Putnam
Asia Pacific
Growth
Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
9-30-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Last summer, with virtually all of Asia's markets beset by turbulence and
uncertainty, it would have been difficult to imagine that a scant year
later we would be commenting on the remarkable resilience of any of them.
It would have been equally as surprising to be witnessing the
unprecedented levels of consolidation and restructuring now occurring
within Japan's corporate structure.
As recoveries took hold in Japan, South Korea, Hong Kong, and Singapore,
Putnam Asia Pacific Growth Fund was clearly among the beneficiaries. Your
fund's managers nevertheless are maintaining a close watch on some
potentially troublesome issues, among them U.S. interest rates, currency
valuations relative to the dollar, Y2K problems, and the fragility of
Japan's recovery.
As the managers explain in the following report on fiscal 1999
performance, they believe that economic recovery has taken hold in Asia
and they remain generally optimistic about prospects for the year ahead.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
November 17, 1999
Report from the Fund Managers
Paul C. Warren
Carmel Peters
The strengthening in the Asian stock markets and economies that began late
in 1998 remained firmly intact three-quarters of the way through 1999. A
growing global economy, corporate restructuring and industry
consolidation, and the growth of technological and service-related
industries have all served to improve the fortunes of Asia's key corporate
players.
Putnam Asia Pacific Growth Fund participated fully in the resurgence of
these markets, as returns for the fiscal year ended September 30, 1999,
indicate. As a result of strong stock selection and positioning in key
markets such as Japan, South Korea, and Taiwan, the fund was able to take
advantage of some of Asia's most notable restructuring stories as well as
some innovative and dynamic leaders of the "new economy."
Total return for 12 months ended 9/30/99
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- ----------------------------------------------------------------------------
71.79% 61.89% 70.58% 65.58% 70.69% 69.69% 70.88% 64.87%
- ----------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods and explanation of performance calculation
methods begin on page 7.
* HISTORIC PERIOD OF CHANGE IS TRANSFORMING JAPAN
A tidal wave of corporate restructuring, mergers, and industrial
consolidation has swept over Japan like one of Asia's famous tsunamis. The
Japanese stock market has enjoyed a renaissance this year based not only
on the improvement in Japan's economic outlook, but also on the
willingness of some companies to improve their businesses for the benefit
of their shareholders. Evidence of renewed investor interest in Japan was
seen this past summer in the nearly 12% spike in the yen relative to the
dollar despite Japan's abysmally low interest rates.
[GRAPHIC OMITTED: horizontal bar chart TOP COUNTRY ALLOCATIONS]
TOP COUNTRY ALLOCATIONS*
Japan 58.4%
Hong Kong 8.4%
Australia 7.6%
South Korea 6.5%
Taiwan 6.1%
Footnote reads:
*Based on net assets as of 9/30/99. Holdings will vary over time.
Part and parcel of this newfound shareholder focus is the unprecedented
level of consolidation and merger activity in some of Japan's more
inefficient industries. For example, the three-way merger announcement in
August of leading banks Dai-Ichi Kangyo, Fuji Bank, and Industrial Bank as
well as the recent merger agreement between Sumitomo and Sakura bank, is
indicative of the changes that are gripping Japanese companies once immune
from economic and competitive forces. Actions like these mergers also
serve to set a positive precedent for other companies.
While consolidation and an improvement in shareholder value are
significant developments, it is important to separate rhetoric from
reality. We are focusing on companies that we believe are implementing
genuine restructuring initiatives, such as those at Fujitsu and Toshiba,
and steering clear of those we consider unlikely to follow through on
ambitious promises. We have also targeted companies that place a greater
emphasis on the effective use of capital than their old-line counterparts
did.
For example, in the fund's semiannual report, we discussed the
restructuring plans of one of the portfolio's largest holdings, Nikko
Securities. We are happy to report that the company's strong performance
since then has confirmed our positive views. Nikko has continued to
implement its cost-cutting program and its earnings have been better than
expected. Going forward, we believe that Nikko is well positioned to take
advantage of the increasing demand for asset management services as more
Japanese investors shift assets from their conservative, low- yielding
Postal Savings accounts.
As it is in other areas of the world, telecommunications are exploding in
Japan. The astounding growth of the Internet and the surging demand for
data communication services is the driving force behind an unprecedented
level of consolidation and cutthroat competition in Japan's
telecommunications industry. We have targeted companies involved in all
aspects of telecommunications that have strong returns on capital and that
have experienced positive analyst earnings estimate revisions. We believe
fund holdings such as Murata Manufacturing, KDD Corporation, and DDI
Corporation are well positioned to benefit from telecommunications growth
in Japan and around the world through their international alliances.
