(logo)
Putnam
Asia Pacific
Growth Fund
Semiannual Report
March 31, 1994
(artwork)
For investors seeking
capital appreciation
primarily through
common stocks of
companies located in
Asia and in the Pacific
Basin
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
6 Portfolio of investments owned
9 Financial statements
18 Fund performance supplement
19 Your Trustees
A member
of the Putnam
Family of Funds
<PAGE>
How your
fund performed
For periods ended March 31, 1994
Total return* MSCI
Class A Class B S&P Pacific
NAV POP NAV CDSC 500(r) Index
6 months 18.55% 11.78% 18.22% 13.22 -1.53% 1.56%
1 year 46.29 37.89 -- -- 1.48 25.10
3 years 64.58 55.07 -- -- -29.74 21.68
annualized 18.07 15.75 -- -- 9.07 6.76
Life-of-class+
(class A shares)59.59 50.47 -- -- 33.61 15.06
annualized 16.22 14.04 -- -- 9.76 4.65
(class B shares) -- -- 25.63 20.63 1.81 4.85
Share data Class A Class B
NAV POP NAV
September 30, 1993 $11.55 $12.25 $11.54
March 31, 1994 $13.65 $14.48 $13.60
Distributions
6 months ended Capital gains
March 31, 1994 Number Short-term Long-term Total
Class A 1 $0.021 $0.021 $0.042
Class B 1 $0.021 $0.021 $0.042
* Performance data represent past results. Investment return and
principal value will fluctuate so an investor's shares, when
sold, may be worth more or less than their original cost.
+ The fund began investment operations on February 20, 1991,
offering shares now known as class A shares. Effective June 1,
1993, the fund began offering class B shares. Performance for
each share class will differ.
<PAGE>
Terms you need to know
Total return is the change in value of an investment from the
beginning to the end of a period, assuming the reinvestment of
all distributions. It may be shown at net asset value or at
public offering price.
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not reflecting any 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.
Contingent deferred sales charge (CDSC) is a charge applied at
the time of the redemption of shares rather than the time of
purchase. It generally declines and eventually disappears over a
stated period.
Class A shares are the shares of your fund offered subject to an
initial sales charge. Your fund's POP includes the maximum 5.75%
sales charge.
Class B shares are the shares of your fund offered with no
initial sales charge. Within the first six years of purchase,
they are subject to a CDSC declining from 5% to 1%. After the
sixth year, the CDSC no longer applies.
Please see the fund performance supplement on page 18 for
additional information about performance comparisons.
<PAGE>
From the Chairman
(photograph of George Putnam)
(c) Karsh, Ottawa
George Putnam
Chairman
of the Trustees
Dear Shareholder:
Calendar year 1993 will be remembered not only as a spectacular
year for international investing in general, but also as the year
when investing in one of the world's fastest-growing regions --
the Pacific Rim -- truly came into its own. As evidenced by the
double-digit returns, Putnam Asia Pacific Growth Fund did its
part in providing you with strong performance for the six months
ended March 31, 1994.
In the following report from Putnam Management, Fund Manager
David Thomas explains in detail the diverse forces that affected
Pacific Rim stock markets during the first half of fiscal 1994.
In short, the first three months were characterized by rapid
growth, accelerating stock prices, and high demand, while the
second three were marked by heavy bouts of profit-taking in the
smaller markets as nervous investors reacted to interest rate
changes in the U.S.
Through these ups and downs, David exercised good judgment in
portfolio construction, maintaining an eye toward the big
picture. Early on, he foresaw a developing opportunity for
potential recovery in Japan and shifted a larger portion of the
fund's assets into that region. This move proved both timely and
effective, cushioning the fund against the full impact of the
downturn when the smaller Southeast Asian markets corrected in
February and March.
Going forward, I am confident that David's 24 years of investment
experience will serve him well in the months ahead as the smaller
markets try to regain their footing and Japan's seven-party
coalition attempts to retain cohesiveness in the wake of Prime
Minister Hosokawa's recent resignation. When investing in the
Pacific Rim, it's important to remember that pockets of
turbulence are rarely entirely unexpected and are frequently
offset by opportunities. The compensation for taking on such risk
is the potential for above-average reward -- the likes of which
we've witnessed this past year.
Respectfully yours,
George Putnam
May 18, 1994
<PAGE>
Report from
Putnam Management
Top 10 holdings (as a percentage of net assets as of 3/31/94)*
Daiwa Securities Ltd.
Matsushita Electric Ind. Ltd.
Fujitsu Ltd.
Omron Corp.
Sony Corp.
East Japan Railway Co.
Nippon Telegraph and Telephone Corp.
Sangetsu Co., Ltd.
Murata Manufacturing Co. Ltd.
Suzuki Motor Corp.
* Portfolio holdings and country allocations will vary in the
future. As of 3/31/94, the top 10 holdings represented 18.77% of
the portfolio.
