Putnam
Asia Pacific
Growth
Fund
SEMIANNUAL REPORT
March 31, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* Putnam Asia Pacific Growth Fund is a top long-term performer. The
fund's class A shares ranked first out of 13 funds tracked by Lipper
Analytical Services for the five-year period ending March 31, 1997.*
* "With the transfer of sovereignty over Hong Kong to China proceeding
smoothly. . . the prospects for the newly industrialized economies in
Asia remain bright."
-- World Economic Outlook, May 1997
International Monetary Fund
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
12 Portfolio holdings
16 Financial statements
*Lipper rankings are based on total return performance, vary over time,
and do not include the effects of sales charges. The fund's class A
shares ranked 18 out of 43 funds and 10 out of 27 funds for the one-
and three-year periods ended March 31, 1997, respectively. The fund's
class B shares ranked 20 out of 43 funds and 15 out of 27 funds for the
one- and three-year periods, respectively. The fund's class M shares
ranked 19 out of 43 funds for the one-year period. Past performance is
no guarantee of future results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[COPYRIGHT] Karsh, Ottawa
Dear Shareholder:
The stock markets of Asia and the Pacific Rim presented ample
opportunity to test the concept of active portfolio management and a
disciplined investment strategy during the first half of Putnam Asia
Pacific Growth Fund's current fiscal year. Damage control was not
management's major concern even as most of the region's markets, already
drifting, declined further during the period. It was, however, a
beneficial byproduct; the fund's performance, while negative, was
substantially more favorable than that of the market at large or than
that measured by the benchmark index.
By carefully choosing portfolio securities on a company-by-company
basis and strictly adhering to a demanding set of selection criteria,
the fund was able to escape much of the market volatility experienced
during the period. From a long-term perspective, your fund's managers
believe the more significant benefit is that the portfolio should be
well positioned to take advantage of future opportunities in any
market recovery.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
May 21, 1997
Report from the Fund Managers
David K. Thomas
Robert Swift
Like a steady rain turning to a torrential storm, bad went to worse for
the returns of many Asia and Pacific Rim markets this year. The Morgan
Stanley Capital International (MSCI) Pacific Index fell 16.37% in the
six months ended March 31, 1997. In contrast to the index, Putnam Asia
Pacific Growth Fund demonstrated some of the virtues of active portfolio
management, as management decisions helped mitigate the negative impact
of some of these markets on the fund's performance. For the period
representing the first half of the fund's 1997 fiscal year, its class A
shares only declined -2.38% at net asset value and -7.99% at public
offering price. For more performance information, please turn to pages 9
and 10.
* JAPANESE MARKET CONTINUES UNDERPERFORMANCE; DIFFICULTIES ARISE IN
SOUTHEAST ASIA
The effects of Japan's well-documented macroeconomic problems continued
to hurt its stock market as the Nikkei 225 Index was off by 21% from its
12-month high at the end of the period. The anemic pace of the Japanese
economic recovery, coupled with concerns about the progress of economic
reform, weighed heavily on stocks in the construction and finance
sectors. The earnings of export-oriented companies benefited as the yen
continued to fall against the U.S. dollar. Although Japan remained the
fund's largest single country allocation, the portfolio is still
relatively underweighted in Japanese equities in comparison with the
MSCI Pacific Index. This underweighting -- along with a significant
currency hedge against the yen -- helped keep the fund's return ahead of
the index.
As the first quarter of 1997 began to unfold, other Pacific Rim markets
began to decline under the influence of factors such as overheated
property markets, the fear of rising U.S. interest rates, and a host of
economic and political uncertainties throughout the region. For example,
after riding the surging real estate sector to a strong finish in 1996,
the Hong Kong market saw the same sector become its undoing early in
1997. As the island's residential property market peaked and concerns
about higher interest rates crept in, we began to reduce the fund's
substantial exposure there.
The emerging markets were mixed and volatile during the period. Our
strategy in these markets has been to remain highly selective, seeking
to take advantage of what we see as promising opportunities while
generally keeping the country allocations low to soften the impact of
these markets' characteristic volatility. Consequently the fund has
relatively small stakes in countries such as Thailand, India, and
Indonesia. On the other hand, some markets such as Taiwan -- which saw
signs of economic recovery, strong liquidity, and a rare trade surplus
for this region -- held up well along with Malaysia, which experienced
some of the most robust corporate profit growth in the region. The
fund's allocation in Malaysia was the largest among the emerging
markets.
