Putnam
Asia Pacific
Growth Fund
SEMIANNUAL REPORT
March 31, 1995
[Logo scales]
B O S T O N * L O N D O N * T O K Y O
<PAGE>
Performance highlights
> "Not much is written in stone for Putnam Asia Pacific Growth Fund. . . .
[Fund Manager David] Thomas' successful maneuvering has left this fund with
. . . some of the group's better returns. . . . This fund certainly has an
attractive track record."
-- Morningstar Mutual Funds, February 17, 1995
> Morningstar awarded the fund its highest rating of five stars, which places
the fund in the top 10.0% of 1,158 equity funds rated as of March 31,
1995.*
> Performance should always be considered in light of a fund's investment
strategy. Putnam Asia Pacific Growth Fund is designed for investors seeking
capital appreciation primarily through a diversified portfolio of common
stocks of companies located in Asia and in the Pacific Basin.
SEMIANNUAL RESULTS AT A GLANCE
<TABLE>
<CAPTION>
Class A Class B
Total
return: NAV POP NAV CDSC
................................................................................................
<S> <C> <C> <C> <C>
(change in value
during period plus
reinvested
distributions)
6 months ended
3/31/95 -9.15% -14.35% -9.50% -13.88%
Class A Class B Class M
Share
value: NAV POP NAV NAV POP
................................................................................................
9/30/94 $ 14.64 $ 15.53 $14.53 -- --
2/1/95 -- -- -- $12.41 $12.86
3/31/95 12.87 13.66 12.72 12.86 13.33
Capital gains
Distributions: Long- Short-
No. Income term term Total
................................................................................................
Class A 1 -- $0.0340 $0.4110 $0.4450
Class B 1 -- 0.0340 0.4110 0.4450
Class M 0 -- -- -- --
</TABLE>
Performance data represent past results and will differ for each share class.
For performance over longer periods, see page 8. Performance for class M
shares, which became effective 2/1/95, is not shown because of the brevity of
the reporting period. POP assumes 5.75% maximum sales charge for class A
shares and 3.50% for class M shares. CDSC assumes 5% maximum contingent
deferred sales charge.
*Morningstar is an independent research firm that rates a fund in relation to
other funds with similar investment objectives, based on the fund's 3-year
average annual returns, adjusted for risk factors and sales charges. Ratings
are updated monthly. For the 3-year period ending 3/31/95, there were 1,158
funds in Morningstar's equity category. The fund received 5 stars for the
3-year period. Past performance is not indicative of future results.
<PAGE>
From the Chairman
Dear Shareholder:
[photo of George Putnam]
(c) Karsh, Ottawa
As Putnam Asia Pacific Growth Fund reached the midpoint of its current fiscal
year on March 31, 1995, Japan was still assessing the economic impact of the
earthquake in Kobe and the strength of the yen against the U.S. dollar.
The sharp devaluation of Mexico's peso further exacerbated investors' fears
concerning emerging market investments, including those in the Pacific Basin,
as many worried that devaluations might be repeated elsewhere. All in all,
the past six months have been difficult for those who invested in the Pacific
Basin. Nevertheless, Fund Manager David Thomas remains optimistic about the
long-term prospects for the region.
In the report that follows, David reviews the fund's performance so far in
fiscal 1995 and makes some projections for the months ahead.
Respectfully yours,
[Signature of George Putnam]
George Putnam
Chairman of the Trustees
May 17, 1995
<PAGE>
Report from the fund manager
David K. Thomas
The Pacific Basin countries and their rapidly expanding economies have often
been characterized by their extraordinary growth potential, and Putnam Asia
Pacific Growth Fund's performance through September 30, 1994, was exceptional
by any standard. One must not forget, however, that the region's outstanding
reward potential is often accompanied by a good measure of volatility. It is
important to keep this risk/reward relationship in perspective when reviewing
your fund's performance during the semiannual period ended March 31, 1995.
> JAPAN: HOSTAGE TO FORTUNE
As the region's dominant and most stable stock market, the Japanese stock
market consistently offers the greatest number of investment opportunities.
Investments in Japan remained the fund's largest weighting throughout the
period, providing a defensive alternative to the smaller, more volatile
markets of Southeast Asia. Unfortunately, the lack of progress in the
Japanese stock market dampened your fund's performance, although the strength
of the yen relative to the U.S. dollar softened the blow.
At the outset of fiscal 1995, we anticipated a promising recovery in Japan.
Unfortunately, our outlook has since dampened considerably. Plagued by
weakened consumer demand, a rising trade surplus, heavy competition, a
dramatically stronger currency, and political instability, the Japanese
manufacturing sector has suffered substantial declines in profitability.
Unforeseen events, such as the Kobe earthquake, and the Tokyo poison gas
attacks, have kept consumer confidence low and have strained the very social
fabric of Japan. Meanwhile, the government's indecisiveness has not helped
the recovery progress.
