Putnam
Asia Pacific
Growth
Fund
SEMIANNUAL REPORT
March 31, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* Putnam Asia Pacific Growth Fund's class A shares have provided strong
performance over the fund's existence when compared to its peers. For the
one and five years ended March 31, 1998, the fund ranked 7 out of 44 and
3 out of 16 Pacific region funds, respectively, according to Lipper
Analytical Services.*
* Singapore and Hong Kong ranked second and third behind the United
States in economic competitiveness. Forty-six countries were ranked based
on 259 criteria measuring business environment, financial system, and
technology.
-- International Institute for Management Development,
World Competitiveness Yearbook, April 1998
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
12 Portfolio holdings
15 Financial statements
* Lipper is an industry research firm whose rankings are based on total
return performance, vary over time, and do not reflect the effects of
sales charges. Performance of other share classes will vary. Past
performance is not indicative of future results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
One of the noteworthy attributes of the current worldwide market environment
is its resilience in the face of adversity. Last year's Asian currency and
debt crisis is the most recent and perhaps most dramatic example. Quick action
by the International Monetary Fund in arranging loans and taking other
remedial steps prevented a major calamity.
The aftereffects of the crisis are still being felt, of course, and will
continue to be felt for some months. But in the main, the world's equity
markets have regained their stability. It is comforting to see that in this
increasingly interdependent world economy, mechanisms are in place for serving
the common good.
How these events affected Putnam Asia Pacific Growth Fund during the first
half of its fiscal year and will continue to influence it in the months ahead
is the underlying theme of the following report from your fund's management
team.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
May 20, 1998
Report from the Fund Managers
David K. Thomas
Paul C. Warren
By now, the Asian financial crisis of 1997, which saw the rapid deterioration
of stocks and currencies, has become part of financial market history.
Governments and companies are dealing with residual effects of the crisis that
may take some time to work out. The first six months of your fund's 1998
fiscal year encompassed both the final months of the crisis and the beginning
of what will undoubtedly be a long recovery period. As the fiscal year began,
we worked to minimize the fund's losses; more recently, we have begun to
re-position assets and reevaluate companies as the Asian markets and
currencies have recovered from their lows.
For the past six months, Putnam Asia Pacific Fund had a total return of
- -17.18% at net asset value (-21.95 at public offering price). At the same
time, the Morgan Stanley Capital International Pacific Index returned
- -18.11%. For performance of other share classes and over longer periods,
please turn to page 9.
* FALLOUT FROM ASIAN CRISIS DOMINATES FIRST HALF OF PERIOD
In the immediate aftermath of the Asian crisis, interest rates rose as
countries rushed to defend the value of their currencies. Emerging markets
around the world as well as developed financial centers such as Hong Kong were
affected. In this environment, we managed the fund defensively. We avoided the
Asian emerging markets as much as possible, redeploying assets into markets
that were left relatively unscathed such as Australia and New Zealand. We also
reduced the fund's exposure to interest-rate sensitive industries such as the
Hong Kong property and banking sectors.
In early 1998, however, the tide turned. South Korea's creditors rescheduled
the country's debt payments, avoiding a large-scale default. Additionally
investors began to feel more optimistic about the newly elected president Kim
Dae-jung's willingness to accept reforms required by the International
Monetary Fund.
Shortly thereafter, the Japanese government prodded the markets into a
short-lived rally by announcing yet another stimulus package, which promised
to let Japanese businesses revalue land holdings and revise laws to facilitate
corporate share buybacks. Other Asian markets followed Japan's lead as stocks
and the yen briefly rose in value. However, the rally in Japan was not a
positive event for your fund, as investors shunned the higher-quality
export-oriented Japanese companies we prefer in favor of domestic basic
industries we consider bad investments.