* JAPAN: A TWO-TIERED APPROACH
Although economic reform in Japan will be positive for the country's
economy over time, its piecemeal implementation has caused investors to
focus on the short-term costs to heavily regulated groups, such as
banks, securities firms, and basic industries, rather than on the long-
term benefits to the economy as a whole. Additionally a large budget
deficit has curbed the government's ability to support basic industries
and banks as it has done in the past. As a result, we have considerably
reduced or eliminated the fund's exposure to these sectors.
[GRAPHIC OMITTED: horizontal bar chart INTERNATIONAL SECTOR:
TOP 5 COUNTRY ALLOCATIONS*]
INTERNATIONAL SECTOR:
TOP 5 COUNTRY ALLOCATIONS*
Japan 32.9%
Hong Kong 17.7%
Malaysia 11.3%
Australia 8.0%
Singapore 7.0%
Footnote reads:
* As of 3/31/97. Holdings will vary over time.
In light of the fiscal and economic concerns surrounding Japan, we've
found it best to take a two-tiered approach. We've divided prospective
investment opportunities in Japan between large firms with multinational
operations -- those that can benefit from a weak yen -- and purely
domestic companies. During the period, the companies with the strongest
overseas businesses benefited from the weakening yen and showed the best
profit growth and share performance. Through careful stock selection, we
found some solid companies that fall into this area, including Canon,
NEC, Toyota, and TDK. While these holdings, along with others discussed
in this report, were viewed favorably at the end of the period, all are
subject to review and adjustment in accordance with the fund's
investment strategy and may vary in the future.
* REASSESSING HONG KONG; FINDING GEMS IN OTHER MARKETS
Because of the recent reversal of fortune in the Hong Kong property
sector, shareholders may notice the absence of long-time holdings such
as Sun Hung Kai Properties from the portfolio. While there is no doubt
that the downturn in this sector dampened the fund's performance over
the short term, we believe that our resulting shifts in the portfolio
will have some long-term benefits.
For example, a substantial portion of the fund's real estate position
was reallocated into the utility sector of the Hong Kong market. During
the period, this sector became a relatively safe haven and significantly
outperformed the broader market. One of the fund's utility holdings,
Hong Kong Electric Holdings, was a particular standout.
We also found value in the Australian market. While much of this market
has moved down in step with Wall Street, several segments performed
relatively well. Bank stocks have benefited from a government study that
encourages mergers and increased efficiency. The housing market also
showed signs of life after a long slump. This development has a lot to
do with the attractiveness of one of the fund's newer holdings, Pioneer
International, which is beginning to live up to the potential we saw
when we bought it.
Singapore, your fund's fifth largest country weighting, was down for
much of the period. However, we were able to take advantage of some
important individual situations. The overall market fell because of
weakness in exporting companies -- particularly in the semiconductor
industry. Flying in the face of this development was Venture
Manufacturing, an electronics company that recorded strong profits last
year against losses in the rest of the industry.
TOP 10 HOLDINGS
Sony Corp. (Japan)
Electronics
TDK Corp. (Japan)
Consumer products
Canon, Inc. (Japan)
Office automation and equipment
Sankyo Co., Ltd. (Japan)
Pharmaceuticals
Keyence Corp. (Japan)
Electronic measuring instrument
Toyota Motor Corp. (Japan)
Automotive
NEC Corp. (Japan)
Conglomerate
HBSC Holdings (Hong Kong)
Financial services
AFLAC, Inc. (U.S.)
Insurance sales
Hirose Electric Co., Ltd. (Japan)
Electronic connectors
Footnote reads:
These holdings represent 20% of the fund's assets as of 3/31/97.
Portfolio holdings will vary over time.
* STRATEGY: MAINTAINING CURRENT COURSE
We believe the Japanese yen will remain weak against the dollar. So long
as this is the case, the blue-chip exporters will probably continue to
show the highest growth in the Japanese market. In contrast, we don't
see compelling evidence that suggests increasing the fund's weighting in
domestic companies. Currently many of these companies have inadequate
returns on capital and are not intent on enhancing shareholder value.
Looking ahead, we see the biggest wild card in many of the Pacific Rim
markets as being the direction of U.S. interest rates. Many Southeast
Asian currencies are linked to the dollar so any rise in U.S. rates is
closely followed in many of the region's economies. The size and scope
of the banking and property sectors in Hong Kong and other Southeast
Asian markets are concerns, although an uptick in exports could benefit
many of the markets that have dropped in 1997 so far.
Despite the difficult stretch many Asia Pacific markets have
encountered, we believe the fund is well positioned to take advantage of
any future opportunities. Additionally, we continue to believe that the
Pacific Rim offers long-term investors potential for growth above and
beyond the established Western economies.