In addition, several companies we favor have moved quickly to take
advantage of the rapidly growing demand for consumer and business Internet
services from Japan's more than 16 million Internet users. Fujitsu, for
example, owns Japan's largest Internet service provider (ISP), Nifty
Serve. Following Nifty Serve's merger in November 1999 with another
Fujitsu-owned ISP, the company expects to have 3.5 million subscribers.
Putnam Asia Pacific Growth Fund's class A shares were ranked in the top
quartile by Lipper for the 5-year period ended September 30, 1999. The fund
ranked in the top 18%, or 5 out of 27 Pacific Region funds ranked.
Past performance is not indicative of future results. 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. The fund was ranked 29 out of 55 funds (52%) for the
one-year period. The fund was not ranked over periods longer than five years.
Finally we have positioned the fund in smaller companies that represent
the evolution of the new service- oriented economy in Japan. These
companies have younger, more forward-thinking management teams than the
older managers at the traditional industrial conglomerates, and as the
domestic economy recovers, they offer significantly more growth potential.
Examples include electronics retailers Kojima and Yamada Denki as well as
adult-education company Benesse. 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.
* IMPROVED SEMICONDUCTOR PRICES AND RESTRUCTURING PROPEL SOUTH KOREA AND TAIWAN
Many of the Asian economies caught up in the recent economic crisis have
shown a surprisingly vigorous turnaround in economic growth. As interest
rates fell and stability returned, authorities in countries such as South
Korea were able to force large companies to restructure and reform
noncompetitive practices. Additionally, as the Japanese yen strengthened
in the past few months, a major impediment to the competitiveness of Asian
export growth was removed.
"In the last decade, even as its economy has gone from bad to worse, Japan has
evolved beyond the West's field of view. Change has come so far now that even
if Japan wanted to keep it a secret, it no longer could."
- -- The New York Times, October 24, 1999
Another important development for the region has been the upturn in the
semiconductor business cycle. Prices for commodity-type memory chips such
as DRAMS -- a large market for Asian companies -- have improved
substantially as demand for high-tech goods grows around the world.
Despite the recent pullback in South Korean stock prices, South Korea has
been one of the world's top performing markets for some time. We have also
been impressed with the level of restructuring that has taken place at the
large industrial groups known as chaebol. Samsung Electronics, a major
beneficiary of the upturn in semiconductor prices, has also been one of
the most aggressive companies leading the country's restructuring wave.
The fund also owns stakes in other Korean bellwethers such as Korea
Electric Power Corp., which has also been aggressive on the restructuring
front, Pohang Iron & Steel, a beneficiary of higher steel prices, and
Korea Telecom Corporation. Of course, with the relief afforded by higher
markets and capital inflows, the drive to restructure may slow somewhat.
Thus we will continue to monitor the progress in the Korean market.
Another direct beneficiary of the upturn in the chip cycle was Taiwan. Now
that some time has passed since the island's earthquake, it seems clear
that any disruption to the production of memory chips and other
technological components is limited. The fund owned Taiwanese blue chips
such as Taiwan Semiconductor as well as some strong performing but lesser
known chip stocks such as Winbond Electronics, United Microelectronics,
and chip testing company ASE Test.
* KEY HOLDINGS IN OTHER MARKETS REPRESENT GLOBAL THEMES
Many of the key holdings in the other major markets of Singapore, Hong
Kong, and Australia that posted solid performance during the period
represent some of the broader themes we discussed above. China Telecom,
which is listed on the Hong Kong stock exchange, is the leading mobile
operator in China -- a market regarded as the world's fastest growing for
fixed-line and mobile communications. Well-known real estate and exporting
conglomerate Hutchison Whampoa of Hong Kong offers a global cellular
communications presence through its subsidiaries in the United Kingdom,
Israel, and the United States. (Following the close of the period, leading
German wireless company Mannesmann announced that it intends to acquire
telecommunications company Orange of the United Kingdom -which is 44.8%
owned by Hutchison Whampoa -- at a substantial premium.) Venture
Manufacturing of Singapore is a leading outsourcing company for large
American multinationals such as IBM. Additionally Broken Hill Proprietary
of Australia benefited from the improvement in oil and other commodity
prices as signs of a global economic recovery began to emerge.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Nikko Securities Co. Ltd.
Japan
Insurance and finance
Murata Manufacturing Co. Ltd.
Japan
Electronics and electrical equipment
Fujitsu Ltd.
Japan
Computer services and software
Sony Corp.