* GLOBAL BRAND-NAME FOCUS IN JAPAN SERVES FUND WELL
In March, as investors began to doubt the Japanese government's commitment to
the difficult measures necessary to bring the economy out of a seven-year
recession, Japan's stock market eased and the yen weakened. Fortunately, the
fund was positioned to benefit from this development. For some time, we have
favored the types of companies that could benefit from the weak yen:
blue-chip, export-oriented companies. We continue to favor many of the
multinationals with global brand recognition such as Sony, Tokyo Electron,
Canon, Fuji Photo, and Honda. For these companies, the low level of domestic
demand has had little effect on profitability. While these holdings, along
with others discussed in this report, were viewed favorably at the end of the
fiscal period, all are subject to review and adjustment in accordance with the
fund's investment strategy and may vary in the future.
[GRAPHIC OMITTED: horizontal bar chart COUNTRY ALLOCATIONS]
COUNTRY ALLOCATIONS*
Japan 30.4%
Hong Kong 17.9%
Australia 11.2%
Singapore 7.9%
United States 4.3%
Footnote reads:
*Based on net assets as of 3/31/98. Holdings will vary over time.
We also sought firms that could exploit what pockets of demand still exist in
Japan. For example, we continue to favor U.S. insurance company AFLAC. The
company, which garners the bulk of its business from selling insurance to the
Japanese, has successfully tapped a growing demand for financial services.
* SIGNS OF IMPROVEMENT SEEN IN HONG KONG, SINGAPORE, SOUTH KOREA
With the improved sentiment in the Asian markets in the past few months, we
began to move back into Hong Kong and to add to our positions in Singapore. In
Hong Kong, interest rates began to fall as investors took heart from the
government's determination to keep the Hong Kong dollar closely pegged to the
U.S. dollar. We gained exposure to the Hong Kong banking sector through HSBC
Holdings, which is listed on both the U.K. and Hong Kong stock exchanges, but
is based in the United Kingdom. We also began to add to our holdings in the
property sector -- in companies such as Hutchison Whampoa -- after that
group's hard correction when interest rates rose.
Singapore bank stocks represented another area of opportunity. We estimated
that the banks we chose had about a 10% to 15% loan exposure to the rest of
Southeast Asia but that their domestic loan books were in good shape and their
balance sheets are the strongest in the region. We believe that in time,
Singapore banks will once again be able to produce strong earnings growth.
Although South Korea has a way to go in dealing with its debt and the
inefficiencies in its financial system, we believe the bounce back in the
market and the commitment of the new government offer an opportunity for
investors to buy into the world's 11th largest economy. We've purchased
American depository receipts in some of South Korea's blue-chip growth
companies such as Korea Electric Power Company and Samsung.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
AFLAC, Inc. (United States)
Insurance and finance
Sony Corp. (Japan)
Electronics and electrical equipment
HSBC Holdings PLC (United Kingdom)
Insurance and finance
Telecom Corp. of New Zealand Ltd. (New Zealand)
Telecommunications
Bridgestone Corp. (Japan)
Automotive
Overseas Union Bank Ltd. (Singapore)
Insurance and finance
Sankyo Co., Ltd. (Japan)
Pharmaceuticals
Dai Nippon Printing Co. (Japan)
Printing
Westpac Banking Ltd. (Australia)
Insurance and finance
CSL Ltd. (Australia)
Medical supplies and devices
Footnote reads:
These holdings represent 22.6% of the fund's net assets as of 3/31/98.
Portfolio holdings will vary over time.
* KEEPING AN EYE ON CHINA
At the end of March, it became clear that the Chinese economy was indeed
slowing. The slowdown, higher unemployment, and particularly a drop in export
growth have caused economists to worry that China, like its Asian neighbors,
would devalue its currency, causing another wave of Asian market volatility.
With the elevation of the reformist-minded Zhu Rongji to the post of premier,
however, we believe China is well on its way to creating a more competitive
market economy. In his previous post and now as premier, Zhu has been
committed to eliminating redundant functions and cutting unprofitable
operations in the state-owned enterprises, reforming the bureaucracy, and
dealing with a largely insolvent banking system. The fund's direct Chinese
exposure is through Hong Kong listed China Telecom and Huaneng Power.