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described holdings
were viewed favorably as of 3/31/97, there is no guarantee the fund will
continue to hold these securities in the future. Funds investing in a
single sector may be subject to more volatility than funds investing in
a diverse group of sectors.
International investing involves risks including political developments,
economic instability, and currency fluctuations.
Performance summary
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 common stocks and other
securities of companies located in Asia and in the Pacific Rim.
TOTAL RETURN FOR PERIODS ENDED 3/31/97
(most recent calendar quarter)
Class A Class B Class M
(inception date) (2/20/91) (6/1/93) (2/1/95)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------
6 months -2.38% -7.99% -2.80% -7.51% -2.65% -6.04%
- ------------------------------------------------------------------------
1 year -3.37 -8.93 -4.09 -8.74 -3.85% -7.24
- ------------------------------------------------------------------------
5 years 82.70 72.24 -- -- -- --
Annual average 12.81 11.49 -- -- -- --
- ------------------------------------------------------------------------
Life of class 68.22 58.61 29.47 26.47 11.08 7.19
Annual average 8.89 7.84 6.98 6.32 4.98 3.27
- ------------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. They do not take into
account any adjustment for taxes payable on reinvested distributions.
Investment returns and principal value will fluctuate so that an
investor's shares, when sold, may be worth more or less than their
original cost. POP assumes 5.75% maximum sales charge for class A shares
and 3.50% for class M shares. CDSC for class B shares assumes the
applicable sales charge, with the maximum being 5%.
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 3/31/97
MSCI Pacific Consumer
Index Price Index
- ------------------------------------------------------------------------
6 months -16.37% 1.39%
- ------------------------------------------------------------------------
1 year -19.33 2.76
- ------------------------------------------------------------------------
5 years 30.71 14.86
Annual average 5.50 2.81
- ------------------------------------------------------------------------
Life of class A 1.60 18.69
Annual average 0.26 2.84
- ------------------------------------------------------------------------
Life of class B -7.41 10.96
Annual average -1.99 2.75
- ------------------------------------------------------------------------
Life of class M -9.66 6.45
Annual average -4.59 2.94
- ------------------------------------------------------------------------
PRICE AND DISTRIBUTION INFORMATION
6 months ended 3/31/97
Class A Class B Class M
- ------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------
Income $0.512 $0.419 $0.468
- ------------------------------------------------------------------------
Capital gains -- -- --
- ------------------------------------------------------------------------
Total $0.512 $0.419 $0.468
- ------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------
09/30/96 13.63 14.46 13.41 13.54 14.03
- ------------------------------------------------------------------------
03/31/97 12.81 13.59 12.63 12.73 13.19
- ------------------------------------------------------------------------
TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested
all distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the maximum 5.75% sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time
of the redemption of class B shares and assumes redemption at the end of
the period. Your fund's CDSC declines from a 5% maximum during the first
year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies.
COMPARATIVE BENCHMARKS
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. It is not possible to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Portfolio of investments owned
March 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (86.8%) *
NUMBER OF SHARES VALUE
Australia (8.0%)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
451,000 Commonwealth Bank of Australia $ 4,516,246
150,000 Commonwealth Bank of Australia (Installment Shares) 991,960
380,000 CRA Ltd. 5,628,805
1,300,000 CSL Ltd. 6,330,324
5,454,300 Goodman Fielder Ltd. 7,068,282
1,968,100 Pioneer International Ltd. 6,790,461
1,451,250 QBE Insurance Group Ltd. 7,488,563
1,240,300 Westpac Banking Corp. + 7,208,574
------------
46,023,215
Hong Kong (17.7%)
- -------------------------------------------------------------------------------------------------------
6,509,000 Amoy Properties Ltd. 6,888,186
810,000 Cheung Kong Holdings Ltd. 7,134,515
650,000 Dao Heng Bank Group Ltd. 2,969,569
5,602,367 First Pacific Co. 7,121,714
665,000 Great Eagle Holdings Ltd. 2,197,042
1,625,800 Guoco Group Ltd. 8,036,050
460,000 Hang Seng Bank Ltd. 4,749,245
5,070,000 HKR International Ltd. 6,706,695
4,320,000 Hong Kong and China Gas Co. Ltd. 8,111,917
1,392,000 Hong Kong Electric Holdings, Ltd. 4,913,300
3,148,000 Hong Kong Land Holdings Ltd. 7,303,360
452,326 HSBC Holdings PLC 10,507,534
1,020,000 Hutchison Whampoa, Ltd. 7,667,837
1,900,000 New World Infrastructure Ltd. + 5,443,564
3,250,000 South China Morning Post Ltd. 2,768,242
2,787,000 Varitronix International Ltd. 4,244,199
1,370,000 Wharf (Holdings) Ltd. 5,242,302
------------
102,005,271
Indonesia (2.2%)
- -------------------------------------------------------------------------------------------------------
830,000 PT Astra International (Registered) 2,697,522
556,925 Bank Bali 1,340,112