Given these events, combined with the ongoing strength of the yen and its
strangling effect on the economic recovery, we have reduced our expectations
for strong profit advances in Japan this year. However, it can be said that
opportunities can be found in even the bleakest environments. Despite a
lackluster economic background, many quality companies are, in fact, showing
profits
<PAGE>
above expectations, and corporate restructuring measures are making some
headway. Additionally, many of your fund's Japanese blue-chip stocks have
recovered a bit. The market's decline over the past six months has resulted
in historically attractive valuations. This has provided us with the
opportunity to search out some promising investments, such as Tokyo Electric
Power, a beneficiary of a strong yen and low interest rates.
> SOUTHEAST ASIA: INTEREST RATES AND THE "TEQUILA EFFECT"
The Southeast Asian markets faced a volatile environment during the past six
months. The region's smaller markets, which had exhibited such strength this
past summer, weakened once more as they were rocked again by rising interest
rates in the United States. By December, sharp declines were recorded in Hong
Kong, Malaysia, and Thailand. The Mexican peso debacle in January further
exacerbated the declines, casting aspersions on other emerging markets.
Dubbed the "tequila effect" by industry veterans, sovereign credit risk has
become the issue du jour for smaller countries. The Mexican government's
questionable solvency has widespread implications for similarly leveraged
countries. Just as confidence in the global financial system is measured by
how the U.S. dollar trades, the performance of emerging markets is currently
an equal indicator. Investor patience is critical to the stabilization of
these markets.
TOP 10 HOLDINGS (3/31/95)
United Overseas Bank Ltd., Singapore
........................................................................
Development Bank of Singapore, Singapore
........................................................................
AFLAC Inc., U.S.
........................................................................
City Developments Ltd., Singapore
........................................................................
Mitsubishi Bank, Japan
........................................................................
P.T.H.M. Sampoerna, Indonesia
........................................................................
Jardine Matheson Holdings Ltd., Hong Kong
........................................................................
Tokyo Electric Power, Japan
........................................................................
Nishimatsu Construction Co., Japan
........................................................................
Yamanouchi Pharmaceutical Co. Ltd., Japan
These holdings represent 16.8% of the fund's assets. Portfolio holdings will
vary over time.
<PAGE>
Historically, Australia has not been subject to the same levels of volatility
as the smaller Southeast Asian markets, but it currently offers little upside
potential in an environment of rising interest rates. In Thailand, too many
equity issues and rising interest rates have helped slow market momentum,
while the main factor working against Indonesia has been the deteriorating
liquidity in the market. China remains under a cloud, with its economy still
overheating, its state-owned companies in dire financial straits, and tension
continuing with the United States regarding intellectual property rights.
Your fund continues to have no direct exposure to the Chinese market.
> DEFENSIVE CURRENCY MANAGEMENT: THE TIE THAT BINDS
We believe earning above-average returns at below-average risk in Pacific
Basin stock markets requires a careful balance of three variables: country
allocation, company selection, and currency protection. Because any gains or
losses realized from foreign investments in local currency terms must then be
translated into U.S. dollars, currency protection is a key factor in fund
performance. We implement currency hedging strategies as a protective
measure, primarily when the U.S. dollar is fundamentally undervalued relative
to historical levels.
Throughout the semiannual period, the dollar traded erratically against
several foreign currencies, including the yen. Economic and market indicators
pointed to the dollar strengthening; however in the early months of calendar
1995, the dollar experienced a protracted slide, unexpectedly hitting
successive post-World War II lows against the yen. In February, we removed
the partial hedge we had placed on the fund's yen exposure, and the fund
benefited from the yen's significant rise in March.
> OUTLOOK: PATIENTLY WAITING FOR THE TIDE TO TURN
Currency concerns notwithstanding, we believe the Japanese economy will
recover its health eventually. The recent government plan to stimulate the
economy, which included a cut in the discount rate, should speed the recovery
and reduce the strength of the yen. We
<PAGE>
ALLOCATIONS BY COUNTRY
<TABLE>
<CAPTION>
<S> <C> <C>
As of 9/30/94 3/31/95
..............................................................................
Japan 48.0 % 46.8 %
..............................................................................
Singapore 8.3 14.0
..............................................................................
Malaysia 10.9 8.9
..............................................................................
Hong Kong 8.9 9.3
..............................................................................
Taiwan 3.0 4.0
..............................................................................
Indonesia 3.4 2.6
..............................................................................
Australia 6.4 2.4
..............................................................................
South Korea 1.1 2.4
..............................................................................
Philippines 0.0 1.2
..............................................................................
India 0.9 0.7
..............................................................................
Thailand 3.5 0.7
</TABLE>
Based on net assets as of indicated date. Geographic breakdown will vary over
time.
expect the Japanese market to respond favorably to any such weakening;
therefore, we are actively considering reintroducing a hedging strategy.
Admittedly, the fund's heavy weighting in Japan has so far been premature,
but experience tells us that it is essential to be positioned in the Japanese
market well ahead of positive events. Japanese share prices respond very
quickly to good news, and late-comers are often faced with slim prospects.
We believe in the long-term growth prospects of the smaller markets.
Corporate earnings have remained strong, and stock prices in Hong Kong,
Singapore, and Malaysia have dropped to more reasonable levels. Any weakness
in share prices may well present attractive investment opportunities in the
months ahead, and we will look to increase the fund's exposure to these
markets when appropriate.