* UNCERTAINTY IN JAPAN MEANS CAUTIOUS OUTLOOK FOR REGION
Looking at Japan, we believe the pressure on the government to provide an
adequate stimulus for its economy will only increase as time goes on.
Following the close of the fiscal period, Prime Minister Ryutaro Hashimoto
proposed yet another fiscal package that unlike before, contained a 4 trillion
yen income tax cut. While this was a welcome development, any rebound in the
Japanese economy will require significant tax cuts on the corporate as well as
individual levels.
We believe many other countries in Asia have had a somewhat speculative
recovery in their stock markets and currencies. Therefore, we are targeting
only fundamentally strong economies such as Hong Kong and Singapore. We will
also continue to look for financially strong companies that are able to
withstand any future economic problems in the region.
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 3/31/98, there is no guarantee the fund will continue to hold
these securities in the future. International investing involves certain
risks, such as currency fluctuations, economic instability, and political
developments, not present with domestic investments. Funds that invest in a
particular region involve more risk than diversified funds.
Performance summary
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
Asia Pacific Growth Fund is designed for investors seeking capital
appreciation through common stocks and other securities of companies
located in Asia and the Pacific Rim.
TOTAL RETURN FOR PERIODS ENDED 3/31/98
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 -17.18% -21.95% -17.47% -21.59% -17.36% -20.26%
- ------------------------------------------------------------------------------
1 year -12.20 -17.24 -12.83 -17.19 -12.62 -15.66
- ------------------------------------------------------------------------------
5 years 35.38 27.61 30.80 28.80 32.11 27.53
Annual average 6.25 5.00 5.52 5.19 5.73 4.98
- ------------------------------------------------------------------------------
Life of fund 47.69 39.25 39.75 39.75 42.02 37.04
Annual average 5.64 4.77 4.82 4.82 5.06 4.53
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 3/31/98
MSCI Pacific Consumer
Index Price Index
- ------------------------------------------------------------------------------
6 months -18.11% 0.62%
- ------------------------------------------------------------------------------
1 year -14.65 1.38
- ------------------------------------------------------------------------------
5 years -5.71 12.95
Annual average -1.17 2.47
- ------------------------------------------------------------------------------
Life of fund -13.28 20.33
Annual average -1.99 2.65
- ------------------------------------------------------------------------------
Returns for class A and class M shares reflect the current maximum initial
sales charges of 5.75% and 3.50%, respectively. Class B share returns for
the 1-, 5-, and 10-year (where available) and life-of-fund periods reflect
the applicable contingent deferred sales charge (CDSC), which is 5% in the
first year, declines to 1% in the sixth year, and is eliminated
thereafter. Returns shown for class B and class M shares for periods prior
to their inception are derived from the historical performance of class A
shares, adjusted to reflect both the initial sales charge or CDSC, if any,
currently applicable to each class and, in the case of class B and class M
shares, the higher operating expenses applicable to such shares. All
returns assume reinvestment of distributions at NAV and represent past
performance; they do not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares when redeemed
may be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 3/31/98
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 -- 1
- ------------------------------------------------------------------------------
Income $0.088 $-- $0.004
- ------------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------------
Total $0.088 $-- $0.004
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
9/30/97 $13.58 $14.41 $13.34 $13.46 $13.95
- ------------------------------------------------------------------------------
3/31/98 11.16 11.84 11.01 11.12 11.52
- ------------------------------------------------------------------------------
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
MSCI Pacific Index* is an index of approximately 418 equity securities
issued by companies located in 5 countries and listed on the exchanges of
Australia, New Zealand, Japan, Hong Kong, and Singapore/Malaysia. All
values are expressed in U.S. dollars.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
*Securities indexes assume reinvestment of all distributions and interest
payments and do not take in account brokerage fees or taxes. Securities in
the fund do not match those in the indexes and performance of the fund
will differ. It is not possible to invest directly in an index.