6,732,848 PT Bank International Indonesia 5,119,811
784,000 PT Ramayana Lestari Sentosa + 1,829,348
335,000 Sampoerna Industries 1,570,325
------------
12,557,118
Japan (32.9%)
- -------------------------------------------------------------------------------------------------------
450,000 Bridgestone Corp. 8,445,240
600,000 Canon, Inc. 12,862,003
530,000 Dai Nippon Printing Co. 8,874,782
1,200,000 Fuji Heavy Industries Ltd. 5,387,480
265,000 Fuji Photo Film Co. 8,724,725
179,500 Hirose Electric Co., Ltd. 9,859,291
195,000 Ito-Yokado Co., Ltd. 8,675,785
550,000 KAO Corp. 6,006,313
99,000 Keyence Corp. 11,291,868
290,000 Kurita Water Ltd. 5,630,160
980,000 NEC Corp. 11,098,533
900 Nippon Telegraph and Telephone Corp. 6,341,210
337,000 Omron Corp. 5,997,414
5,000 Onward Kashiyama Co., Ltd. 57,839
120,000 Rohm Co. Ltd. 8,852,941
420,000 Sankyo Co., Ltd. 11,585,510
209,000 Santen Pharmaceutical Co., Ltd. 3,618,025
510,000 Shin-Etsu Chemical Co. 9,695,038
190,000 Sony Corp. 13,294,781
192,000 TDK Corp. 13,201,754
264,000 Tokyo Electron Ltd. 8,755,869
444,000 Toyota Motor Corp. 11,241,876
------------
189,498,437
Malaysia (11.3%)
- -------------------------------------------------------------------------------------------------------
940,000 AMMB Holdings Berhad 7,811,844
940,000 AMMB Holdings Berhad Rights expiration date 12/31/97 + 91,012
940,000 AMMB Holdings Berhad Rights expiration date 12/31/97 + 121,349
2,570,000 Bandar Raya Developments Berhad 5,059,545
360,000 Carlsberg Brewery of Malaysia 3,427,465
650,000 Edaran Otomobil Nasional Berhad 6,555,591
1,439,999 Gamuda Berhad 5,460,703
710,000 Malayan Banking Berhad 8,091,617
640,000 Maruichi Malaysia 2,349,524
3,400,000 Multi-Purpose Holdings Berhad 7,132,483
1,200,000 Perusahaan Otomobil Nasional Berhad 7,600,452
1,980,000 Sungei Way Holdings Berhad 5,431,660
1,120,000 YTL Corp. Berhad 5,828,627
------------
64,961,872
Philippines (2.5%)
- -------------------------------------------------------------------------------------------------------
4,800,000 International Container Terminal Services, Inc. + 2,870,159
210,000 Metropolitan Bank & Trust Co. 5,461,275
400,000 Philippine Commercial International Bank 5,922,551
------------
14,253,985
Singapore (7.0%)
- -------------------------------------------------------------------------------------------------------
530,000 City Developments Ltd. 4,698,061
1,859,000 Courts (Singapore) Ltd. 2,330,187
732,000 Cycle & Carriage Ltd. 7,401,108
1,500,000 DBS Land Ltd. 5,131,579
560,000 Development Bank of Singapore 6,515,235
1,400,000 Overseas Union Bank Ltd. 9,646,814
1,893,500 Venture Manufacturing Ltd. 4,641,960
------------
40,364,944
South Korea (1.2%)
- -------------------------------------------------------------------------------------------------------
311,000 Cho Hung Bank Co., Ltd. 1,602,014
115,000 Samsung Electronics 144A GDR 5,175,000
------------
6,777,014
Thailand (1.4%)
- -------------------------------------------------------------------------------------------------------
245,000 Bangkok Bank Public Co., Ltd. 2,379,191
2,050,100 Industrial Finance Corp. 5,451,134
------------
7,830,325
United States (2.6%)
- -------------------------------------------------------------------------------------------------------
270,000 AFLAC Inc. 10,125,000
1,370,000 Clipsal Industries Ltd. 5,069,000
------------
15,194,000
------------
Total Common Stocks (cost $477,833,736) $499,466,181
INVESTMENT COMPANIES (2.2%) *
NUMBER OF SHARES VALUE
- -------------------------------------------------------------------------------------------------------
200,000 ROC Taiwan Fund, Inc. $ 2,375,000
55,000 Taipei Fund Units + 5,843,750
190,000 Taiwan Fund, Inc. 4,678,750
------------
Total Investment Companies (cost $11,987,982) $ 12,897,500
CONVERTIBLE BONDS AND NOTES (1.2%) *(cost $7,822,725)
PRINCIPAL AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
$7,400,000 Bangkok Bank Public Co. 144A cv. sub. notes 3 1/4s,
2004 (Thailand) $ 6,882,000
WARRANTS (0.1%) *+
NUMBER OF WARRANTS EXPIRATION DATE VALUE
- -------------------------------------------------------------------------------------------------------
420,744 Bank International Indonesia 1/17/00 $ 149,015
186,666 Gamuda 12/28/01 262,814
------------
Total Warrants (cost $43,763) $ 411,829
SHORT-TERM INVESTMENTS (7.7%) *(cost $44,326,879)
PRINCIPAL AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
$44,319,000 Interest in $803,250,000 joint repurchase agreement
dated March 31, 1997, with UBS Securities due
April 1, 1997, with respect to various U.S. Treasury
obligations -- maturity value of $44,326,879 for an
effective yield of 6.40% $ 44,326,879
- -------------------------------------------------------------------------------------------------------
Total Investments (cost $542,015,085) *** $563,984,389
- -------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $575,507,702.
*** The aggregate identified cost on a tax basis is $545,618,548,
resulting in gross unrealized appreciation and depreciation of
$43,768,375 and $25,402,534, respectively, or net unrealized
appreciation of $18,365,841.
+ Non-income-producing security.
GDR after the name of a foreign holding stands for Global Depository
Receipts, representing ownership of foreign securities on deposit with a
domestic custodian bank.
144A after the name of a security represents those exempt from registration
under Rule 144A of the Securities Act of 1933. These securities may be resold
in transactions exempt from registration normally to qualified insitutional
buyers.
Forward Currency Contracts to Sell at March 31, 1997 (Unaudited)