The performance of Putnam Asia Pacific Growth Fund during the
first half of fiscal 1994 can be neatly divided into two quarters
- -- one up, one down. In the first quarter, the period between
October 1 and December 31, the fund experienced spectacular
returns from the smaller Southeast Asian markets. During the
second quarter, between January 1 and March 31, those very same
markets experienced intense profit-taking as the shock waves from
rising U.S. interest rates washed upon their shores.
Your fund's relative underweighting in Japan this past fall
allowed us to take full advantage of opportunities in the
Southeast Asian markets as they reached their peak. As new
investors poured their money into the fund, we began increasing
our holdings in Japan, anticipating opportunities on the horizon.
Ironically, during the winter, it was your fund's increased
weighting in this country that helped buoy the value of fund
assets and, during the January and February slides in the smaller
markets, helped it experience less volatility than its
competitors. In fact, Lipper Analytical Services, an industry
research firm, ranked your fund's class A shares in the top 11%
of its category for 1- and 2-year performance, and in the top 27%
for its 3-year record as of March 31, 1994.+
All in all, through diligent research and hands-on, experienced
management, we were able to produce double-digit returns over the
period, for both class A and class B shares. This was
substantially ahead of the MSCI Pacific Index's 1.56% gain and
the U.S. market's -1.53% return, as represented by the S&P
500(R). For a complete performance summary, please see the table
on page 2.
Market perspective Until most recently, the performance of the
smaller Southeast Asian markets had been fueled by the massive
liquidity stemming from record low interest rates around the
world. Overseas investors, from the U.S., U.K., Hong Kong, and
even Japan, charged into the region, boosting demand -- and
consequently, stock prices. The returns in Hong Kong, Malaysia,
and Indonesia were exceptional by any standards. Stock exchanges
in these countries saw impressive, if not phenomenal, growth in
trading volume -- 81% in Hong Kong, 459% in Malaysia, and 125% in
Indonesia during 1993. Your fund itself experienced increased
demand, growing from $112 million in assets at calendar 1993
year-end to $168 million as of March 31, 1994. Meanwhile, the
share price has appreciated by more than $2 since the beginning
of the fiscal period.
Meanwhile Japan languished in its fourth consecutive year of
economic doldrums. In October, industrial production fell to its
lowest point since the 1930s, and unemployment rose in November
to its highest level since 1986. Low consumer confidence and
spending, recurrent governmental crises, the threat of deflation,
and the trade friction with the U.S. administration added to the
country's woes.
Australia, lacking the inherent growth characteristics of her
smaller neighbors, was dwarfed, not surprisingly, by the
extraordinary returns of the other markets. However, natural
resources stocks are showing signs of recovery while a weak
economic expansion has seemingly begun. In China, runaway
economic growth and accelerating inflation remain causes for
concern.
A timely shift in focus Such was the regional scenario as we
entered the second quarter of your fund's fiscal year. However,
as too much money began chasing too few stocks, the smaller
markets turned speculative despite an excellent outlook for
corporate earnings. With valuations reaching exceedingly high
levels, the time seemed ripe for profit-taking.
Accordingly, we began selling our stake in certain companies.
Impressive gains were realized on the sale of such holdings as
New World Development Co., Oriental Press Group, and Champion
Technology in Hong Kong. We also took profits on Benpress in the
Philippines, Bangkok Bank in Thailand, and United Overseas Bank
in Singapore.
There are signs that the Japanese economy is at last bottoming
out. We anticipate that corporate profits will begin recovering
strongly at some point this year. The very real possibility of
this has encouraged us to increase the fund's weighting in Japan
and we anticipate that other investors will do likewise. We chose
to focus particularly on industrial recovery stocks such as
Tsubakimoto Chain Co., which has been a strong performer. The
impotence of the current coalition government, even with a new
prime minister is, however, dampening the enthusiasm of the local
Japanese investor.
<PAGE>
Outlook Despite the 25% declines recently experienced by the
smaller Southeast Asian markets, their economic fundamentals and
corporate earnings outlooks remain attractive. While we may have
taken profits in some areas, our outlook for the region as a
whole remains favorable, and we look for continued growth over
the long term.
With the resignation of Prime Minister Hosokawa in Japan, and the
uncertainty regarding the cohesiveness of the ruling seven-party
coalition, we expect the Japanese market to experience occasional
volatility. However, as evidenced by your fund's outstanding
performance, owning stocks in different countries can help offset
downturns in any one market. Going forward, it's important to
remember that the keys to successful investing are
diversification and a long-term investment horizon.
+ Lipper rankings vary over time and do not include the effects
of sales charges. Lipper's category of Pacific region funds
included 15 funds 3 years ago, 18 funds 2 years ago, and 27 funds
1 year ago.