The views expressed in this report are exclusively those of Putnam
Management, and are not meant as investment advice. Although the described
holdings were viewed favorably as of March 31, 1995, there is no guarantee
the fund will continue to hold these securities in the future.
Foreign investments are subject to certain risks, such as currency
fluctuations and political developments not present with domestic
investments.
<PAGE>
Performance summary
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares changed
over time, assuming you held the shares through the entire period and
reinvested all distributions back into the fund. We show total return in two
ways: on a cumulative long-term basis and on average how the fund might have
grown each year over varying periods. For comparative purposes, we show how
the fund performed relative to appropriate indexes and benchmarks.
TOTAL RETURN FOR PERIODS ENDED 3/31/95
most recent calendar quarter
<TABLE>
<CAPTION>
Class A Class B MSCI
Pacific
NAV POP NAV CDSC Index CPI
<S> <C> <C> <C> <C> <C> <C>
6 months -9.15% -14.35% -9.50% -13.88% -4.12% 1.34 %
1 year -2.56 -8.14 -3.31 -7.99 2.65 2.85
3 years 68.89 59.22 -- -- 51.94 8.69
Annual average 19.09 16.77 -- -- 14.97 2.82
Life of class A 55.51 46.62 -- -- 18.10 12.32
Annual average 11.34 9.76 -- -- 4.16 2.87
Life of class B -- -- 21.46 17.46 7.63 4.99
Annual average -- -- 11.21 9.19 4.10 2.70
</TABLE>
The fund began operations on 2/20/91, offering shares now known as class A.
Effective 6/1/93, the fund began offering class B shares and on 2/1/95, class
M shares. Performance data represent past results and will differ for each
share class. Performance for class M shares is not shown because of the
brevity of the reporting period. Investment returns and net asset value will
fluctuate so an investor's shares, when sold, may be worth more or less than
their original cost.
<PAGE>
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge on redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee than
class A shares and no sales charge upon 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 Morgan Stanley Capital International Pacific Index (MSCIP) is an
unmanaged list of Asian and Pacific Rim equity securities, excluding U.S.,
with all values expressed in U.S. dollars. Performance of the index reflects
changes in market price and reinvestment of distributions net of withholding
taxes. The fund's portfolio contains securities that differ from those in the
indexes. Investment in the fund is subject to special international risks,
such as currency fluctuations and political developments.
Consumer Price Index (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
<PAGE>
A Putnam perspective on risk and reward
You've probably been told how important it is to understand the relationship
between an investment's potential rewards and its accompanying risks. Given
the cautionary nature of such instructions, it may take most investors a
while to realize that risk has a positive side.
Every risk signals a potential reward. Selecting only those investments that
offer the greatest degree of security generally leads to only modest rewards.
Furthermore, even insured or guaranteed investments may be subject to changes
in their rates of return or, in some cases, in their principal values.
Experienced investors know that no investment is truly risk free and are
therefore willing to take on some measure of risk in order to increase their
potential gains.
The greater the risk, the greater the potential reward.
Accepting an appropriate level of investment risk can give you a better
chance of outpacing inflation over time and seeking to maximize your
investment's return. How much risk? Your financial
A RUNDOWN OF RISK TYPES
MARKET RISK Most important for stock funds, but relevant to all funds, this
is a measure of how sensitive a fund's holdings are to changes in general
market conditions. Remember, though, that securities that lose value quickly
in market declines may also show the strongest gains in more favorable
environments.
INTEREST-RATE RISK Since bond prices fall as interest rates rise, this type
of risk is a particular concern for fixed-income investors. However,
interest-rate increases can also have a substantial negative effect on the
stock market.
INFLATION RISK If your investments cannot keep pace with inflation, your
money will begin to lose its purchasing power. Stock investments are
generally considered among the best ways of addressing inflation risk over
the long term.
<PAGE>
advisor's feedback and your time horizon can make all the difference in
determining how much risk is compatible with your investment goals and your
peace of mind.
FITTING YOUR FUND SELECTION TO YOUR
RISK TOLERANCE
How do you find the right balance between investment risks and their
potential rewards. It's helpful to understand the types of risks that can
apply to different types of investments, and to look at your own portfolio
with this perspective.
For short-term goals, your first priority may be managing market risk.
Longer-term investors may be more concerned with inflation risk. And all
income-oriented investors should consider interest-rate, credit, and
prepayment risks carefully. Within each of Putnam's four investment
categories, you can select funds with differing levels of risk and reward
potential to customize your portfolio.
CREDIT AND PREPAYMENT RISK Credit risk is the concern that the security's
issuer will not be able to meet its payment, while prepayment risk involves
the premature payoff of a loan, with a resulting loss of interest income.
Professional management and in-depth research are invaluable in managing both
these risks.
LIQUIDITY RISK Not all investments can be readily converted into cash at
their perceived market values. Liquidity risk can affect the price of
securities held in the fund's portfolio and, thus, the fund's share prices.
This list covers only the most general types of risks; however, each
investment will also have its own specific risks. You will find a more
detailed discussion of these risk considerations in each fund's prospectus.
<PAGE>
Relative risk/reward potential of Putnam funds
These illustrations provide a simplified guide to the risk/reward potential for
funds within each category of the Putnam Family of Funds and are not intended
as investment advice. Your financial advisor can help you evaluate your risk
tolerance.