(aggregate face value $73,862,263)
Market Aggregate Face Delivery Unrealized
Value Value Date Appreciation
- -------------------------------------------------------------------------
Japanese Yen $71,959,237 $73,862,263 4/30/97 $1,903,026
- -------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
March 31,1997 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $542,015,085) (Note 1) $563,984,389
- ---------------------------------------------------------------------------------------------------
Cash 889,894
- ---------------------------------------------------------------------------------------------------
Foreign currency (cost $60,509) 60,342
- ---------------------------------------------------------------------------------------------------
Dividends, interest and other receivables 1,249,327
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 12,325,516
- ---------------------------------------------------------------------------------------------------
Receivable for open forward currency contracts 1,903,026
- ---------------------------------------------------------------------------------------------------
Total assets 580,412,494
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 1,222,252
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,673,888
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,035,189
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 353,533
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 12,520
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,215
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 379,109
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 226,086
- ---------------------------------------------------------------------------------------------------
Total liabilities 4,904,792
- ---------------------------------------------------------------------------------------------------
Net assets $575,507,702
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $591,842,835
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (4,863,746)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (Note 1) (35,340,819)
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 23,869,432
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $575,507,702
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($366,845,833 divided by 28,637,067 shares) $12.81
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $12.81)* $13.59
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($199,339,186 divided by 15,776,989 shares)** $12.63
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($9,322,683 divided by 732,264 shares) $12.73
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $12.73)* $13.19
- ---------------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales
the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended March 31,1997 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $241,175) $ 3,235,116
- --------------------------------------------------------------------------------------------------
Interest 689,020
- --------------------------------------------------------------------------------------------------
Total investment income 3,924,136
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,952,470
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 910,418
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 23,316
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 4,338
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 325,678
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 1,093,391
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 36,531
- --------------------------------------------------------------------------------------------------
Reports to shareholders 136,509
- --------------------------------------------------------------------------------------------------
Registration fees 39,009
- --------------------------------------------------------------------------------------------------
Auditing 25,623
- --------------------------------------------------------------------------------------------------
Legal 4,481
- --------------------------------------------------------------------------------------------------
Postage 165,906
- --------------------------------------------------------------------------------------------------
Other 84,073
- --------------------------------------------------------------------------------------------------
Total expenses 4,801,743
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (175,488)
- --------------------------------------------------------------------------------------------------
Net expenses 4,626,255
- --------------------------------------------------------------------------------------------------
Net investment loss (702,119)
- --------------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (13,677,629)
- --------------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) 4,508,180
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the period 453,441
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (4,067,053)
- --------------------------------------------------------------------------------------------------
Net loss on investments (12,783,061)
- --------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(13,485,180)
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
March 31 September 30
1997* 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (702,119) $ (667,997)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions (9,169,449) 10,352,201