Japan
Electronics and electrical equipment
Benesse Corp.
Japan
Education
Yamanouchi Pharmaceutical Co., Ltd.
Japan
Pharmaceuticals
DDI Corp.
Japan
Telecommunications
Mitsubishi Trust and Banking Corp.
Japan
Insurance and finance
Samsung Electronics Co.
South Korea
Electronics and electrical equipment
Shin-Etsu Chemical Co.
Japan
Chemicals
Footnote reads:
These holdings represent 28.4% of the fund's net assets as of 9/30/99.
Portfolio holdings will vary over time.
Although the Asian markets and economies have made tremendous strides in
the past year, important issues remain that could have negative short-term
implications. In Japan, while there have been deregulation and reforms,
much work remains to repair the economy following a decade-long recession.
Many economists are still looking for additional signs of improved demand
beyond the positive effects of government fiscal spending measures.
Additionally, if the Japanese monetary authorities do not take decisive
action to halt the yen's rise, the resulting negative impact on the
earnings of Japan's large exporting companies could hurt the overall
market.
In the rest of Asia, the possibility remains that investors may take
profits in these markets given the prevailing concerns about the effects
of the Y2K computer bug on Asian companies and rising U.S. interest rates.
Additionally, factors such as increased stock issuance ahead of year's end
and the Hong Kong government's flotation via a closed-end fund of the Hong
Kong-listed stock it owns could temporarily depress stock prices across
the region.
Nevertheless, we believe all these concerns are short term in nature and
should not obscure the long-term potential of many Asian companies. In
addition, we believe our strategy of targeting growing companies trading
below their inherent business worth can benefit long-term investors
seeking to capture the potential of the Asian markets.
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 9/30/99, there is no guarantee the fund will
continue to hold these securities in the future. The fund concentrates its
investments in one region or industry which involves more risk than a fund
that invests more broadly. International investing involves certain risks,
such as currency fluctuations, economic instability, and political
developments.
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 the Asia and the
Pacific Rim.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 9/30/99
Class A Class B Class C Class M
(inception dates) (2/20/91) (6/1/93) (7/26/99) (2/1/95)
NAV POP NAV CDSC NAV CDSC NAV POP
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 71.79% 61.89% 70.58% 65.58% 70.69% 69.69% 70.88% 64.87%
- -------------------------------------------------------------------------------------------
5 years 17.28 10.55 13.08 11.26 12.98 12.98 14.50 10.51
Annual average 3.24 2.03 2.49 2.16 2.47 2.47 2.74 2.02
- -------------------------------------------------------------------------------------------
Life of fund 100.74 89.27 87.94 87.94 88.29 88.29 91.61 84.89
Annual average 8.43 7.69 7.60 7.60 7.63 7.63 7.85 7.40
- -------------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 9/30/99
MSCI Consumer
Pacific Index price index
- ---------------------------------------------------------------------------
1 year 71.16% 2.75%
- ---------------------------------------------------------------------------
5 years -5.13 12.38
Annual average -1.05 2.36
- ---------------------------------------------------------------------------
Life of fund 16.86 24.55
Annual average 1.83 2.59
- ---------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. 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. For class C shares,
returns for periods prior to their inception are derived from the
historical performance of class A shares, adjusted to reflect both the
CDSC currently applicable to class C shares, which is 1% for the first
year and is eliminated thereafter, and the higher operating expenses
applicable to class C shares. All returns assume reinvestment of
distributions at NAV. 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.
[GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 2/20/91
Fund's class A MSCI Pacific Consumer price
Date shares at POP Index index
2/20/91 9,425 10,000 10,000
9/30/91 8,879 9,558 10,178
9/30/92 8,978 8,070 10,482
9/30/93 12,692 11,329 10,764
9/30/94 16,139 12,318 11,083
9/30/95 15,471 11,786 11,365
9/30/96 16,248 12,149 11,706
9/30/97 16,813 10,590 11,958
9/30/98 11,018 6,827 12,122
9/30/99 $18,927 $11,686 $12,455
Footnote reads:
Past performance is no assurance of future results. At the end of the same
time period, a $10,000 investment in the fund's class B or class C shares
would have been valued at $18,794 and $18,829, respectively, and no
contingent deferred sales charges would apply; a $10,000 investment in the
fund's class M shares would have been valued at $19,161 ($18,489 at public
offering price). See first page of performance section for performance
calculation method.
PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 9/30/99
Class A Class B Class C Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 -- 1
- ------------------------------------------------------------------------------
Income $1.120 $1.078 -- $1.107
- ------------------------------------------------------------------------------
Total $1.120 $1.078 -- $1.107
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- ------------------------------------------------------------------------------
9/30/98 $8.83 $9.37 $8.68 -- $8.78 $9.10
- ------------------------------------------------------------------------------
7/26/99* -- -- -- $12.15 -- --
- ------------------------------------------------------------------------------
9/30/99 13.49 14.31 13.20 13.48 13.35 13.83
- ------------------------------------------------------------------------------
*Inception date of class C shares.
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 C shares are not subject to an initial sales charge and are subject
to a contingent deferred sales charge only if the shares are redeemed
during the first year.
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 5.75% maximum 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 or C shares and assumes redemption at the end of
the period. Your fund's class B 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. The CDSC for class C shares is 1% for one year after
purchase.
Comparative benchmarks
Morgan Stanley Capital International (MSCI) Pacific Index is an index of
equity securities issued by companies located in five Asian countries. 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.
A guide to the financial statements
These sections of the report, preceded by the Report of independent
accountants, constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and non-investment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-ended funds, a separate
table is provided for each share class.
Report of independent accountants
For the fiscal year ended September 30, 1999
The Board of Trustees and Shareholders
Putnam Asia Pacific Growth Fund
We have audited the accompanying statement of assets and liabilities of
Putnam Asia Pacific Growth Fund, including the fund's portfolio, as of
September 30, 1999, and the related statement of operations, statement of
changes in net assets and financial highlights for the year or periods
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audit. The statement of changes in net assets for the year ended
September 30, 1998 and the financial highlights for each of the years or
periods in the four-year period ended September 30, 1998 were audited by
other auditors whose report dated November 10, 1998 expressed an
unqualified opinion on that financial statement and those financial
highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of September 30, 1999 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Putnam Asia Pacific Growth Fund as of September 30, 1999, the results
of its operations, changes in its net assets and financial highlights for
the year or periods then ended, in conformity with generally accepted
accounting principles.
KPMG LLP
Boston, Massachusetts
November 10, 1999
<TABLE>
<CAPTION>
The fund's portfolio
September 30, 1999
COMMON STOCKS (96.2%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Australia (7.6%)
- --------------------------------------------------------------------------------------------------------------------------
771,900 Amcor Ltd. $ 3,700,801
409,700 Australia & New Zealand Banking Group Ltd. 2,739,285
734,360 Broken Hill Proprietary Co., Ltd. 8,454,756
454,700 Cable & Wireless Optus Ltd. 144A (NON) 978,783
256,600 Cable & Wireless Optus Ltd. (NON) 552,355
928,549 Coles Myer Ltd. 4,850,386
336,000 National Australia Bank, Ltd. 4,916,265
214,923 News Corp. Ltd. ADR 6,111,873
280,000 News Corp. Ltd. 1,963,354
560,700 Western Mining Co. Ltd. 2,852,808
--------------
37,120,666
China (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
2,996,000 Shandong International Power Development Co. Ltd. (NON) 474,423
1,670,000 Shandong International Power Development Co. Ltd. 144A (NON) 264,448
--------------
738,871
Hong Kong (8.4%)