The views expressed throughout the report are exclusively those
of Putnam Management. They are not meant as investment advice.
Although the described holdings are viewed favorably as of March
31, 1994, there is no guarantee the fund will continue to hold
these securities in the future.
<PAGE>
Portfolio of investments owned
March 31, 1994 (Unaudited)
Common Stocks (86.7%)(a)(b)
Number of Shares Value
Japan (51.3%)
29,000 Aoyama Trading $1,645,451
130,000 Best Denki Co. Ltd. 2,163,499
246 Chain Store Okuwa Co., Ltd. 5,243
250,000 Daiwa Securities Ltd. 3,990,274
15,000 Denny's Japan Co. Ltd. 642,336
6,500 East Japan Railway Co. 3,068,127
105,000 Eidensha Co. Ltd. 1,839,422
330,000 Fujitsu Ltd. 3,275,910
50,000 Futaba Corp. 2,043,795
31,000 Hirose Electric Co. Ltd. 1,807,201
141,000 Kamigumi Co. Ltd. 1,729,055
200,000 Kurimoto, Ltd. 2,374,700
100,000 Kurita Water Industries Ltd. 2,491,480
230,000 Maeda Corp. 2,484,667
160,000 Marui Co., Ltd. 2,382,480
120,000 Maruichi Steel Tube Ltd. 2,148,900
210,000 Matsushita Electric Ind. Ltd. 3,474,450
260,000 Mitsubishi Cable Ind. Ltd. 2,277,366
210,000 Mitsubishi Motors Corp. 1,755,621
180,000 Mitsui Fudosan Co., Ltd. 2,032,110
58,000 Murata Manufacturing Co. Ltd. 2,737,716
53,000 Nichiei Construction Co. Ltd. 876,885
101,200 Nippon Denwa Shisetsu Co., Ltd. 1,625,110
3,300 Nippon Telegraph and Telephone Corp. 2,912,993
200,000 Omron Corp. 3,270,079
37,500 Promise Co. Ltd. 2,554,744
330,000 Rengo Co. Ltd. 2,566,146
75,000 Sangetsu Co., Ltd. 2,773,725
56,100 Santen Pharmaceutical Co., Ltd. 1,539,681
57,000 Sony Corp. 3,245,255
222,000 Suzuki Motor Corp. 2,700,741
210,000 Toho Bank Ltd. (The) 1,543,059
200,000 Tokio Marine & Fire Insurance Co. Ltd. 2,394,160
105,000 Tokyo Style Co. Ltd. 1,778,102
300,000 Toray Industries, Inc. 1,877,370
60,000 Tostem Corp. 2,072,994
110,000 Tsubakimoto Chain Co. 1,498,783
180,000 Wako Securities Co., Ltd. 1,839,420
140,000 Yamaguchi Bank, Ltd. (The) 2,452,562
85,891,612
Hong Kong (10.4%)
318,000 Cheung Kong Holdings Ltd. 1,625,616
450,000 Citic Pacific Ltd. 1,263,735
15,000 Dao Heng Bank Ltd. 46,008
350,000 Guoco Group Ltd. 1,551,375
120,783 HSBC Holdings PLC 1,359,920
1,040,000 Hon Kwok Land Investment Co. Ltd. 417,248
300,000 Hong Kong Land Holdings Ltd. 877,440
200 Hong Kong Telecommunications Ltd. 331
300,000 Hysan Development Co., Ltd. 958,980
150,000 Jardine Matheson Holdings Ltd. 1,009,455
1,000,000 Manhattan Card Co., Ltd. 333,300
432,262 New World Development Co. Ltd. 1,493,638
221,000 Sun Hung Kai Properties Ltd. 1,515,861
200,000 Swire Pacific Ltd. Class A 1,384,760
550,000 Tai Cheung Holdings 797,225
2,000,000 UDL Holdings Ltd. 310,600
800,000 Varitronix International Ltd. 947,360
380,000 Wharf Holdings Ltd. 1,465,508
17,358,360
Malaysia (8.1%)
120,000 Berjaya Singer Berhad Rights(c) 12
550,000 Bolton Properties Berhad 617,155
200,000 Carlsberg Brewery Malaysia Berhad 792,960
306,000 Development & Commercial Bank 572,281
225,000 Edaran Otomobil Nasional 1,287,630
152,000 Gamuda Berhad 500,323
80,000 Genting Berhad 778,008
543,750 George Kent (Malaysia) Behard 1,016,921
270,000 Hong Leong Industries Berhad 1,110,915
200,000 Kian Joo Can Factory Berhad 628,400
234,000 Leader Universal 1,032,806
240,000 Maruichi Malaysia Steel Tube 520,656