Portfolio of investments owned
March 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (81.1%) *
NUMBER OF SHARES VALUE
Australia (11.2%)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
726,770 Commonwealth Bank of Australia $ 8,645,001
420,000 CRA Ltd. 5,520,761
1,388,000 CSL Ltd. 10,275,914
389,000 Lend Lease Corp. Ltd. 9,067,372
230,780 Pioneer International Ltd. 664,778
2,137,180 QBE Insurance Group Ltd. 9,340,588
1,533,386 Westpac Banking Ltd. 10,275,931
2,660,000 Woolworth Co. 9,952,204
--------------
63,742,549
China (0.4%)
- ------------------------------------------------------------------------------------------------------------
6,952,000 Yanzhou Coal Mining Co. Ltd. + 2,189,267
Hong Kong (17.9%)
- ------------------------------------------------------------------------------------------------------------
3,124,000 China Telecom Ltd. + 6,330,089
7,561,000 Dairy Farm International Holdings Ltd. 9,073,200
845,000 Dao Heng Bank Group Ltd. 2,497,419
1,639,800 Guoco Group Ltd. 4,021,089
1,843,000 Henderson Land Development Co. Ltd. (R) 9,347,964
4,442,000 Hong Kong and China Gas Co., Ltd. 7,452,828
2,752,000 Hong Kong Electric Holdings Ltd. 9,447,768
2,334,000 Hong Kong Telecommunications Ltd. 4,819,700
265,000 Huaneng Power International, Inc. ADR + 6,227,500
1,188,000 Hutchison Whampoa Ltd. 8,356,263
3,072,000 Li & Fung Ltd. 4,876,694
1,117,000 Smartone Telecommunications 144A 3,164,367
740,000 Smartone Telecommunications + 2,096,358
5,984,000 South China Morning Post Ltd. 4,016,004
1,244,000 Sun Hung Kai Properties Ltd. 8,469,193
1,161,000 Swire Pacific Ltd. Class A 6,143,491
2,826,000 Varitronix International Ltd. 5,671,549
--------------
102,011,476
India (0.2%)
- ------------------------------------------------------------------------------------------------------------
51,600 Mahanager Telephone Nigam Ltd. 144A 886,488
Japan (30.4%)
- ------------------------------------------------------------------------------------------------------------
1,332,000 Asahi Bank Ltd. 5,454,916
517,000 Bridgestone Corp. 11,732,346
390,000 Canon, Inc. + 8,821,013
670,000 Dai Nippon Printing Co. 11,076,049
271,000 Fuji Photo Film Co. 10,100,395
211,000 Honda Motor Co., Ltd. 7,610,463
121,000 Ito-Yokado Co., Ltd. 6,564,625
707,000 KAO Corp. 9,297,043
34,900 Keyence Corp. 4,825,370
158,000 Mitsumi Electric Company, Ltd. 2,267,659
171,000 Murata Manufacturing Co., Ltd. 4,728,586
1,697,000 Nikko Securities Co. Ltd. 5,483,245
426,000 Omron Corp. 6,466,188
177,000 Onward Kashiyama Co., Ltd. 2,194,545
136,000 Promise Co., Ltd. 7,061,620
560,000 Ricoh Co., Ltd. 5,638,716
86,000 Rohm Co., Ltd. 7,883,983
405,000 Sankyo Co., Ltd. 11,260,149
900 Santen Pharmaceutical Co., Ltd. 10,482
154,000 Secom Co., Ltd. 9,431,173
322,000 Shiseido Co., Ltd. + 3,701,985
202,000 Sony Corp. 17,152,096
730,000 Sumitomo Trust & Banking 4,722,950
308,000 Tokai Bank Ltd.(The) 1,907,064
100,000 Tokyo Electron Ltd. 3,373,912
210,000 Yamanouchi Pharmaceutical Co., Ltd. 4,828,676
--------------
173,595,249
Malaysia (1.1%)
- ------------------------------------------------------------------------------------------------------------
1,052,100 Berjaya Sports Toto Berhad 2,853,641
