------------
Class B (570,821) -
- ----------------------------------------------------------------------------------------------------
Class M (60,674) -
- ----------------------------------------------------------------------------------------------------
From net realized gain on investments:
Class A (20,256) (199,229)
- ----------------------------------------------------------------------------------------------------
Class B (14,637) (141,301)
- ----------------------------------------------------------------------------------------------------
Class M (1,360) (460)
- ----------------------------------------------------------------------------------------------------
In excesss of net realized gain on investments:
Class A - (117,199)
- ----------------------------------------------------------------------------------------------------
Class B - (83,122)
- ----------------------------------------------------------------------------------------------------
Class M - (271)
- ----------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 36,856 ,455 48,556,735
- ----------------------------------------------------------------------------------------------------
Total increase in net assets 42,886,529 49,274,152
- ----------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------
Beginning of period 60,525,428 11,251,276
- ----------------------------------------------------------------------------------------------------
End of period (including distributions in excess of
net investment income and accumulated net investment
loss of $2,026,619 and $108,932, respectively) $103,411,957 $60,525,428
- ----------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
For the period
December 1, 1994
Six months (commencement Six months
ended of operations) ended
December 31 to June 30 December 31
- ------------------------------------------------------------------------------------------
1995* 1995 1995*
- ------------------------------------------------------------------------------------------
Class M
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $12.09 $11.87 $12.00
- ------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------
Net investment income(loss) - .03(a) (.02)
- ------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss)
on investments 1.26 .36 1.26
- ------------------------------------------------------------------------------------------
Total from investment operations 1.26 .39 1.24
- ------------------------------------------------------------------------------------------
Less distributions from:
- ------------------------------------------------------------------------------------------
Net investment income (.22) - (.20)
- ------------------------------------------------------------------------------------------
Net realized gain on investments (.01) (.11) (.01)
- ------------------------------------------------------------------------------------------
In excess of net realized
gain on investments - (.06) -
- ------------------------------------------------------------------------------------------
Total distributions (.23) (.17) (.21)
- ------------------------------------------------------------------------------------------
Net asset value, end of period $13.12 $12.09 $13.03
- ------------------------------------------------------------------------------------------
Total investment return at
net asset value(%)(c) 10.45(d) 3.33(d) 10.29(d)
- ------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $3,978 $1,777 $41,356
- ------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets(%)(e) 1.05(d) 1.61(a)(d) 1.29(d)
- ------------------------------------------------------------------------------------------
Ratio of net investment income(loss) to
average net assets(%) (.30)(d) .58(a)(d) (.51)(d)
- ------------------------------------------------------------------------------------------
Portfolio turnover(%) 28.89(d) 25.83(d) 28.89(d)
- ------------------------------------------------------------------------------------------
Financial highlights (Continued)
(For a share outstanding throughout the period)
<CAPTION>
For the period
June 1, 1994
Year (commencement Six Months
ended of operations) ended
June 30 to June 30 December 31
- ---------------------------------------------------------------------------------------------------------------------
1995 1994 1995* 1995
- ---------------------------------------------------------------------------------------------------------------------
Class B
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.82 $11.78 $12.10 $11.83
- ---------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------
Net investment income(loss) .01(a) (.01)(a)(b) .01 .08
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss)
on investments .34 .05 1.28 .36
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .35 .04 1.29 .44
- ---------------------------------------------------------------------------------------------------------------------
Less distributions from:
- ---------------------------------------------------------------------------------------------------------------------
Net investment income - - (.26) -
- ---------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (.11) - (.01) (.11)
- ---------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments (.06) - - (.06)
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.17) - (.27) (.17)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.00 $11.82 $13.12 $12.10
- ---------------------------------------------------------------------------------------------------------------------
Total investment return at
net asset value(%)(c) 3.00 .34(d) 10.67(d) 3.76
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $25,892 $2,470 $58,078 $32,856
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets(%)(e) 2.41(a) .15(a)(b)(d) .90(d) 1.61(a)
- ---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income(loss) to
average net assets(%) .23(a) (.06)(a)(b)(d) (.13)(d) .97(a)
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover(%) 25.83 96.13(d) 28.89(d) 25.83
- ---------------------------------------------------------------------------------------------------------------------
Financial highlights (Continued)
(For a share outstanding throughout the period)
<CAPTION>
February 28, 1991
(commencement
of operations)
Year ended June 30 to June 30
- ----------------------------------------------------------------------------------
1994 1993 1992 1991
- ----------------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $9.58 $8.82 $8.18 $8.63
- ----------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------
Net investment income(loss) (.06)(a) .07(a) .06 .07(a)
- ----------------------------------------------------------------------------------
Net realized and unrealized gain
(loss)
on investments 2.53 .69 .71 (.52)
- ----------------------------------------------------------------------------------
Total from investment operations 2.47 .76 .77 (.45)
- ----------------------------------------------------------------------------------