315,000 Pilecon Engineering Berhad 452,434
450,000 Sime Darby Berhad 1,026,765
9,000 Southern Bank 22,218
262,000 SungeiWay Holdings 1,087,798
500,000 The New Straits Times Press 1,346,550
330,000 UMW Holdings Berhad 604,824
30,000 United Engineers Berhad 117,822
15,000 United Engineers Berhad (Rights)(c) 2
13,516,480
Singapore (6.8%)
108,000 Clipsal Industries (Holdings) Ltd. 664,200
152,250 Development Bank of Singapore (Registered)1,348,981
100,000 Focal Finance Ltd. 232,020
830,000 IPC Corp. 708,986
581,000 Informatics Holdings Ltd. 685,173
125,000 Jurong Shipyard Ltd. 1,019,888
200,000 Keppel Corp. Ltd. 1,223,860
190,000 Singapore Airlines Ltd. 1,368,570
872,000 SAL Indl. Leasing Ltd. 789,334
191,125 United Overseas Bank Ltd. (Registered) 1,364,480
1,100,000 United Overseas Land Ltd. 1,318,240
300,000 Venture Manufacturing Inc. 688,440
11,412,172
Australia (4.7%)
230,179 Amcor, Ltd. 1,532,140
180,000 Brambles Industries, Ltd. 1,717,020
1,988,000 Burswood Property Trust 2,230,934
70,000 CRA Ltd. 817,971
260,000 News Corp. Ltd. 1,632,150
7,930,215
Indonesia (2.0%)
116,500 Bank Bali (Registered) 389,413
216,500 HM Sampoerna PT 1,547,867
453,000 Indonesia Fund 680,044
300,000 PT Smart Corporation 748,620
3,365,944
United States (1.8%)
60,000 AFLAC Inc. 1,845,000
8,000 Seoul Access Trust(c) 1,160,000
3,005,000
Thailand (1.6%)
70,000 Bangkok Bank (Registered) 494,053
25,000 Bumrungrad Hospital Co. 91,198
2,250,000 Ruam Pattana Fund 1,316,025
1,150,000 Sinpinyo Fund No. 5(c) 843,525
2,744,801
Total Common Stocks (cost $143,039,160) $145,224,584
Warrants (2.3%)(a)(c)
Number of Warrants Expiration Date Value
Japan (2.3%)
4,400 Canon Inc. Ltd. (No.4)(d) 05/24/95 470,250
1,150 Casio Computer Co. Ltd.
(No. 4)(d) 03/04/97 256,594
2,600 Citizen Watch Co., Ltd.(d) 10/22/96 203,125
220 Daiwa Kosho Lease Ltd.(d) 09/20/94 6,188
4,500 Senko Co., LTD.
(Swiss Francs)(e) 12/09/97 694,759
6,000 Tsurumi Manufacturing
(No. 2)(d) 11/05/96 663,750
4,100 Yam atake-Honeywell Ltd.(d) 02/12/97 771,313
6,000 Yodogawa Steel Works Ltd.(d) 12/10/97 731,250
3,797,229
Singapore ( -- %)
11,600 Clipsal Industries (Holdings)
Ltd.(d) 8/12/98 23,200
Hong Kong ( -- %)
80 Luks Industrial Co. Ltd.(e) 6/30/96 4
Total Warrants (cost $3,836,852) $3,820,433
Short-Term Investments (9.6%)(a) (cost $16,104,350)
Principal Amount Value
$16,098,000 Interest in $388,043,000 joint
repurchase agreement dated
March 31, 1994 with Bankers
Trust due April 4, 1994 with
respect to various U.S. Treasury
obligations -- maturity
value of $16,104,350 for an effective
yield of 3.55% $16,104,350
Total Investments
(cost $162,980,362)(f) $165,149,367
(a) Percentages indicated are based on total net assets of
$167,553,419, which correspond to a net asset value per class A
share and class B share of $13.65 and $13.60, respectively.
(b) Securities whose values are determined or significantly
influenced by trading on exchanges not in the United States or
Canada.
(c) Non-income-producing security.
(d) U.S. dollar-denominated.
(e) Foreign currency denominated.
(f) The aggregate identified cost on a tax basis is
$162,980,362, resulting in gross unrealized appreciation and
depreciation of $11,905,681 and $9,736,675, respectively, or net
unrealized appreciation of $2,169,005.