These rankings are relative only to Putnam funds and should not be compared
to other investments. There is no guarantee that one Putnam fund will be less
volatile than another, since each fund has its own investment risks. That's
why it is essential to read the fund's prospectus before investing.
PUTNAM GROWTH FUNDS
[Line Chart. Funds shown in progression from lower elements to higher
elements.]
Lower Risk
Lower Reward
Potential
Investors
Diversified Equity (1)
Global Growth (1)
Vista
Natural Resources
Health Sciences
Voyager
Overseas Growth (1)
Europe Growth (1)
New Opportunities (2)
OTC Emerging Growth (2)
Asia Pacific Growth (1)
High Risk Higher Reward Potential
PUTNAM GROWTH AND INCOME FUNDS
[Line Chart. Funds shown in progression from lower elements to higher
elements.]
Lower Risk Lower Reward Potential
Managed Income
Utilities Growth and Income
George Putnam
Convertible Income-Growth
Equity Income
Fund for Growth and Income
Putnam Growth and Income Fund II
Dividend Growth
Higher Risk Higher Reward Potential
(1) Foreign investments are subject to certain risks, such as currency
fluctuations and political developments, that are not present with
domestic investments.
(2) This fund invests all or a portion of its assets in small to medium-sized
companies, which increases the risk of price fluctuations.
(3) While U.S. government backing of individual securities does not insure
your principal, which will fluctuate, it does guarantee that the fund's
government-backed holdings will make timely payments of interest and
principal.
<PAGE>
PUTNAM INCOME FUNDS
[Line Chart. Funds shown in progression from lower elements to higher
elements.]
Lower Risk Lower Reward Potential
Money Market (4)
Adjustable Rate U.S. Gov't. (3)
Intermediate U.S. Gov't. Income
U.S. Gov't Income (3)
American Gov't. Income (3)
Federal Income (3)
Diversified Income (1),(3),(5)
Income
Preferred Income
Global Gov't. (1),(5)
High Yield (5)
High Yield Advantage (5)
Higher Risk Higher Reward Potential
PUTNAM TAX-FREE FUNDS(6)
[Line Chart. Funds shown in progression from lower elements to higher
elements.]
Lower Risk Lower Reward Potential
Tax Exempt Money Market (4)
Intermediate Tax Exempt
Tax-Free Insured (7)
Tax Exempt Income
Single-state tax-free funds*
Municipal Income
Tax-Free High Yield (5)
Higher Risk Higher Reward Potential
*State tax-free funds available for Arizona, California, Florida,
Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, and
Pennsylvania. Not available in all states.
LIFESTAGE(SM) FUNDS
Putnam Asset Allocation Funds -- three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments. The
three portfolios are:
> Putnam Asset Allocation: Balanced Portfolio
> Putnam Asset Allocation: Conservative Portfolio
> Putnam Asset Allocation: Growth Portfolio
Please call your financial advisor -- or Putnam at 1-800-225-1581 -- to
obtain a prospectus for any Putnam fund. The prospectus contains more
complete information, including risk considerations, charges, and expenses.
Read it carefully before you invest or send money.
(4) The fund is managed to maintain a steady price of $1.00 per share,
although there is no assurance this price can be maintained in the
future.
(5) The lower credit ratings of high-yield corporate and municipal bonds
reflect a greater possibility that adverse changes in the economy or
their issuers may affect their ability to pay principal and interest on
the bonds.
(6) Income may be subject to state and local taxes. Capital gains, if any,
are taxable for federal and, in most cases, state purposes.
(7) Bond insurance does not guarantee principal or protect against changes in
market price.