Less distributions from:
- ----------------------------------------------------------------------------------
Net investment income - - (.13) -
- ----------------------------------------------------------------------------------
Net realized gain on investments (.22) - - -
- ----------------------------------------------------------------------------------
In excess of net realized
gain on investments - - - -
- ----------------------------------------------------------------------------------
Total distributions (.22) - (.13) -
- ----------------------------------------------------------------------------------
Net asset value, end of period $11.83 $9.58 $8.82 $8.18
- ----------------------------------------------------------------------------------
Total investment return at
net asset value(%)(c) 25.81 8.62 9.52 (5.21)(d)
- ----------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $8,781 $2,859 $2,502 $2,054
- ----------------------------------------------------------------------------------
Ratio of expenses to average
net assets(%)(e) 2.17(a) 1.80(a) 1.98 .78(a)(d)
- ----------------------------------------------------------------------------------
Ratio of net investment income(loss) to
average net assets(%) (.17)(a) .81(a) .76 .86(a)(d)
- ----------------------------------------------------------------------------------
Portfolio turnover(%) 96.13 80.92 82.45 14.54(d)
- ----------------------------------------------------------------------------------
* Unaudited
(a) Reflects an expense limitation which expired December 31, 1994. As a
result of such limitation, expenses for class A shares of the fund for
the periods ended June 30, 1994, June 30, 1993 and June 30, 1991 reflect
per share reductions of approximately $0.03, $0.05 and $0.10,
respectively. Expenses for class B shares of the fund for the period
ended June 30, 1994 reflect a reduction of less than $0.01 per share.
Expenses for Classes A, B, and M shares of the fund for the period ended
June 30, 1995 reflect a reduction of less than $0.01 per share.
(b) Per share net investment income for class B shares for the period
ended June 30, 1994 has been determined on the basis of the weighted
average number of shares outstanding for the period.
(c) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(d) Not annualized.
(e) The ratio of expenses to average net assets for the period ended
December 31, 1995 included amounts paid through expense offset
arangements. Prior period ratios exclude these amounts.
</TABLE>
Notes to financial statements
December 31, 1995 (Unaudited)
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The
fund seeks capital appreciation by investing primarily in equity
securities of companies located outside North America.
The fund offers class A, class B and class M shares. 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 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 M shares
are sold with a maximum front-end sales charge of 3.50% and pay an
ongoing distribution fee that is lower than class B shares and higher
than class A shares.
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 the 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 are in conformity
with generally accepted accounting principles and require management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements. 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 sale price on the principal market in which the
securities are traded, or, if no sales are reported - as in the case of
some securities traded over-the-counter - the last reported bid price,
except that certain U.S. government obligations are stated at the mean
between the last reported bid and asked prices. Short-term investments
having remaining maturities of 60 days or less are stated at amortized
cost, which approximates market value, and other investments are stated
at fair value following procedures approved by the Trustees.
B) 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. the order permits the fund's
cash balance to be deposited into a single joint account along with the
cash of other registered investment companies managed by Putnam
Investment Management, Inc. (Putnam Management), the fund's manager, a
wholly-owned subsidiary of Putnam Investments, Inc., and certain other
accounts. 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 least equal to 102% of the resale price, including accrued
interest. 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). Interest income is recorded on the accrual basis
and dividend income is recorded on the ex- dividend date, except that
certain dividends from foreign securities are recorded as soon as the
fund is informed of the ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, 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 fluctuations are included with the net realized
and unrealized gain or loss on investments. Net realized gains and
losses on foreign currency transactions represent net 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
gains and losses on foreign currency transactions 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.
F) Forward currency contracts The fund may engage in forward currency
contracts, which are agreements between two parties to buy and sell
currencies at a set price on a future date, to protect against a decline
in value relative to the U.S. dollar of the currencies in which its
portfolio securities are denominated or quoted (or an increase in the
value of a currency in which securities a fund intends to buy are
denominated, when a fund holds cash reserves and short-term
investments). The U.S. dollar value of forward currency contracts is
determined using forward currency exchange rates supplied by a quotation
service. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is "marked to market" daily and
the change in market value is recorded as an unrealized gain or loss..
When the contract is closed, the fund records a realized gain or loss
equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed. The maximum
potential loss from forward currency contracts is the aggregate face
value in U.S. dollars at the time the contract was opened. The fund
could be exposed to risk if the value of the currency changes
unfavorably, if the counterparties to the contracts are unable to meet
the terms of their contracts or if the fund is unable to enter into a
closing position.
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. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held and 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 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.
I) Unamortized organization expenses Expenses incurred by the fund in
connection with its organization, its registration with the Securities
and Exchange Commission and with various states and the initial public
offering of its shares were $14,123. These expenses are being amortized
on a straight-line basis over a five-year period. The fund will
reimburse Putnam Management for the payment of these expenses.