831,000 Carlsberg Brewery of Malaysia 3,232,931
--------------
6,086,572
New Zealand (2.1%)
- ------------------------------------------------------------------------------------------------------------
2,467,000 Telecom Corp. of New Zealand Ltd. 11,744,958
Philippines (0.8%)
- ------------------------------------------------------------------------------------------------------------
7,500,000 International Container Terminal Services, Inc. 1,092,137
131,700 Philippine Long Distance Co. 3,678,674
--------------
4,770,811
Singapore (7.9%)
- ------------------------------------------------------------------------------------------------------------
1,683,000 Clipsal Industries Ltd. 2,524,500
900,000 Development Bank of Singapore 6,584,005
194,000 Develpoment Bank of Signapore Rights
(expiration date 5/01/98) 102,323
1,174,000 Keppel Land Ltd. 1,623,075
1,298,000 Overseas Chinese Banking Corp. 7,322,877
2,973,000 Overseas Union Bank Ltd. 11,611,841
1,289,000 United Overseas Bank Ltd. (Registered) 7,152,232
2,173,500 Venture Manufacturing Ltd. 8,084,935
--------------
45,005,788
South Korea (2.1%)
- ------------------------------------------------------------------------------------------------------------
296,900 Housing & Commercial Bank 1,801,482
414,000 Kookmin Bank + 3,140,881
377,000 Korea Electric Power Corp. 4,903,156
43,600 Samsung Electronics Co. 2,299,700
--------------
12,145,219
Taiwan (1.1%)
- ------------------------------------------------------------------------------------------------------------
245,700 Taiwan Semiconductor Manufacturing Co. ADR + 6,357,488
United Kingdom (2.6%)
- ------------------------------------------------------------------------------------------------------------
492,879 HSBC Holdings PLC 15,076,059
United States (3.3%)
- ------------------------------------------------------------------------------------------------------------
296,000 AFLAC, Inc. 18,722,000
--------------
Total Common Stocks (cost $454,813,474) $ 462,333,924
SHORT-TERM INVESTMENTS (1.0%) * (cost $5,683,935)
PRINCIPAL AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
$ 5,683,000 Interest in $223,360,000 joint repurchase agreement
dated March 31, 1998 with SBC Warburg due April 1, 1998
with respect to various U.S. Treasury obligations --
maturity value of $5,683,000 for an effective yield
of 5.92% $ 5,683,935
- ------------------------------------------------------------------------------------------------------------
Total Investments (cost $460,497,409) *** $ 468,017,859
- ------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $570,273,473
*** The aggregate identified cost on a tax basis is $474,954,878,
resulting in gross unrealized appreciation and depreciation of
$29,835,516 and $36,772,535, respectively, or net unrealized
depreciation of $6,937,019.
+ Non-income-producing security.
(R) Real Estate Investment Trust.
144A after the name of a security represents those exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
ADR, after the name of a foreign holding stands for American
Depository Receipts, representing ownership of foreign securities on
deposit with a domestic custodian bank.