<PAGE>
Forward Currency Contracts Outstanding at March 31, 1994
Market Aggregate Delivery Unrealized
Value Face Value DateAppreciation
Japanese
(Sell) $45,071,966 $45,182,934 7/1/94 $110,968
<PAGE>
<TABLE>
<CAPTION>
Statement of
assets and liabilities
March 31, 1994 (Unaudited)
<S> <C> <C>
Assets
Investments in securities, at value
dentified cost $162,980,362) (Note 1) $165,149,367
Receivable for securities sold 2,864,004
Receivable for shares of the Fund sold 1,661,835
Dividends and other receivables 434,953
Receivable for open forward currency contracts 110,968
Unamortized organization expenses (Note 1) 5,632
Total assets 170,226,759
Liabilities
Payable for securities purchased $810,862
Payable for compensation of Manager (Note 2) 440,475
Payable for shares of the Fund repurchased 906,427
Payable for investor servicing and custodian (Note 2) 134,933
Payable for compensation of Trustees (Note 2) 956
Payable for administrative services (Note 2) 448
Payable for distribution fees (Note 2) 114,897
Other accrued expenses 38,400
Payable to sub-custodian bank (Note 2) 225,942
Total liabilities 2,673,340
Net assets $167,553,419
Represented by
Paid-in capital (Notes 4 and 5) $156,459,675
Accumulated net investment loss (43,354)
Accumulated net realized gain on investment transactions 8,850,215
Net unrealized foreign currency translation gains 6,910
Net unrealized appreciation of investments and foreign currency contracts 2,279,973
Total -- Representing net assets applicable to capital shares outstanding $167,553,419
Computation of net asset value and offering price
Net asset value and redemption price of Class A shares
($101,646,456 divided by 7,446,725 shares) $13.65
Offering price per share (100/94.25 of $13.65)* $14.48
Net asset value and offering price of Class B shares
($65,906,963 divided by 4,847,316)** $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 sales
charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of
operations
Six months ended March 31, 1994 (Unaudited)
<S> <C> <C>
Investment income:
Dividends (net of foreign tax of $108,690) $944,406
Interest 107,094
Total investment income 1,051,500
Expenses:
Compensation of Manager (Note 2) $426,032
Investor servicing and custodian fees (Note 2) 212,444
Reports to shareholders 17,423
Compensation of Trustees (Note 2) 4,170
Administrative services (Note 2) 3,708
Auditing 8,773
Registration fees 41,331
Legal 4,539
Postage 6,753
Amortization of organization expenses (Note 1) 1,494
Distribution fees -- Class A (Note 2) 97,799
Distribution fees -- Class B (Note 2) 189,522
Other expenses 2,908
Total expenses 1,016,896
Net investment income 34,604
Net realized gain on investments (Notes 1 and 3) 9,084,943
Net realized loss on foreign currency (Note 1) (2,131)
Net unrealized foreign currency translation gains during the period 7,013
Net unrealized appreciation of investments during the period 228,977
Net gain on investments 9,318,802
Net increase in net assets resulting from operations $9,353,406
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
changes in net assets
Six months ended Year ended
March 31 September 30
1994* 1993
<S> <C> <C>
Increase in net assets
Operations:
Net investment income (loss) $34,604 $(41,679)
Net realized gain on investments 9,084,943 285,014
Net realized gain (loss) on foreign currency (2,131) 229
Net realized loss on forward currency contracts -- (73,054)
Net unrealized foreign currency translation gains 7,013 33
Net unrealized appreciation of investments, options
and forward currency contracts 228,977 1,951,659
Net increase in net assets resulting from operations 9,353,406 2,122,202
Distribution to shareholders from net realized gain on
investments:
Class A (201,104) --
Class B (93,170) --
Increase from capital share transactions (Note 4) 124,443,067 29,380,823
Total increase in net assets 133,502,199 31,503,025
Net assets
Beginning of period 34,051,220 2,548,195
End of period (including accumulated net investment
losses of $(43,354) and $(36,226), respectively) $167,553,419 $34,051,220
* Unaudited
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights*
(For a share outstanding throughout the period)
For the period For the period
June 1, 1993 February 20, 1991
Six months (commencement Six months (commencement
ended of operations to ended Year ended of operations to
March 31 September 30 March 31 September 30 September 30
1994*** 1993** 1994*** 1993 1992 1991
Class B Class A
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.54 $10.86 $11.55 $8.17 $8.08 $8.58
Investment Activities
Net Investment
Income (Loss) .05 (.02) .07 (.03) (.01)(a) .02(a)
Net Realized and
Unrealized Gain (Loss)
on Investments 2.0 5.70 2.07 3.41 .10 (.52)
Total from Investment
Operations 2.10 .68 2.14 3.38 .09 (.50)
Less Distributions from:
Net Investment Income -- -- -- -- --
Net Realized Gain on
Investments (.04) -- (.04) -- -- --
Total Distributions (.04) -- (.04) -- -- --
Net Asset Value,
End of Period $13.60 $11.54 $13.65 $11.55 $8.17 $8.08
<PAGE>
Total Investment
Return at Net Asset
Value (%) (b) 36.44(c) 18.97(c) 37.10(c) 41.37 1.11 (9.56)(c)
Net Assets, End of Period
(in thousands) $65,907 $9,901 $101,646 $24,150 $2,548 $2,084
Ratio of Expenses to Average Net
Assets (%) 2.53(c) 2.57(c) 1.79(c) 2.03 1.88(a) 2.27(a)(c)
Ratio of Net Investment
Income (Loss) to Average
Net Assets (%) (.39)(c) (.75)(c) .30(c) (.54) (.06)(a) .46(a)(c)
Portfolio Turnover (%) 48.89 79.78 48.89 79.78 95.67 47.11
* Financial highlights for periods ended through September 30, 1992 have been restated to conform with requirements
issued by the SEC in April 1993.
** Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
*** Unaudited
(a) Reflects a voluntary expense limitation in effect during the period. As a result of such limitation, expenses of
the Fund for the periods ended September 30, 1991 and 1992, reflect a per share reduction of approximately $0.08 and
$0.01, respectively. See Note 2.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Annualized.
/TABLE
<PAGE>
Notes to
financial statements
March 31, 1994 (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 common stocks and other securities of companies
located in Asia and in the Pacific Basin.
The Fund offers both Class A and Class B shares. The Fund
commenced its public offering of Class B shares on June 1, 1993.
Class A shares are sold with a maximum front-end sales charge of
5.75%. Class B shares do not pay a front-end sales charge, but
pay a higher ongoing distribution fee than Class A shares, and
are subject to a contingent deferred sales charge if those shares
are redeemed with in six years of purchase. Expenses of the Fund
are borne pro-rata by the holders of both classes of shares,
except that each class bears expenses unique to that class
(including the distribution fees applicable to such class), and
votes as a class only with respect to its own distribution plan
or other matters on which a class vote is required by law to
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 policies are in conformity with
generally accepted accounting principles.
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. (See
Section E of Note 1 with respect to the valuation of options and
forward currency contracts.)
Securities quoted in foreign currencies are translated into U.S.
dollars at the current exchange rate. Gains and losses that arise
from changes in exchange rates are not segregated from gains and
losses that arise from changes in market prices of investments.
The effects on net investment income arising from changes in
exchange rates are also not segregated.<PAGE>
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 and certain other accounts of other registered
investment companies managed by Putnam Investment Management Inc.
(Putnam Management) (formerly known as The Putnam Management
Company, Inc.), the Fund's Manager, a wholly-owned subsidiary of
Putnam Investments, Inc. (formerly known as The Putnam Companies,
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 an amount at least equal to the resale price,
including accrued interest. The Fund's Manager is responsible for
determining that the value of these underlying securities is at
all times at least equal to the resale price, including accrued
interest.
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.
Foreign-currency-denominated receivables and payables are marked-
to-market using the current exchange rate. The fluctuation
between the original exchange rate and the current exchange rate
is recorded as unrealized translation gain or loss. Upon receipt
or payment, the Fund realizes a gain or loss amounting to the
difference between the original value and the ending value of the
receivable or payable. Foreign currency gains and losses related
to interest receivable are reported as part of interest income.
E) Option accounting principles The premium paid by the Fund for
the purchase of a call or put option is included in the Fund's
Statement of Assets and Liabilities as an investment and
subsequently marked-to-market to reflect the current market value
of the option. If an option the Fund has purchased expires on the
stipulated expiration date, the Fund realizes a loss in the
amount of the cost of the option. If the Fund enters into a
closing sale transaction, the Fund realizes a gain or loss,
depending on whether the proceeds from the closing sale
transaction are greater or less than the cost of the option. If
the Fund exercises a purchased call option, the cost of the
security or currency acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put
option, it realizes a gain or loss from the sale of the
underlying security or currency and the proceeds from such sale
are decreased by the premium originally paid.
Options on foreign currencies The Fund writes and purchases put
and call options on foreign currencies. The accounting principle
and risks involved are similar to those described above relating
to options on securities. The amount of potential loss to the
Fund upon exercise of a written call option is the value (in U.S.
dollars) of the currency sold, converted at the spot price, less
the value of U.S. dollars received in exchange. The amount of
potential loss to the Fund upon exercise of a written put option
is the value (in U.S. dollars) of the currency received converted
at the spot price, less the value of the U.S. dollars paid in
exchange.
Forward currency contracts A forward currency contract is an
agreement between two parties to buy and sell a currency at a set
price on a future date. 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 the market value is
recorded by the Fund 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 of U.S. dollars at the time the contract was
opened, however, management believes the likelihood of such a
loss is remote.
F) Federal taxes It is the policy of the Fund to distribute all
of its income within the prescribed time and otherwise comply
with the provisions of the 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 of securities
held and excise tax on income and capital gains.
G) Distributions to shareholders Distributions to shareholders
are recorded by the Fund on the ex-dividend date.
H) 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 $14,777. These
expenses are being amortized on a straight-line basis over a
five-year period.