- --------------------------------------------------------------------------------------------------------------------------
1,628,000 Cathay Pacific Airways 2,934,277
491,000 Cheung Kong Infrastructure Holdings 4,092,984
646,000 China Resources Enterprise Ltd. 877,412
1,653,000 China Telecom Ltd. (NON) 5,096,794
422,000 Citic Pacific Ltd. 1,168,072
1,740,000 First Pacific Co., Ltd. 1,064,049
199,800 Hang Seng Bank Ltd. 2,115,681
502,000 Henderson Land Development Co. Ltd. 2,320,154
600 Hong Kong and China Gas Co., Ltd. 807
1,021,200 Hong Kong Telecommunications Ltd. 2,241,578
520,000 Hutchison Whampoa, Ltd. 4,836,820
993,500 Johnson Electric Holdings Ltd. 4,822,008
508,000 Legend Holdings Ltd. 483,965
1,122,000 Li & Fung Ltd. 3,394,528
1,000 South China Morning Post Ltd. 669
1,581,657 Wharf Holdings Ltd. 4,571,381
264,000 Wing Hang Bank Ltd. 883,682
--------------
40,904,861
Japan (58.4%)
- --------------------------------------------------------------------------------------------------------------------------
59,300 Advantest Corp. 8,590,969
29,480 Ariake Japan Co. Ltd. 1,636,237
153,000 Asahi Bank Ltd. 1,101,082
68,600 Benesse Corp. 13,674,826
18,900 Citizen Electronics Co., Ltd. 1,601,966
246,000 Dai Nippon Printing Co., Ltd. 4,579,812
1,564 DDI Corp. 11,770,461
86,000 Eiden Co., Ltd. 1,051,740
212,000 Eisai Co. Ltd. 5,384,760
13,500 Fancl Corp. 3,949,671
70,400 Fuji Soft AB, Inc. 6,006,849
466,000 Fujitsu Ltd. 14,554,280
60,200 Hoshiden Corp. 1,987,789
509,000 Industrial Bank Of Japan 6,267,930
109,000 INES Corp. 1,927,752
52,000 Ito-Yokado Co., Ltd. 4,304,798
55,510 KDD Corp. 5,749,437
60,800 Kita Kyushu Coca-Cola Bottling 2,802,634
80,500 Kojima Co Ltd. 4,361,994
45,200 Komeri Co., Ltd. 1,717,855
50,900 Mabuchi Motor 6,636,632
11,000 MEGANE TOP Co., Ltd. 279,398
186,000 Meiji Seika Kaisha Ltd. 1,424,438
937,000 Mitsubishi Trust and Banking Corp. 11,459,078
75,000 Mitsumi Electric Company, Ltd. 2,257,761
179,000 Murata Manufacturing Co. Ltd. 18,017,874
44,000 NIC Corp. 2,276,576
2,504,000 Nikko Securities Co. Ltd. 21,200,376
326,000 Nippon Sanso Corp. 1,134,713
23,100 Nippon Systemware Co., Ltd. 1,771,072
420 Nippon Telegraph and Telephone Corp. 5,175,917
8,540 Nippon Television Network Corp. 6,105,738
3,000 Nissin Co., Ltd. 204,327
47,000 Nissin Food Products Co., Ltd. 1,282,220
1,000 Nitori Co. 37,629
59,100 Promise Co., Ltd. 4,764,694
31,800 Rohm Co. Ltd. 6,656,162
238,000 Sharp Corp. 3,819,643
238,000 Shin-Etsu Chemical Co. 9,940,922
309,000 Shiseido Co., Ltd. 4,621,919
540 Shohkoh Fund & Co., Ltd. 403,857
96,200 Sony Corp. 14,398,325
79,023 Sumitomo Corp. 582,079
174,000 Taiyo Yuden Co., Ltd. 5,761,806
29,000 TDK Corp. 3,363,782
1,083,000 Teijin Ltd. 5,226,519
247,000 Tokai Bank Ltd. (The) 1,786,858
111,200 Tokyo Electric Power Co. 2,573,396
899,000 Toshiba Corp. 6,706,557
153,900 Toyota Motor Corp. 4,908,006
36,300 Trans Cosmos Inc. 4,541,769
36,000 Trend Micro Inc. 4,368,768
58,000 Yamada Denki 4,468,674
276,000 Yamanouchi Pharmaceutical Co., Ltd. 12,956,162
--------------
284,136,489
Luxembourg (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
120 NTT Mobile Communications 2,370,649
Malaysia (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
1,590,000 Public Bank Berhad 1,297,139
340,000 Resorts World Berhad 778,442
493,000 Telekom Malaysia 1,277,942
--------------
3,353,523
New Zealand (0.2%)
- --------------------------------------------------------------------------------------------------------------------------
785,100 Carter Holt Harvey Ltd. 947,203
Philippines (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
400,400 San Miguel Corp. 608,451
4,317,000 SM Prime Holdings Inc. 730,081
--------------
1,338,532
Singapore (4.8%)
- --------------------------------------------------------------------------------------------------------------------------
295,000 Datacraft Asia Ltd. 1,298,000
535,059 DBS Group Holdings Ltd. (NON) 5,985,352
1,803,400 Del Monte Pacific Ltd. 144A 838,581
1,296,000 Keppel Bank 2,533,247
166,000 Keppel Corp. 484,757
400 Keppel Land Ltd. 497
128,000 Overseas Chinese Banking Corp. 994,760
88,000 Singapore Press Holdings Ltd. 1,388,519
1,129,500 Venture Manufacturing Ltd. 9,841,978
--------------
23,365,691