<PAGE>
Portfolio of investments owned
March 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (93.6%)*
NUMBER OF SHARES VALUE
<S> <C> <C>
Australia (2.4%)[diamond]
300,000 Amcor, Ltd. $ 2,061,060
1,500,000 CSL Ltd. 2,862,600
1,010,000 MIM Holdings Ltd. 1,386,326
6,309,986
Hong Kong (9.3%)[diamond]
285,000 Cheung Kong Holdings Ltd. 1,242,258
499,800 Guoco Group Ltd. 1,855,307
250,884 HSBC Holdings PLC 2,831,225
1,000,000 Hong Kong Electric Holdings, Ltd. 3,201,200
1,300,000 Hong Kong Land Holdings Ltd. 2,841,670
351,000 Hutchison Whampoa, Ltd. 1,548,085
1,153,000 J.F. Indonesia Equity Fund 1,304,850
440,648 Jardine Matheson Holdings Ltd. 3,965,832
1,200,000 Varitronix International Ltd. 1,769,400
1,150,000 Wharf (Holdings) Ltd. 3,755,785
24,315,612
Indonesia (2.6%)[diamond]
116,500 Bank Bali (Foreign Registered) 218,730
500,000 Bank Nisp 581,100
750,000 PT HM Sampoerna Industries (Foreign Registered) 3,972,975
1,400,000 PT Astra International (Foreign Registered) 2,033,920
6,806,725
India (0.7%)[diamond]
262,500 KEC International Ltd. 1,922,760
Japan (46.5%)[diamond]
28,900 Asatsu Inc. 1,113,720
87,000 Best Denki Co. Ltd. 1,304,950
198,000 Bridgestone Corp. 2,947,040
89,000 CSK Corp. 2,300,225
20,000 Chubu Electric Power., Inc. 535,364
190,000 Dai Nippon Printing Co., Ltd. 2,959,497
217,000 Daiwa Securities Ltd. 2,488,729
4,500 East Japan Railway Co. 2,206,646
259,000 Fujitsu, Ltd. 2,584,925
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
Japan (continued)
70,000 Futaba Industrial Co., Ltd. $ 3,392,179
102,000 Glory Ltd. 3,095,190
31,000 Hirose Electric Co. Ltd. 1,856,351
53,000 Hogy Medical Co. 2,140,304
52,000 Ito Yokado Ltd. 2,579,902
132,000 JGC Corp. 2,040,839
20,000 Komatsu, Ltd. 144,226
140,000 Kurita Water Ltd. 3,424,484
18,000 Mabuchi Motor Co. Ltd. 1,214,953
160,000 Marui Co., Ltd. 2,529,136
192,000 Matsushita Electric Ind. Ltd. 3,101,414
172,000 Mitsubishi Bank 3,988,920
273,000 Mitsubishi Motors Corp. 2,491,561
289,000 Mitsui Fudosan Co. Ltd. 2,267,465
93,000 Murata Manufacturing Co. Ltd. 3,616,128
180,000 Nichicon 2,762,208
229,200 Nippon Denwa Shisetsu Co., Ltd. 2,274,282
4,000 Nippon Telegraph and Telephone Corp. 3,452,174
133,000 Nippondenso Co., Ltd. 2,593,406
340,000 Nishimatsu Construction Co. 3,832,684
582,000 Nisshin Steel Co., Ltd. 2,618,883
197,000 Nittoc Construction Co. Ltd. 2,227,538
350,000 Nok Corp. 2,923,725
170,000 Omron Corp. 3,354,100
180,000 Rengo Co., Ltd 1,362,402
72,000 Rohm Co. Ltd. 3,140,186
48,000 SMC Corp. 2,381,448
180,000 Sanwa Bank Ltd. 3,447,558
45,000 Secom Co. 2,777,778
92,400 Taihei Dengyo Ltd. 1,705,777
170,000 Takuma Co. Ltd. 2,667,589
310,000 Toho Bank Ltd. 2,500,181
220,000 Tokio Marine & Fire Insurance Co. Ltd. 2,500,300
233,000 Tokuyama Corp. 1,303,845
124,000 Tokyo Electric Power 3,891,542
470,000 Toray Industries, Inc. 3,194,073
25,000 Toyo Seikan Kaisha Ltd. 778,818
150,000 Tsubakimoto Precision Prods. Ltd. 1,972,995
140,000 Yamaguchi Bank, Ltd. (The) 2,552,214
174,000 Yamanouchi Pharmaceutical Co. Ltd. 3,814,463
122,354,317
Malaysia (8.9%)[diamond]
250,000 Carlsberg Brewery of Malaysia 1,087,600
300,000 Edaran Otomobil Nasional 2,194,979
273,000 Genting (Berhad) 2,461,695
653,750 George Kent 1,305,669
520,000 Hong Leong Industries 2,673,528
350,000 Leader Universal 1,218,105
233,333 Leader Universal (New Class A) 765,915
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
Malaysia (continued)
470,000 Malayan Banking Berhad $ 3,178,563
540,000 Maruichi Malaysia Steel Tube 1,633,770
458,500 SungeiWay Holdings 1,849,589
360,000 Telekom Malaysia (Berhad) 2,491,596
900,000 The New Straits Times Press 2,438,190
23,299,199
Philippines (1.2%)[diamond]
50,000 Philippine Long Distance Telephone Co. ADR 3,025,000
South Korea (2.4%)[diamond]
10,000 Korea Zinc Co. 262,953
9,000 L.G. Chemical Ltd. 259,974
37,500 Mando Machinery Corp. 2,419,042
21,600 Seoul Access Trust 3,240,000
6,181,969
Singapore (14.0%)[diamond]
775,000 City Developments Ltd. 4,255,215
906,000 Clipsal Industries (Holdings) Ltd. 2,011,320
350,000 Cycle & Carriage Ltd. 2,975,560
533,000 Development Bank of Singapore 5,588,665
1,452,000 Informatics Holdings Ltd. 838,384
325,000 Keppel Corp. 2,624,862
115,000 Leader Universal 400,234
76,666 Leader Universal Class A 251,656
621,000 NatSteel Ltd. 1,297,890
358,000 Singapore Airlines Ltd. 3,576,205
521,000 Singapore Industrial Leasing 354,332
123,000 Singapore Press 2,082,673
655,125 United Overseas Bank Ltd. 6,497,857
1,450,000 United Overseas Land Ltd. 2,568,240
537,000 Venture Manufacturing Ltd. 1,392,441
36,715,534
Taiwan (3.2%)[diamond]
148,755 Hocheng Group Corp. GDR 144A+ 3,477,148
170,000 Tung Ho Steel GDR 144A+ 3,570,000
81,200 Yageo GDR 144A+ 1,502,202
8,549,350
<PAGE>
COMMON STOCKS
NUMBER OF SHARES VALUE
Thailand (0.7%)[diamond]
2,150,000 Ruam Pattana Fund (Foreign Registered) $ 1,200,990
1,150,000 Sinpinyo Fund 5 (Foreign Registered) 747,500
1,948,490
United States (1.7%)
110,000 AFLAC Inc. 4,441,250