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments and assets and liabilities in foreign currencies (3,613,612) 8,054,571
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (13,485,180) 17,738,775
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A (7,942,019) (6,908,193)
- ----------------------------------------------------------------------------------------------------------------------
Class B (6,850,229) (5,685,612)
- ----------------------------------------------------------------------------------------------------------------------
Class M (337,929) (125,143)
- ----------------------------------------------------------------------------------------------------------------------
In excess of realized gains
Class A -- (78,334)
- ----------------------------------------------------------------------------------------------------------------------
Class B -- (73,742)
- ----------------------------------------------------------------------------------------------------------------------
Class M -- (1,408)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 146,430,908 146,709,587
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 117,815,551 151,575,930
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 457,692,151 306,116,221
- ----------------------------------------------------------------------------------------------------------------------
End of period (including distributions in excess of net
investment income and undistributed net investment
income of $4,863,746 and $10,968,550, respectively) 575,507,702 457,692,151
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share March 31
operating performance (Unaudited) Year ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.63 $13.58 $14.64 $11.55 $8.17 $8.08
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .01 (d) .03 (d) .02 .04 (.03) (.01)(a)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.32) .63 (.63) 3.09 3.41 .10
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.31) .66 (.61) 3.13 3.38 .09
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.51) (.60) (.04) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- (.41) (.04) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- (.01) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.51) (.61) (.45) (.04) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.81 $13.63 $13.58 $14.64 $11.55 $8.17
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(b) (2.38)* 5.02 (4.14) 27.15 41.37 1.11
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $366,846 $223,307 $158,773 $149,486 $24,150 $2,548
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .81 * 1.54 1.55 1.53 2.03 1.88 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .05 * .20 .14 (.01) (.54) (.06)(a)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 49.20 * 72.68 91.13 65.02 79.78 95.67
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (e) $.0169 $.0229
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Reflects an expense limitation in effect during the period. As a result of such
limitation, expenses of the fund for the period ended September 30, 1992,
reflects a per share reduction of approximately $0.01.
(b) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods ended September 30,
1995, and thereafter includes amounts paid through expense offset arrangements.
Prior period ratios exclude these amounts (Note 2).
(d) Per share net investment income (loss) has been determined on the basis of the
weighted average number of shares outstanding during the period.
(e) Average commission rate paid is required for fiscal periods beginning on or after
September 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share March 31 June 1, 1993+
operating performance (Unaudited) Year ended September 30 to Sept. 30
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.41 $13.37 $14.53 $11.54 $10.86
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.05) (.07)(d) (.07) (.03) (.02)(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.31) .63 (.64) 3.06 .70
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.36) .56 (.71) 3.03 .68
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.42) (.51) (.04) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- (.41) (.04) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- (.01) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.42) (.52) (.45) (.04) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.63 $13.41 $13.37 $14.53 $11.54
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(b) (2.80)* 4.33 (4.88) 26.31 6.26 *
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $199,339 $225,241 $144,514 $110,951 $9,901
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.18 * 2.30 2.31 2.27 .86 *
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.38)* (.55) (.62) (.73) (.25)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 49.20 * 72.68 91.13 65.02 79.78
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (e) $.0169 $.0229
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Reflects an expense limitation in effect during the period. As a result of such
limitation, expenses of the fund for the period ended September 30, 1992,
reflects a per share reduction of approximately $0.01.
(b) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods ended September 30,
1995, and thereafter includes amounts paid through expense offset arrangements.
Prior period ratios exclude these amounts (Note 2).
(d) Per share net investment income (loss) has been determined on the basis of the
weighted average number of shares outstanding during the period.