Note 2 Management fee, administrative services, and other
transactions
Compensation of Putnam Management, the Fund's Manager, a wholly-
owned subsidiary of Putnam Investments, Inc., for management and
investment advisory services is paid quarterly based on the
average net assets of the Fund for the quarter. Such fee is at an
annual rate 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. The fee is
subject to reduction in any year to the extent that expenses
(exclusive of distribution fees, brokerage, interest and taxes)
of the Fund exceed 2.5% of the first $30 million of average net
assets, 2% of the next $70 million and 1.5% of any amount over
$100 million and 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 1, 1993, the Manager voluntarily agreed to reduce
its compensation and to the extent necessary, absorb certain Fund
expenses, to the extent that expenses of the Fund exceed 1.90% of
average net assets. The Fund's expenses subject to this
limitation are exclusive of brokerage, interest, taxes, deferred
organizational and extraordinary expenses, and payments required
under the Fund's Distribution Plan. This limitation is
accomplished by a reduction of the compensation payable under the
management contract to the Manager and, if necessary, payment of
additional Fund expenses by the Manager.
The Fund also 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. For the six months ended March 31, 1994, the Fund
incurred $3,708 for these services.
Trustees of the Fund receive an annual Trustee's fee of $4,170
and an additional fee for each Trustee's meeting attended.
Trustees who are not interested persons of the Manager and who
serve on committees of the Trustees receive additional fees for
attendance at certain committee meetings.
Custodial functions for the Fund are provided by Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam
Investor Services, a division of PFTC. Fees paid for these
investor servicing and custodial functions for the six months
ended March 31, 1994, amounted to $212,444.
Investor servicing fees reported in the Statement of operations
for the six months ended March 31, 1994 have been reduced by
credits allowed by PFTC.
The Fund has adopted a distribution plan with respect to its
Class A shares (the Class A Plan) pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the Class A
Plan is to compensate Putnam Mutual Funds Corp. (formerly known
as Putnam Financial Services, Inc.), a wholly-owned subsidiary of
Putnam Investments Inc., for services provided and expenses
incurred by it in distributing Class A shares. The Trustees have
approved payment by The Fund to Putnam Mutual Funds Corp. at an
annual rate of 0.25% of the Fund's average net assets
attributable to Class A shares. For the six months ended March
31, 1994, the Fund paid $97,799 in distribution fees for Class A
shares.
During the six months ended March 31, 1994, Putnam Mutual Funds
Corp., acting as an underwriter, received net commissions of
$211,904 from the sale of Class A shares of the Fund.
A deferred sales charge of up to 1% is assessed on certain
redemptions of Class A shares purchased as part of an investment
of $1 million or more. For the six months ended March 31, 1994,
Putnam Mutual Funds Corp., acting as underwriter, received $9,026
on deferred sales charges on Class A redemptions.
The Fund has adopted a distribution plan with respect to its
Class B shares (the Class B Plan) pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of Class B Plan
is to compensate Putnam Mutual Funds Corp. for services provided
and expenses incurred by it in distributing Class B shares. The
Class B Plan provides for payments by the Fund to Putnam Mutual
Funds Corp. at an annual rate of 1.00% of the Fund's average net
assets attributable to Class B shares. For the six months ended
March 31, 1994, the Fund paid Putnam Mutual Funds Corp.
distribution fees of $189,522 for Class B shares.
Putnam Mutual Funds Corp. also receives the proceeds on the
contingent deferred sales charges on its Class B share
redemptions within six years of purchase. The charge is based on
declining rates, which begin at 5% of the net asset value of the
redeemed shares. Putnam Mutual Funds Corp. received contingent
deferred sales charges of $31,602 from redemptions during the
period ended March 31, 1994.
As part of the custodian contract between the sub-custodian and
PFTC, the sub-custodian bank has a lien in the securities of the
fund to the extent permitted by the Fund's investment
restrictions to any advances make by the sub-custodian bank for
the settlement of securities purchased by the Fund. At March 31,
1994 the payable to sub-custodian bank represents the amount due
for cash advanced for the settlement of a security purchased.
<PAGE>
Note 3 Purchases and sales of securities
During the six months ended March 31, 1994, purchases and sales
of investment securities other than short-term investments
aggregated $158,073,924 and $47,112,596, respectively. In
determining the net gain or loss on securities sold, the cost of
securities has been determined on the identified cost basis.