Total Common Stocks (cost $243,619,613) $245,870,192
CONVERTIBLE BONDS (0.8%)*(cost $2,465,000)
PRINCIPAL AMOUNT VALUE
Taiwan (0.8%)
$ 2,550,000 Teco Electric & Machinery 144A $ 2,142,000
WARRANTS (0.3%)* [diamond]+(cost $1,384,000)
NUMBER OF WARRANTS EXPIRATION DATE VALUE
Japan (0.3%)
2,000 Sanwa Shutter Co. Ltd. 1/20/98 $ 800,001
SHORT-TERM AMOUNT (7.5%)*
PRINCIPAL VALUE
$ 10,000,000 Federal Home Loan Banks 5.9s, April 24, 1995 $ 9,962,306
5,000,000 Federal National Mortgage Association 5.91s, May 30,
1995 4,951,570
4,717,000 Interest in $510,221,000 joint repurchase agreement
dated March 31, 1995 with Goldman Sachs & Co. due April
3, 1995 with respect to various U.S. Treasury
obligations--maturity value of $4,717,823 for an
effective yield of 6.28% 4,717,823
Total Short-Term Investments
(cost $19,631,699) $ 19,631,699
Total Investments
(cost $267,100,312)*** $268,443,892
</TABLE>
<PAGE>
* Percentages indicated are based on net assets of $262,742,061, which
correspond to a net asset value per class A, class B and class M
share of $12.87, $12.72, and $12.86, respectively.
[diamond] Securities whose values are determined or significantly influenced by
trading on exchanges not in the United States or Canada.
+ Non-income-producing security.
*** The aggregate identified cost on a tax basis is $267,322,138
resulting in gross unrealized appreciation and depreciation of
$20,712,692 and $19,590,938, respectively, or net unrealized
appreciation of $1,121,754.
ADR, ADS or GDR after the name of a foreign holding stands for American
Depository Receipts, American Depository Shares, Global Depository Receipts,
respectively, representing ownership of foreign securities on deposit with a
domestic custodian bank.
144A after the name of a security represent 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.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of assets and liabilities
March 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Investments in securities, at value (identified cost $267,100,312)
(Note 1) $268,443,892
Cash 49
Receivable for securities sold 882,819
Receivable for shares of the fund sold 1,907,773
Dividends and other receivables 786,104
Unamortized organization expenses (Note 1) 2,643
Total assets 272,023,280
Liabilities
Payable for securities purchased 4,292,327
Payable for compensation of Manager (Note 2) 636,986
Payable for shares of the fund repurchased 3,884,989
Payable for investor servicing and custodian (Note 2) 206,007
Payable for compensation of Trustees (Note 2) 757
Payable for administrative services (Note 2) 2,144
Payable for distribution fees (Note 2) 183,965
Other accrued expenses 74,044
Total liabilities 9,281,219
Net assets $ 262,742,061
Represented by
Paid-in capital (Note 4) $ 273,078,864
Distributions in excess of net investment income (608,900)
Accumulated net realized loss on investment transactions (11,102,668)
Net unrealized appreciation of investments 1,374,765
Total--Representing net assets applicable to capital shares
outstanding $262,742,061
Computation of net asset value and offering price
Net asset value and redemption price of class A shares
($143,672,103 divided by 11,167,603 shares) $12.87
Offering price per class A share (100/94.25 of $12.87)* $13.66
Net asset value and offering price of class B shares ($118,907,259
divided by 9,351,651)+ $12.72
Net asset value and redemption price of class M shares ($162,699
divided by 12,650) $12.86
Offering price per share (100/96.50 of $12.86)* $13.33
</TABLE>
*On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
+Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of operations
Six months ended March 31, 1995 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Dividends (net of foreign tax of $182,478) $ 1,464,335
Interest 479,992
Total investment income 1,944,327
Expenses:
Compensation of Manager (Note 2) 1,045,791
Investor servicing and custodian fees (Note 2) 345,234
Reports to shareholders 46,652
Compensation of Trustees (Note 2) 9,835
Administrative services (Note 2) 3,887
Auditing 11,580
Registration fees 25,925
Legal 6,019
Postage 41,271
Amortization of organization expenses (Note 1) 1,494
Other expenses 8,486
Distribution fees (Note 2)
Class A 181,481
Class B 581,238
Class M 60
Total expenses 2,308,953
Net loss on investment transactions (364,626)
Net realized loss on investments (Note 3) (9,914,790)
Net realized loss on foreign currency translation and forward
currency contracts (430,300)
Net unrealized foreign currency translation gains during the
period 30,285
Net unrealized depreciation of investments during the period (15,201,096)
Net loss on investments (25,515,901)
Net decrease in net assets resulting from operations $(25,880,527)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of changes in net assets
<TABLE>
<CAPTION>
Six months
ended Year ended
March 31 September 30
1995* 1994
<S> <C> <C>
Increase in net assets
Operations:
Net investment loss $ (364,626) $ (443,219)
Net realized gain (loss) on investments,