The fund had the following industry group concentration greater
than 10% at March 31, 1998 (as a percentage of net assets):
Finance 19.29%
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Forward Currency Contracts to Sell at March 31, 1998 (Unaudited)
Market Aggregate Face Delivery Unrealized
Value Value Date Appreciation
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Japanese Yen $115,057,117 $122,251,917 Jun-98 $7,194,800
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
March 31, 1998 (Unaudited)
Assets
- ---------------------------------------------------------------------------------------------------
<S> <C>
Investments in securities, at value
(identified cost $460,497,409) (Note 1) $468,017,859
- ---------------------------------------------------------------------------------------------------
Dividends and other receivables 1,456,249
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 4,034,936
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 84,711,311
- ---------------------------------------------------------------------------------------------------
Receivable for open forward currency contracts 7,194,800
- ---------------------------------------------------------------------------------------------------
Receivable for closed forward currency contracts 13,265,369
- ---------------------------------------------------------------------------------------------------
Total assets 578,680,524
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 401,776
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 323
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 4,871,808
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,211,129
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,122,107
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 240,817
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 22,964
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,805
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 402,579
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 130,743
- ---------------------------------------------------------------------------------------------------
Total liabilities 8,407,051
- ---------------------------------------------------------------------------------------------------
Net assets $570,273,473
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $670,915,423
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (4,299,121)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (111,026,057)
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets
and liabilities in foreign currencies 14,683,228
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $570,273,473
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($417,535,044 divided by 37,407,096 shares) $11.16
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $11.16)* $11.84
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($145,079,817 divided by 13,177,941 shares)** $11.01
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($7,658,612 divided by 688,908 shares) $11.12
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $11.12)* $11.52
- ---------------------------------------------------------------------------------------------------
* 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, 1998 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $380,289) $5,910,157
- --------------------------------------------------------------------------------------------------
Interest 829,399
- --------------------------------------------------------------------------------------------------
Total investment income 6,739,556
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 2,384,206
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 939,674
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 14,530
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 5,548
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 554,253
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 789,873
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 31,118
- --------------------------------------------------------------------------------------------------
Auditing 28,104
- --------------------------------------------------------------------------------------------------
Legal 6,212
- --------------------------------------------------------------------------------------------------
Postage 74,742
- --------------------------------------------------------------------------------------------------
Other 169,407
- --------------------------------------------------------------------------------------------------
Total expenses 4,997,667
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (283,946)
- --------------------------------------------------------------------------------------------------
Net expenses 4,713,721
- --------------------------------------------------------------------------------------------------
Net investment income 2,025,835
- --------------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (66,610,369)
- --------------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) 15,353,237
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities
in foreign currencies during the period 7,165,568
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (75,930,170)
- --------------------------------------------------------------------------------------------------
Net loss on investments (120,021,734)
- --------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(117,995,899)
- --------------------------------------------------------------------------------------------------
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
1998* 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $2,025,835 $455,571
- ----------------------------------------------------------------------------------------------------------------------
Net realized loss on investments (51,257,132) (30,517,612)
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments (68,764,602) 55,964,786
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (117,995,899) 25,902,745
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
- ----------------------------------------------------------------------------------------------------------------------
Class A (3,446,213) (6,762,186)
- ----------------------------------------------------------------------------------------------------------------------
Class B -- (5,832,588)
- ----------------------------------------------------------------------------------------------------------------------
Class M (2,734) (287,728)
- ----------------------------------------------------------------------------------------------------------------------
In excess of net investment income
- ----------------------------------------------------------------------------------------------------------------------
Class A -- (1,179,833)
- ----------------------------------------------------------------------------------------------------------------------
Class B -- (1,017,641)
- ----------------------------------------------------------------------------------------------------------------------
Class M -- (50,201)
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (32,728,251) 255,981,851
- ----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (154,173,097) 266,754,419
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 724,446,570 457,692,151
- ----------------------------------------------------------------------------------------------------------------------
End of period (including distributions in excess
of net investment income $4,299,121 and
$2,876,009, respectively) $570,273,473 $724,446,570
- ----------------------------------------------------------------------------------------------------------------------
* 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
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.58 $13.63 $13.58 $14.64 $11.55 $8.17
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .05 (c) .05 (c) .03 (c) .02 .04 (.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (2.38) .41 .63 (.63) 3.09 3.41
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (2.33) .46 .66 (.61) 3.13 3.38
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.09) (.43) (.60) (.04) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- (.08) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (.41) (.04) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- (.01) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.09) (.51) (.61) (.45) (.04) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $11.16 $13.58 $13.63 $13.58 $14.64 $11.55
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) (17.18)* 3.47 5.02 (4.14) 27.15 41.37
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $417,535 $515,107 $223,307 $158,773 $149,486 $24,150
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .72 * 1.50 1.54 1.55 1.53 2.03
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .43 * .40 .20 .14 (.01) (.54)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 64.05 * 89.77 72.68 91.13 65.02 79.78
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0098 $.0167 $.0229
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the periods ended September 30, 1995, and thereafter
includes amounts paid through expense offset arrangements and brokerage service arrangements. Prior
period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(d) Average commission rate paid is required for fiscal periods beginning on or after September 1, 1995.