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 for the quarter. Such fee is based on the following annual
rates of of 0.80% of the first $500 million of average net assets, 0.70%
of the next $500 million, 0.65% of the next $500 million, and 0.60% of
any amount over $1.5 billion, subject, under current law, to reduction
in any year by the amount of certain brokerage commissions and fees
(less expenses) received by affiliates of the Manager on the fund's
portfolio transactions. Until December 31, 1994, the Manager had
voluntarily agreed to reduce its compensation to the extent that
expenses of the fund exceeded 1.90% of average net assets. The fund's
expenses subject to this limitation were exclusive of brokerage,
interest, taxes, amortization of deferred organizational and
extraordinary expenses, and payments required under the fund's
Distribution Plan. This limitation was accomplished by a reduction of
the compensation payable to the Manager and, if necessary, payment of
additional fund expenses by the Manager. For the purpose of determining
any such reduction in Putnam Management compensation, expenses of the
fund do not reflect the applications of commissions or cash management
credits that may reduce designated fund expenses.
The fund reimburses the Manager 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.
Trustees of the fund receive an annual Trustees fee of $350 and an
additional fee for each Trustee's meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of
the Trustees receive additional fees for attendance at certain committee
meetings.
During the six months ended December 31, 1995, the fund adopted a
Trustee Fee Deferral Plan (the "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 in the fund and are
invested in the fund or in other Putnam funds until distribution in
accordance with the Plan.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly owned 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, 1995, fund expenses were reduced
by $21,093 under expense offset arrangements with PFTC. Investor
servicng and custodian fees reported in the Statement of operations
exclude these credits. The fund could have invested the assets utilized
in connection with the expense offset arrangements in an income
producing asset if it had not entered into such arrangements.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B 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 .25%,
1.00% and 1.00% of the average net assets attributable to class A, class
B and class M shares, respectively. The Trustees have approved payment
by the fund at an annual rate of .25%, 1.00% and .75% of the average net
assets attributable to class A, class B and class M shares,
respectively.
For the six months ended December 31, 1995, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $46,304 and $2,872
from the sale of class A and class M shares, respectively and received
$19,819 in contingent deferred sales charges from redemptions of class B
shares. A deferred sales charge of up to 1% is assessed on certain
redemptions of class A shares. For the six months ended December 31,
1995, Putnam Mutual Funds Corp., acting as underwriter received $621 on
class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended December 31, 1995, purchases and sales of
investment securities other than short-term investments aggregated
$40,230,843 and $8,328,001, respectively. There were no purchases or
sales of U.S. government obligations during the period. In determining
the net gain or loss on securities sold, the cost of securities has been
determined on the identified cost basis.
Note 4
Capital shares
At December 31, 1995, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Six months ended
December 31, 1995
Class A Shares Amount
- ------------------------------------------
Shares sold 2,412,688 $30,905,424
- ------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 80,150 1,026,754
- ------------------------------------------
2,492,838 31,932,178
Shares
repurchased (779,361) (9,989,150)
- ------------------------------------------
Net increase 1,713,477 $21,943,028
- ------------------------------------------
Year ended June 30, 1995
Class A Shares Amount
- ------------------------------------------
Shares sold 3,343,986 $39,677,281
- ------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 27,348 317,828
- ------------------------------------------
3,371,334 39,995,109
Shares
repurchased (1,399,240) (16,448,723)
- ------------------------------------------
Net increase 1,972,074 $23,546,386
- ------------------------------------------
Six months ended
December 31, 1995
Class B Shares Amount
- ------------------------------------------
Shares sold 2,642,270 $33,574,689
- ------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 41,891 533,249
- ------------------------------------------
2,684,161 34,107,938
Shares
repurchased (1,666,552) (21,190,419)
- ------------------------------------------
Net increase 1,017,609 $12,917,519
- ------------------------------------------
Year ended June 30, 1995
Class B Shares Amount
- ------------------------------------------
Shares sold 2,667,962 $31,655,329
- ------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 18,223 210,475
- ------------------------------------------
2,686,185 31,865,804
Shares
repurchased (737,746) (8,555,102)
- ------------------------------------------
Net increase 1,948,439 $23,310,702
- ------------------------------------------
Six months ended
December 31, 1995
Class M Shares Amount
- ------------------------------------------
Shares sold 183,910 $2,349,224
- ------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,659 59,679
- ------------------------------------------
188,569 2,408,903
Shares
repurchased (32,367) (412,995)
- ------------------------------------------
Net increase 156,202 $1,995,908
- ------------------------------------------
For the period
December 1, 1994
(commencement of
operations) to
June 30, 1995
Class M Shares Amount
- ------------------------------------------
Shares sold 153,859 $1,779,068
- ------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 63 731
- ------------------------------------------
153,922 1,779,799
Shares
repurchased (6,899) (80,152)
- ------------------------------------------
Net increase 147,023 $1,699,647
- ------------------------------------------
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
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
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
Anthony W. Regan
Vice President
Justin M. Scott
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Overseas
Growth 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.
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
principal amount invested.
The Putnam Funds
One Post Office Square
Boston Massachusetts, 02109
22802-841/524/891 1/96
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