South Korea (6.5%)
- --------------------------------------------------------------------------------------------------------------------------
100,800 Hyundai Motor Co. GDR 144A 995,400
120,200 Korea Electric Power Corp. 3,953,947
47,040 Korea Telecom Corp. ADR 1,740,480
22,100 Korea Telecom Corp. 1,364,893
101,300 L.G. Chemical Ltd. 2,940,699
47,000 L.G. Electronics 1,576,974
33,000 Pohang Iron & Steel Company, Ltd. 3,759,938
125,400 Samsung Corp. 1,835,625
61,827 Samsung Electronics Co. 10,016,381
164,240 Shinhan Bank 1,526,243
90,000 Ssangyong Oil Refining Co. Ltd. 1,798,520
--------------
31,509,100
Taiwan (6.1%)
- --------------------------------------------------------------------------------------------------------------------------
130,698 ASE Test Limited 3,169,427
112,000 Asustek Computer, Inc. 1,118,231
744 Asustek Computer, Inc. GDR 9,895
157,590 Bank Sinopac 84,148
103,950 Cathay Life Insurance Co., Ltd. 269,318
2,060,100 China Steel Corp. GDR 1,679,323
1,305,400 Far Eastern Textile Ltd. 1,860,143
1,454,000 Formosa Plastics Corp. 2,825,308
298,600 Hon Hai Precision Industry 1,962,363
480,260 President Chain Store Corp. 1,365,668
1,152,000 Siliconware Precision Industries Co. GDR 1,929,100
64,900 Synnex Tech Intl. 144A 1,203,895
1,615,060 Taiwan Semiconductor Manufacturing Co. 6,812,338
1,485,450 United Microelectronics Corp. 3,473,090
97,000 Winbond Electronics Corp. GDR 1,770,250
--------------
29,532,497
Thailand (0.9%)
- --------------------------------------------------------------------------------------------------------------------------
98,000 Advanced Info Service Public Co., Ltd. 1,114,557
411,000 Bangkok Bank Public Co., Ltd. (NON) 804,022
27,050 Siam Cement Public Company Ltd. (The) (NON) 560,063
1,208,400 Siam Commercial Bank Public Co. Ltd. (NON) 1,079,191
502,400 Total Access Communication Public Co. Ltd. 959,584
--------------
4,517,417
United Kingdom (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
405,898 HSBC Holdings PLC 4,650,779
United States (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
43,800 Data Communication Systems Co., Ltd. 2,880,169
945,400 National Financial Insurance 275,694
--------------
3,155,863
--------------
Total Common Stocks (cost $332,585,239) $ 467,642,141
UNITS (0.5%) (a)
NUMBER OF UNITS VALUE
- --------------------------------------------------------------------------------------------------------------------------
101,000 Overseas Chinese Banking Corp. Structured Note
(Issued by Credit Suisse First Boston) zero %, 2000
(Singapore) $ 743,360
99,000 Overseas Chinese Banking Corp. Ser. D Structured Note
(Issued by Credit Suisse First Boston) zero %, 2000
(Singapore) 728,640
79,000 Overseas Chinese Banking Corp. Structured Warrants
(Issued by Lehman Brothers Finance S.A. Exp. 3/23/00)
(Singapore) 588,645
73,000 Overseas Chinese Banking Corp. Structured Note
(Issued by Merrill Lynch & Co., Inc.) 3.00%, 2000
(Singapore) 538,879
--------------
Total Units (cost $1,914,279) $ 2,599,524
WARRANTS (0.1%) (a) (NON) (cost $--) EXPIRATION
NUMBER OF WARRANTS DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------
1,433,700 Siam Commercial Banks 5/10/02 $ 409,380
SHORT-TERM INVESTMENTS (1.4%) (a) (cost $6,986,000)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$6,986,000 Interest in $750,000,000 joint tri-party repurchase
agreement dated September 30, 1999 with
Goldman Sachs & Co., due October 1, 1999
with respect to various U.S. Treasury obligations --
maturity value of $6,987,027 for an effective yield of 5.29% $ 6,986,000
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $341,485,518) (b) $ 477,637,045
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $486,354,095.
(b) The aggregate identified cost on a tax basis is $358,705,451, resulting in gross unrealized appreciation and
depreciation of $127,429,614 and $8,498,020, respectively, or net unrealized appreciation of $118,931,594.
(NON) Non-income-producing security.
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 or GDR after the name of a foreign holding stands for American Depositary Receipts or Global Depositary Receipts,
respectively, representing ownership of foreign securities on deposit with a domestic custodian bank.