(e) Distributions from net investment income amounted to less than $.01 per class M share.
</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
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.34 $13.41 $13.37 $14.53 $11.54 $10.86
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .01 (c) (.06)(c) (.07)(c) (.07) (.03) (.02)(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (2.34) .41 .63 (.64) 3.06 .70
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (2.33) .35 .56 (.71) 3.03 .68
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income -- (.36) (.51) (.04) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- (.06) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
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 $11.01 $13.34 $13.41 $13.37 $14.53 $11.54
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) (17.47)* 2.66 4.33 (4.88) 26.31 6.26 *
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $145,080 $199,036 $225,241 $144,514 $110,951 $9,901
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.09 * 2.25 2.30 2.31 2.27 .86 *
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .06 * (.45) (.55) (.62) (.73) (.25)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 64.05 * 89.77 72.68 91.13 65.02 79.78
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0098 $.0167 $.0229
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the periods ended September 30, 1995, and thereafter
includes amounts paid through expense offset arrangements and brokerage service arrangements. Prior
period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(d) Average commission rate paid is required for fiscal periods beginning on or after September 1, 1995.
(e) Distributions from net investment income amounted to less than $.01 per class M share.
</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 February 1, 1995+
operating performance (Unaudited) September 30 to Sept. 30
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $13.46 $13.54 $13.53 $12.41
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .02 (c) (.02)(c) (.03)(c) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (2.36) .41 .63 1.13
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (2.34) .39 .60 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income -- (e) (.40) (.58) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- (.07) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
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 $11.12 $13.46 $13.54 $13.53
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) (17.36)* 2.93 4.65 9.03 *
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $7,659 $10,304 $9,144 $2,829
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .97 * 2.00 2.06 2.09 *
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) .18 * (.17) (.24) (.45)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 64.05 * 89.77 72.68 91.13
- ------------------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid (d) $.0098 $.0167 $.0229
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the periods ended September 30, 1995, and thereafter
includes amounts paid through expense offset arrangements and brokerage service arrangements. Prior
period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(d) Average commission rate paid is required for fiscal periods beginning on or after September 1, 1995.
(e) Distributions from net investment income amounted to less than $.01 per class M share.
</TABLE>
Notes to financial statements
March 31, 1998 (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 gains and losses are included with the
net realized and unrealized gain or loss on investments. Net realized gains
and losses on foreign currency transactions represent net exchange gains or
losses on closed forward currency contracts, disposition of foreign currencies
and the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized appreciation and
depreciation of assets and liabilities in foreign currencies arise from
changes in the value of open forward currency contracts and assets and
liabilities other than investments at the period end, resulting from changes
in the exchange rate.
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 current 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) Line of credit The fund has entered into a committed line of credit with
certain banks. This line of credit agreement includes restrictions that the
fund maintain an asset coverage ratio of at least 300% and borrowings must not
exceed prospectus limitations. For the six months ended March 31, 1998, the
fund had no borrowings against the line of credit.
H) Federal taxes It is the policy of the fund to distribute all of its taxable
income within the prescribed time and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986, as amended. Therefore, no provision has been made for federal taxes
on income, capital gains or unrealized appreciation on securities held nor for
excise tax on income and capital gains.
At September 30, 1997, the fund had a capital loss carryover of approximately
$28,079,000 available to offset future net capital gain, if any. The amount of
carryover and the expiration dates are:
Loss Carryover Expiration
- -------------- ------------------
$21,694,000 September 30, 2004
6,385,000 September 30, 2005
I) 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, 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% thereafter.