(e) Average commission rate paid is required for fiscal periods beginning on or after
September 1, 1995.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share March 31 Year ended Feb. 1, 1995+
operating performance (Unaudited) September 30 to Sept. 30
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $13.54 $13.53 $12.41
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.04) (.03)(d) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.30) .63 1.13
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.34) .60 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.47) (.58) --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.47) (.59) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.73 $13.54 $13.53
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(b) (2.65)* 4.65 9.03 *
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $9,323 $9,144 $2,829
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.06 * 2.06 2.09 *
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.25)* (.24) (.45)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 49.20 * 72.68 91.13
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (e) $.0169 $.0229
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Reflects an expense limitation in effect during the period. As a result of such
limitation, expenses of the fund for the period ended September 30, 1992,
reflects a per share reduction of approximately $0.01.
(b) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(c) The ratio of expenses to average net assets for the periods ended September 30,
1995, and thereafter includes amounts paid through expense offset arrangements.
Prior period ratios exclude these amounts (Note 2).
(d) Per share net investment income (loss) has been determined on the basis of the
weighted average number of shares outstanding during the period.
(e) Average commission rate paid is required for fiscal periods beginning on or after
September 1, 1995.
</TABLE>
Notes to financial statements
March 31, 1997 (Unaudited)
Note 1
Significant accounting policies
Putnam Asia Pacific Growth Fund (The "fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The fund seeks capital appreciation by
investing primarily in common stocks and other securities of companies
located in Asia and in the Pacific Basin.
The fund offers class A, class B and class M shares. Class A shares are
sold with a maximum front-end sales charge of 5.75%. Class B shares,
which convert to class A shares after approximately eight years, do not
pay a front-end sales charge, but pay a higher ongoing distribution fee
than class A shares, and are subject to a contingent deferred sales
charge, if those shares are redeemed within six years of purchase. Class
M shares are sold with a maximum front-end sales charge of 3.50% and pay
an ongoing distribution fee that is lower than class B shares and higher
than class A shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
votes as a class only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by the
Trustees. Shares of each class would receive their pro-rata share of the
net assets of the fund, if the fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The preparation of financial statements is in conformity
with generally accepted accounting principles and requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities. Actual results could differ from those
estimates.
A) Security valuation Investments for which market quotations are
readily available are stated at market value, which is determined using
the last reported sale price on the principal market in which the
securities are traded, or, if no sales are reported -- as in the case of
some securities traded over-the-counter -- the last reported bid price.
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
forward currency contracts.) Securities quoted in foreign currencies are
translated into U.S. dollars at the current exchange rate.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested
cash balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam 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.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the
market value of which at the time of purchase is required to be in an
amount at least equal to the resale price, including accrued interest.
Putnam Management is responsible for determining that the value of these
underlying securities is at all times at least equal to the resale
price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy
or sell is executed). Interest income is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities are recorded as soon as the fund is
informed of the ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The
fund does not isolate that portion of realized or unrealized gains or
losses resulting from changes in the foreign exchange rate on
investments from fluctuations arising from changes in the market prices
of the securities. Such fluctuations are included with the net realized
and unrealized gain or loss on investments. Net realized gains and
losses on foreign currency transactions represent net exchange gains or
losses on closed forward currency contracts, disposition of foreign
currencies and the difference between the amount of investment income
and foreign withholding taxes recorded on the fund's books and the U.S.
dollar equivalent amounts actually received or paid. Net unrealized
appreciation (depreciation) ofassets and liabilities in foreign
currencies arise from changes in the value of open forward currency
contracts and assets and liabilities other than investments at the
period end, resulting from changes in the exchange rate.
F) Forward currency contracts The fund may engage in forward currency
contracts, which are agreements between two parties to buy and sell
currencies at a set price on a future date, to protect against a decline
in value relative to the U.S. dollar of the currencies in which its
portfolio securities are denominated or quoted (or an increase in the
value of a currency in which securities a fund intends to buy are
denominated, when a fund holds cash reserves and short-term
investments). The U.S. dollar value of forward currency contracts is
determined using forward currency exchange rates supplied by a quotation
service. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is "marked to market" daily and
the change in market value is recorded as an unrealized gain or loss.
When the contract is closed, the fund records a realized gain or loss
equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed. The fund could be
exposed to risk if the value of the currency changes unfavorably, if the
counterparties to the contracts are unable to meet the terms of their
contracts or if the fund is unable to enter into a closing position.
G) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. It is also the intention of the fund to distribute
an amount sufficient to avoid imposition of any excise tax under Section
4982 of the Internal Revenue Code of 1986. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held and for excise tax on income and capital
gains.
At September 30, 1996, the fund had a capital loss carryover of
approximately $21,694,000 available to offset future net capital gain,
if any, which will expire on September 30, 2004.
H) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid at least annually. The amount and character of income and gains
to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles. Reclassifications are made to the fund's capital accounts to
reflect income and gains available for distribution (or available
capital loss carryovers) under income tax regulations.
Note 2
Management fee, administrative services and other transactions
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net assets of
the fund. Such fee is based on the following annual rates: 0.80% 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 the next $5
billion, 0.575% of the next $5 billion, 0.555% of the next $5 billion,
0.54% of the next $5 billion, and 0.53% of any excess thereafter.
Prior to January 20, 1997, Putnam Management was paid at a rate of 0.60%
of any amount over $1.5 billion.
The fund reimburses Putnam Management for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
For the six months ended March 31, 1997, fund expenses were reduced by
$175,488 under expense offset arrangements with PFTC and brokerage
service arrangements. Investor servicing and custodian fees reported in
the Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered
into such arrangements.
Trustees of the fund receive an annual Trustees fee of $1,290 and an
additional fee for each Trustee's meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of
the Trustees receive additional fees for attendance at certain committee
meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Plan") which
allows the Trustees to defer the receipt of all or a portion of Trustees
Fees payable on or after July 1, 1995. The deferred fees remain in the
fund and are invested in certain Putnam funds until distribution in
accordance with the Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and
meeting fees for the three years preceding retirement. Pension expense
for the fund is included in Compensation of trustees in the Statement of
operations. Accrued pension liability is included in Payable for
compensation of Trustees in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B 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 it in distributing shares
of the fund. The Plans provide for payments by the fund to Putnam Mutual
Funds Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the
average net assets attributable to class A, class B and class M shares,
respectively. The Trustees have approved payment by the fund at an
annual rate of 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 six months ended March 31, 1997, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $88,792 and $5,267
from the sale of class A and class M shares, respectively, and $257,886
in contingent deferred sales charges from redemptions of class B shares.
A deferred sales charge of up to 1% is assessed on certain redemptions
of class A shares. For the six months ended March 31, 1997, Putnam
Mutual Funds Corp., acting as underwriter received $1,193 on class A
redemptions.
Note 3
Purchase and sales of securities
During the six months ended March 31, 1997, purchases and sales of
investment securities other than short-term investments aggregated
$325,997,383 and $227,422,060, respectively. There were no purchases and
sales of U.S. government obligations. 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, 1997, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
March 31, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 46,816,503 626,618,855
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 519,996 6,905,558
- ------------------------------------------------------------
47,336,499 633,524,413
Shares
repurchased (35,079,919) (473,354,351)
- ------------------------------------------------------------
Net increase 12,256,580 $160,170,062
- ------------------------------------------------------------
Year ended
September 30, 1996
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 38,389,618 $519,121,073
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 492,461 6,421,692
- ------------------------------------------------------------
38,882,079 525,542,765
Shares
repurchased (34,194,252) (463,687,598)
- ------------------------------------------------------------
Net increase 4,687,827 $61,855,167
- ------------------------------------------------------------
Six months ended
March 31, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 20,923,124 $278,844,820
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 449,125 5,892,512
- ------------------------------------------------------------
21,372,249 284,737,332
Shares
repurchased (22,395,732) (299,236,868)
- ------------------------------------------------------------
Net decrease (1,023,483) (14,499,536)
- ------------------------------------------------------------
Year ended
September 30, 1996
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 39,326,633 $525,334,358
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 391,200 5,046,485
- ------------------------------------------------------------
39,717,833 530,380,843
Shares
repurchased (33,722,721) (451,870,914)
- ------------------------------------------------------------
Net increase 5,995,112 $78,509,929
- ------------------------------------------------------------
Six months ended
March 31, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 346,698 $4,634,636
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 21,840 288,734
- ------------------------------------------------------------
368,538 4,923,370
Shares
repurchased (311,545) (4,162,988)
- ------------------------------------------------------------
Net increase 56,993 $760,382
- ------------------------------------------------------------
Year ended
September 30, 1996
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 1,089,513 $14,649,740
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 7,884 102,417
- ------------------------------------------------------------
1,097,397 14,752,157
Shares
repurchased (631,171) (8,407,666)
- ------------------------------------------------------------
Net increase 466,226 $6,344,491
- ------------------------------------------------------------
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
Ronald J. Jackson
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
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Anthony V. Regan
Vice President
David K. Thomas
Vice President and Fund Manager
Robert Swift
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O.Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam 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. You can also learn more at Putnam Investments'
website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution, are not insured by the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board
or any other agency, and involve risk, including the possible loss of
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
32899-844/193/470 5/97