The fund had the following industry group concentrations greater than 10% at September 30, 1999 (as a percentage of
net assets):
Electronics and electrical equipment 25.7%
Insurance and finance 16.4
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
September 30, 1999
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $341,485,518) (Note 1) $477,637,045
- -----------------------------------------------------------------------------------------------
Cash 353
- -----------------------------------------------------------------------------------------------
Foreign currency (cost $1,683,948) 1,678,257
- -----------------------------------------------------------------------------------------------
Interest, dividends and other receivables 820,961
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 6,306,298
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 16,517,432
- -----------------------------------------------------------------------------------------------
Total assets 502,960,346
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 13,179,818
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,889,198
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 896,651
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 162,527
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 35,148
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,266
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 356,304
- -----------------------------------------------------------------------------------------------
Other accrued expenses 85,339
- -----------------------------------------------------------------------------------------------
Total liabilities 16,606,251
- -----------------------------------------------------------------------------------------------
Net assets $486,354,095
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $543,084,974
- -----------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (9,984,028)
- -----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (182,871,654)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 136,124,803
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $486,354,095
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($248,255,012 divided by 18,400,733 shares) $13.49
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $13.49)* $14.31
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($221,291,407 divided by 16,770,574 shares)** $13.20
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($2,308,147 divided by 171,260 shares)** $13.48
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($14,499,529 divided by 1,086,451 shares) $13.35
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $13.35)* $13.83
- -----------------------------------------------------------------------------------------------
* 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
Year ended September 30, 1999
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net foreign tax of $312,163) $ 3,657,011
- -----------------------------------------------------------------------------------------------
Interest 407,416
- -----------------------------------------------------------------------------------------------
Total investment income 4,064,427
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 2,587,768
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 995,206
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 20,510
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 6,812
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 426,113
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 1,426,484
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 2,020
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 73,324
- -----------------------------------------------------------------------------------------------
Registration fees 969
- -----------------------------------------------------------------------------------------------
Auditing 21,122
- -----------------------------------------------------------------------------------------------
Legal 4,299
- -----------------------------------------------------------------------------------------------
Postage 78,018
- -----------------------------------------------------------------------------------------------
Other 197,347
- -----------------------------------------------------------------------------------------------
Total expenses 5,839,992
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (176,705)
- -----------------------------------------------------------------------------------------------
Net expenses 5,663,287
- -----------------------------------------------------------------------------------------------
Net investment loss (1,598,860)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 30,225,157
- -----------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (6,343,387)
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities in
foreign currencies during the year (3,544,056)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 157,417,536
- -----------------------------------------------------------------------------------------------
Net gain on investments 177,755,250
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $176,156,390
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended September 30
-------------------------------
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) $(1,598,860) $4,508,016
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions 23,881,770 (126,176,660)
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies 153,873,480 (101,196,507)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 176,156,390 (222,865,151)
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income
Class A (13,528,305) (3,446,213)
- ---------------------------------------------------------------------------------------------------------------
Class B (12,499,068) --
- ---------------------------------------------------------------------------------------------------------------
Class M (706,133) (2,733)
- ---------------------------------------------------------------------------------------------------------------
In excess of net investment income
Class A (109,720) --
- ---------------------------------------------------------------------------------------------------------------
Class B (101,372) --
- ---------------------------------------------------------------------------------------------------------------
Class M (5,727) --
- ---------------------------------------------------------------------------------------------------------------
Decrease from capital share transactions (Note 4) (9,649,628) (151,334,815)
- ---------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 139,556,437 (377,648,912)
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 346,797,658 724,446,570
- ---------------------------------------------------------------------------------------------------------------
End of year (including distributions in excess of and
undistributed net investment income of $9,984,028,
and $23,215,866, respectively) $486,354,095 $346,797,658
- ---------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.83 $13.58 $13.63 $13.58 $14.64
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.01)(c) .11(c) .05(c) .03(c) .02
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 5.79 (4.77) .41 .63 (.63)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.78 (4.66) .46 .66 (.61)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (1.11) (.09) (.43) (.60) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income (.01) -- (.08) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (.41)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.12) (.09) (.51) (.61) (.45)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.49 $8.83 $13.58 $13.63 $13.58
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 71.79 (34.47) 3.47 5.02 (4.14)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $248,255 $240,978 $515,107 $223,307 $158,773
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.46 1.46 1.50 1.54 1.55
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.14) 1.05 .40 .20 .14
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 183.18 128.25 89.77 72.68 91.13