Transactions in forward currency contracts during the period are
summarized as follows:
Sales of
Forward Currency Contracts
Aggregate Face Value
Contracts opened $45,182,934
Contracts closed --
Open at end of period $45,182,934
<PAGE>
<TABLE>
<CAPTION>
Note 4 Capital shares
At March 31, 1994, there was an unlimited number of shares of beneficial interest
authorized. Transactions in capital shares were as follows:
Six months ended Year ended
March 31 September 30
1994 1993
Class A Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 9,142,001 $122,355,884 2,239,308 $24,888,619
Shares issued in connection with
reinvestment of distributions 14,010 187,312 -- --
9,156,011 122,543,196 2,239,308 24,888,619
Shares repurchased (3,799,545) (51,632,639) (460,756) (5,131,406)
Net increase 5,356,466 70,910,557 1,778,552 $19,757,213
June 1, 1993
(commencement of
Six months ended ended operations) to
March 31 September 30
1994 1993
Class B Shares Amount Shares Amount
Shares sold 4,728,480 $63,546,646 879,318 $9,865,269
Shares issued in connection with
reinvestment of distributions 6,090 81,248 -- --
4,734,570 63,627,894 879,318 9,865,269
Shares repurchased (745,111) (10,095,384) (21,461) (241,659)
Net increase 3,989,459 53,532,510 875,857 $9,623,610
/TABLE
<PAGE>
Note 5 Reclassification of Capital Accounts
Effective October 1, 1993, Putnam Asia Pacific Growth Fund has
adopted the provisions of the AICPA Statement of Position (SOP)
93-2 "Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of Capital
Distributions, by Investment Companies." The purpose of this SOP
is to report the accumulated net investment income (loss)
accounts in such a manner as to approximate amounts available for
future distributions (or to offset future realized capital gains)
and to achieve uniformity in the presentation of distributions by
investment companies.
As a result of the SOP, the Fund has reclassified $41,732 to
increase accumulated net investment loss, $63,065 to increase
accumulated net realized gain and $21,333 to decrease paid in
capital.
These adjustments represent the cumulated amounts necessary to
report these balances through September 30, 1993, the close of
the Fund's most recent fiscal year end for financial reporting
and tax purposes.
Fund performance supplement
Putnam Asia Pacific Growth Fund is a portfolio managed for
capital appreciation primarily through investments in common
stocks of companies located in Asia and in the Pacific Basin.
Fund performance data do not take into account any adjustment for
taxes that may have been payable.
Standard & Poor's 500 Index is an unmanaged list of large-
capitalization common stocks and is used as a gauge of general
U.S. market performance. The Morgan Stanley Capital International
Pacific Index is an unmanaged list of 418 companies listed on the
stock markets of Japan, Hong Kong, Singapore/Malaysia, Australia
and New Zealand. The indexes do not take into account brokerage
commissions or other costs. The fund's portfolio contains
securities that do not match those in the indexes.
This fund performance supplement has been prepared by Putnam
Management to provide further detail about the fund and the
indexes used for performance comparisons. It is not part of the
portfolio of investments owned or the financial statements.
<PAGE>
Your Trustees
George Putnam
Chairman
Chairman and President,
The Putnam Funds
William F. Pounds
Vice Chairman
The Putnam Funds,
Professor of Management,
Alfred P. Sloan
School of Management,
Massachusetts Institute of
Technology
Jameson Adkins Baxter
President,
Baxter Associates, Inc.
Hans H. Estin
Vice Chairman,
North American
Management Corporation
John A. Hill
Principal and
Managing Director,
First Reserve Corp.
Elizabeth T. Kennan
President
Mount Holyoke College
Lawrence J. Lasser
President and
Chief Executive Officer,
Putnam Investments, Inc.
Robert E. Patterson
Executive Vice President,
Cabot Partners
Limited Partnership
Donald S. Perkins
Director of various
corporations
George Putnam, III
President, New Generation
Research, Inc.
<PAGE>
A.J.C. Smith
Chairman of the Board
and Chief Executive Officer,
Marsh & McLennan
Companies, Inc.
W. Nicholas Thorndike
Director of various
corporations
<PAGE>
Putnam
Asia Pacific
Growth Fund
Fund information
Investment manager
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
Marketing services
Putnam Mutual Funds
One Post Office Square
Boston, MA 02109
Investor servicing agent
Putnam Investor Services
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
(DALBAR logo)
Putnam Investor Services
has received the DALBAR
award each year since the
award's 1990 inception.
In more than 10,000 tests
of 38 shareholder
service components,
Putnam outperformed
the industry standard
in every category.
A36-11891
<PAGE>
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Anthony W. Regan
Vice President
David K. Thomas
Vice President and Fund Manager
William N. Shiebler
Vice President
Peter Carman
Vice President
John R. Verani
Vice President
John D. Hughes
Vice President and Treasurer
Paul O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Asia
Pacific 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.
<PAGE>
- ---------------------
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
- ---------------------
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
APPENDIX TO FORM N30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN
PRINTED AND EDGAR-FILED TEXTS:
(1) Rule lines for tables are omitted.
(2) Boldface and italic typefaces are displayed in normal type.
(3) Headers (e.g, the name of the fund) and footers (e.g., page
numbers and "The accompanying notes are an integral part of these
financial statements") are omitted.
(4) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(5) Bullet points and similar graphic signals are omitted.
(6) Page numbering is different.