foreign currency translation and forward
currency contracts (10,345,090) 8,483,816
Net unrealized appreciation (depreciation)
of investments, options and forward
currency contracts and foreign currency
translation gains (15,170,811) 14,494,683
Net increase (decrease) in net asset
resulting from operations (25,880,527) 22,535,280
Distributions to shareholders from:
Net realized gain on investments
Class A (4,817,914) (201,104)
Class B (3,916,466) (93,170)
Increase from capital share transactions
(Note 4) 36,919,581 204,145,161
Total increase in net assets 2,304,674 226,386,167
Net assets
Beginning of period 260,437,387 34,051,220
End of period (including distributions in
excess of net investment income of
$608,900 and $244,274, respectively) $262,742,061 $260,437,387
</TABLE>
*Unaudited.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
For the period
February 1, 1995 For the period
(commencement June 1, 1993
of operations) Six months Year (commencement of
to ended ended operations) to
March 31 March 31 September 30 September 30
1995+* 1995* 1994 1993+
Class M Class B
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $12.41 $14.53 $11.54 $10.86
Investment activities
Net investment income
(loss) .01 .42 (.03) (.02)
Net realized and
unrealized gain
(loss) on investments .44 (1.78) 3.06 .70
Total from investment
operations .45 (1.36) 3.03 .68
Less distributions
from:
Net investment income -- -- -- --
Net realized gain on
investments -- (.45) (.04) --
Total distributions -- -- (.04) --
Net asset value, end
of period $12.86 $12.72 $14.53 $11.54
Total investment
return at net asset
value (%) (b) 3.63(c) (9.50)(c) 26.31 6.26(c)
Net assets, end of
period (in thousands) $163 $118,907 $110,951 $9,901
Ratio of expenses to
average net assets
(%) .56(c) 1.16(c) 2.27(d) .86(c)
Ratio of net
investment income
(loss) to average net
assets (%) .18(c) (.34)(c) (.73)(d) (.25)(c)
Portfolio turnover (%) 42.78(c) 42.78(c) 65.02 79.78(c)
</TABLE>
* Unaudited
+ Per share net investment income (loss) has been determined on the basis
of the weighted average number of shares outstanding during the period.
(a) Reflects an 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) Not annualized.
(d) See Note 2.
<PAGE>
<TABLE>
<CAPTION>
For the period
February 20, 1991
Six months (commencement of
ended operations) to
March 31 Year ended September 30 September 30
1995* 1994 1993 1992 1991
Class A
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 14.64 $ 11.55 $ 8.17 $ 8.08 $ 8.58
Investment activities
Net investment income
(loss) .45 .04 (.03) (.01)(a) .02(a)
Net realized and
unrealized gain
(loss) on investments (1.77) 3.09 3.41 .10 (.52)
Total from investment
operations (1.32) 3.13 3.38 .09 (.50)
Less distributions
from:
Net investment income -- -- -- -- --
Net realized gain on
investments (.45) (.04) -- -- --
Total distributions (.45) (.04) -- -- --
Net asset value, end
of period $ 12.87 $ 14.64 $ 11.55 $ 8.17 $ 8.08
Total investment
return at net asset
value (%) (b) (9.15)(c) 27.15 41.37 1.11 (5.83)(c)
Net assets, end of
period
(in thousands) $143,672 $149,486 $24,150 $2,548 $2,084
Ratio of expenses to
average net assets
(%) .78(c) 1.53(d) 2.03 1.88(a) 1.38(a)(c)
Ratio of net
investment income
(loss) to average net
assets (%) .02(c) .01(d) (.54) (.06)(a) .28(a)(c)
Portfolio turnover (%) 42.78(c) 65.02 79.78 95.67 47.11(c)
</TABLE>
* Unaudited
+ Per share net investment income (loss) has been determined on the basis of
the weighted average number of shares outstanding during the period.
(a) Reflects an 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) Not annualized.
(d) See Note 2.
<PAGE>
Notes to financial statements
March 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 common stocks and other
securities of companies located in Asia and in the Pacific Basin.
The fund offers class A, B and M shares. 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 within six years of purchase. The fund commenced its
public offering of class M shares on February 1, 1995. Class M shares are
sold with a sales charge which is lower than the sales charge applicable to
class A shares and are not subject to any contingent deferred sales charge
when they are redeemed but pay a higher ongoing distribution fee 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 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 F 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.
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"), the fund's Manager, a
wholly-owned subsidiary of Putnam Investments, Inc. These balances may be
invested in one or more repurchase agreements and/or short-term money market
instruments.
<PAGE>
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) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at prevailing rates of exchange at period end. Purchases and sales of
securities, income receipts, and expense payments are translated into U.S.
dollars at the prevailing exchange rate on the respective dates of
transactions.