As part of the subcustodiam contract between the subcustodian bank and Putnam
Fiduciary Trust Company, (PFTC), a wholly-owned subsidiary of Putnam
Investments, the subcustodian bank has a lien on the securities of the fund to
the extent permitted by the fund's investment restrictions to cover any
advances made by the subcustodian bank for the settlement of securities
purchased by the fund. At March 31, 1998, the payable to the subcustodian bank
represents the amount due for cash advance for the settlement of a security
purchased.
The fund reimburses Putnam Management an allocated amount for the compensation
and related expenses of certain officers of the fund and their staff who
provide administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by PFTC. Investor
servicing agent functions are provided by Putnam Investor Services, a division
of PFTC.
For the six months ended March 31, 1998, fund expenses were reduced by
$283,946 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the Statement
of operations exclude these credits. The fund could have invested a portion of
the assets utilized in connection with the expense offset arrangements in an
income producing asset if it had not entered into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $1,090 has
been allocated to the fund, 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 "Deferral Plan") which
allows the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain in the fund and are
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
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 and expenses incurred by it in distributing shares
of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds
Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets
attributable to class A, class B and class M shares, respectively. The
Trustees currently limit payment by the fund to 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, 1998, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $72,428 and $5,935 from the sale of
class A and class M shares, respectively and $317,144 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, 1998, Putnam Mutual Funds Corp., acting as underwriter
received $9,458 on class A redemptions.
Note 3
Purchase and sales of securities
During the six months ended March 31, 1998, purchases and sales of investment
securities other than short-term investments aggregated $364,805,210 and
$433,802,934, 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, 1998, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
March 31, 1998
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 31,257,613 $ 363,397,695
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 86,364 972,527
- ------------------------------------------------------------
31,343,977 364,370,222
Shares
repurchased (31,873,152) (374,603,005)
- ------------------------------------------------------------
Net decrease (529,175) $ (10,232,783)
- ------------------------------------------------------------
Year ended
September 30, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 108,467,305 $ 1,471,086,586
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 520,009 6,905,723
- ------------------------------------------------------------
108,987,314 1,477,992,309
Shares
repurchased (87,431,530) (1,195,459,718)
- ------------------------------------------------------------
Net increase 21,555,784 $ 282,532,591
- ------------------------------------------------------------
Six months ended
March 31, 1998
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 8,132,285 $ 91,744,502
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- ------------------------------------------------------------
8,132,285 91,744,502
Shares
repurchased (9,871,185) (113,153,819)
- ------------------------------------------------------------
Net decrease (1,738,900) $ (21,409,317)
- ------------------------------------------------------------
Year ended
September 30, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 34,368,702 $ 459,575,304
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 449,144 5,892,766
- ------------------------------------------------------------
34,817,846 465,468,070
Shares
repurchased (36,701,477) (493,052,877)
- ------------------------------------------------------------
Net decrease (1,883,631) $ (27,584,807)
- ------------------------------------------------------------
Six months ended
March 31, 1998
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 1,680,377 $ 20,001,030
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 187 2,097
- ------------------------------------------------------------
1,680,564 20,003,127
Shares
repurchased (1,756,970) (21,089,278)
- ------------------------------------------------------------
Net decrease (76,406) $ (1,086,151)
- ------------------------------------------------------------
Year ended
September 30, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 2,569,016 $ 34,985,302
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 21,841 288,734
- ------------------------------------------------------------
2,590,857 35,274,036
Shares
repurchased (2,500,814) (34,239,969)
- ------------------------------------------------------------
Net increase 90,043 $ 1,034,067
- ------------------------------------------------------------
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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
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
David K. Thomas
Vice President and Fund Manager
Paul C. Warren
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
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 the principal amount
invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
SA001 42023 844/193/470 5/98