F) Option accounting principles The fund may, to the extent consistent with
its investment objectives and policies, seek to increase its current returns
by writing covered call and put options on securities it owns or in which it
may invest. 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 may, to the extent consistent with its
investment objectives and policies, write and purchase 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 or put
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 or paid in exchange. The
amount of poten-
<PAGE>
tial 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 The fund may engage in forward currency contracts
which are agreement between two parties to buy and sell a currency 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 the fund intends to buy are denominated, when a fund holds cash
reserves and short-term investments). 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.
G) 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.
H) Distributions to shareholders Distributions to shareholders are recorded
by the fund on the ex-dividend date.
The amount and character of income and gains to be distributed is determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. The differences include the treatment of
organizational expense and treatment of certain gains and losses on foreign
currency transactions. Reclassifications are made to the fund's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryovers) under income tax regulations.
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 $14,777. 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 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
<PAGE>
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.
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.
Trustees of the fund receive an annual Trustee's fee of $1,070 and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of the Manager and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
Custodial functions for the fund 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
Putnam Fiduciary Trust Company (PFTC).
Investor servicing and custodian fees reported in the Statement of operations
for the six months ended March 31,
1995 have been reduced by credits allowed by PFTC.
The fund has adopted distribution plans (the "Plans") with respect to its
class A shares, 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 Trustees have approved payment by the fund at an
annual rate of 0.25%, 1.00% and 0.75% of the average net assets attributable
to class A, class B and class M shares, respectively.
For the period ended March 31, 1995, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $144,798 and $444 from the sale of
class A and M shares, respectively. A deferred sales charge of up to 1.00% is
assessed on certain redemptions of class A shares purchased as part of an
investment of $1 million or more. For the period ended March 31, 1995, Putnam
Mutual Funds Corp., acting as underwriter received $63 on class A
redemptions. Contingent deferred sales charges from the redemption of class B
for the six-month period ended March 31, 1995, was $121,025.
<PAGE>
Note 3
Purchases and sales of securities
During the six months ended March 31, 1995, purchases and sales of investment
securities other than short-term investments aggregated $120,552,059 and
$96,523,334, respectively. 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 March 31, 1995, there was an unlimited number of shares of beneficial
interest authorized. Transaction in capital shares were as follows:
<TABLE>
<CAPTION>
Six months ended Year ended
March 31 September 30
1995 1994
<S> <C> <C> <C> <C>
Class A Shares Amount Shares Amount
Shares sold 7,760,837 $102,364,699 15,491,392 $ 213,580,560
Shares issued in connection with
reinvestment of distributions -- -- 14,011 187,312
7,760,837 102,364,699 15,505,403 213,767,872
Shares repurchased (6,803,539) (89,176,606) (7,385,357) (103,138,353)
Net increase 957,298 $ 13,188,093 8,120,046 $ 110,629,519
</TABLE>
<TABLE>
<CAPTION>
Six months ended Year ended
March 31 September 30
1995 1994
<S> <C> <C> <C> <C>
Class B Shares Amount Shares Amount
Shares sold 4,988,470 $ 65,806,885 8,671,210 $120,131,536
Shares issued in connection with
reinvestment of distributions -- -- 6,090 81,248
4,988,470 65,806,885 8,677,300 120,212,784
Shares repurchased (3,271,746) (42,233,111) (1,900,231) (26,697,142)
Net increase 1,716,724 $ 23,573,774 6,777,069 $ 93,515,642
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the period
February 1, 1995
(commencement of
operations) to
March 31
1995
<S> <C> <C>
Class M Shares Amount
Shares sold 12,650 $157,714
Shares issued in connection with reinvestment of
distributions -- --
12,650 157,714
Shares repurchased -- --
Net increase 12,650 $157,714
</TABLE>
<PAGE>
Our commitment to quality service
> CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested Service Seal for
the past five years. The award is presented annually by DALBAR Inc., an
independent firm that monitors and evaluates the quality of service provided
by mutual fund companies throughout the United States. During 1994, DALBAR
ranked firms by conducting 80,000 anonymous performance evaluations based on
55 service components.
> HELP YOUR INVESTMENT GROW.
Set up a systematic program for investing with as little as $25 a month from
a Putnam fund or from your checking or savings account.*
> SWITCH FUNDS EASILY.
You can move money from one account to another with the same class of shares
without a service charge. (This privilege is subject to change or
termination.)
> ACCESS YOUR MONEY QUICKLY.
You can get checks sent regularly or redeem shares any business day the
then-current net asset value, which may be more or less than the original
cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a helpful
Putnam representative.
> To make an additional investment in this or any other Putnam fund, contact
your financial advisor or call our toll-free number: 1-800-225-1581.
*Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market. Investors should consider their ability to
continue purchasing shares during periods of low price levels.
<PAGE>
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
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
Peter Carman
Vice President
Brett C. Browchuk
Vice President
David K. Thomas
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Vice President and Treasurer
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, 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.
<PAGE>
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
844/193/470-17786
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS:
(1) Bold and italic typefaces are displayed in normal type.
(2) Headers (e.g., the name of the fund) are omitted.
(3) Certain tabular and columnar headings and symbols are displayed
differently in this filing.
(4) Bullet points and similar graphic signals are omitted.
(5) Page numbering is omitted.
(6) Trademark symbol replaced with (TM)