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements and brokerage service arrangements. (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) Distributions from net investment income amounted to less than $.01 per share.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.68 $13.34 $13.41 $13.37 $14.53
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.10)(c) .03(c) (.06)(c) (.07)(c) (.07)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 5.70 (4.69) .41 .63 (.64)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.60 (4.66) .35 .56 (.71)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (1.07) -- (.36) (.51) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income (.01) -- (.06) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (.41)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.08) -- (.42) (.52) (.45)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.20 $8.68 $13.34 $13.41 $13.37
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 70.58 (34.93) 2.66 4.33 (4.88)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $221,291 $100,331 $199,036 $225,241 $144,514
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 2.21 2.21 2.25 2.30 2.31
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.91) .32 (.45) (.55) (.62)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 183.18 128.25 89.77 72.68 91.13
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements and brokerage service arrangements. (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) Distributions from net investment income amounted to less than $.01 per share.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share July 26, 1999+
operating performance to September 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $12.15
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.02)(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.35
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.33
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.48
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 10.95*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,308
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .41*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.19)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 183.18
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements and brokerage service arrangements. (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) Distributions from net investment income amounted to less than $.01 per share.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share February 1, 1995+
operating performance Year ended September 30 to Sept. 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.78 $13.46 $13.54 $13.53 $12.41
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.08)(c) .06(c) (.02)(c) (.03)(c) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 5.76 (4.74) .41 .63 1.13
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.68 (4.68) .39 .60 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (1.10) -- (d) (.40) (.58) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income (.01) -- (.07) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.11) -- (.47) (.59) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.35 $8.78 $13.46 $13.54 $13.53
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 70.88 (34.75) 2.93 4.65 9.03*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $14,500 $5,488 $10,304 $9,144 $2,829
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.96 1.96 2.00 2.06 2.09*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.69) .57 (.17) (.24) (.45)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 183.18 128.25 89.77 72.68 91.13
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements and brokerage service arrangements. (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) Distributions from net investment income amounted to less than $.01 per share.
</TABLE>
Notes to financial statements
September 30, 1999
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, class C and class M shares. The fund
began offering class C shares on July 26, 1999. 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 C shares are
subject to the same fees and expenses as class B shares, except that class
C shares have a one-year 1.00% contingent deferred sales charge and do not
convert to class A shares. Class M shares are sold with a maximum front
end sales charge of 3.50% and pay an ongoing distribution fee that is
higher than class A shares but lower than class B and class C 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
at the date of the financial statements and the reported amounts of
increases and decreases in net assets from operations during the reporting
period. 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. 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.)
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. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. 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). Gains or losses on securities sold are determined on
the identified cost basis. 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, and 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 realized 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 year ended
ended September 30, 1999, 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, 1999, the fund had a capital loss carryover of
approximately $179,363,000 available to offset future capital gains, if
any. The amount of the carryover and the expiration dates are:
Loss Carryover Expiration
- -------------- ------------------
$21,694,000 September 30, 2004
6,385,000 September 30, 2005
41,190,000 September 30, 2006
110,094,000 September 30, 2007
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. These
differences include temporary and permanent differences of losses on wash
sale transactions, foreign currency gains and losses, post-October loss
deferrals, foreign taxes, realized gains and losses on passive foreign
investment companies and unrealized gains and losses on passive foreign
investment companies. 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. For the
year ended September 30, 1999, the fund reclassified $4,650,709 to
increase distributions in excess of net investment income and $114,845 to
increase paid-in-capital, with a decrease to accumulated net realized
losses of $4,535,864. The calculation of net investment income per share
in the financial highlights table excludes these adjustments.
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.
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 Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the year ended September 30, 1999, fund expenses were reduced by
$176,705 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 $800 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
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, class C 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%,
1.00% and 1.00% of the average net assets attributable to class A, class
B, class C and class M shares, respectively. The Trustees have approved
payment by the fund at an annual rate of 0.25%, 1.00%, 1.00% and 0.75% of
the average net assets attributable to class A, class B, class C and class
M shares respectively.
For the year ended September 30, 1999, Putnam Mutual Funds Corp., acting
as underwriter received net commissions of $149,374 and $14,647 from the
sale of class A and class M shares, respectively and received $292,249 and
$23 in contingent deferred sales charges from redemptions of class B and
class C shares. A deferred sales charge of up to 1% is assessed on certain
redemptions of class A shares. For the year ended September 30, 1999,
Putnam Mutual Funds Corp., acting as underwriter received $49,315 on class
A redemptions.
Note 3
Purchase and sale of securities
During the year ended September 30, 1999, cost of purchases and proceeds
from sales of investment securities other than short-term investments
aggregated $590,553,248 and $637,782,906, respectively. There were no
purchases and sales of U.S. government obligations.
Note 4
Capital shares
At September 30, 1999, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Year ended September 30, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 59,365,607 $638,284,289
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,316,540 11,848,859
- -----------------------------------------------------------------------------
60,682,147 650,133,148
Shares
repurchased (69,576,374) (724,586,710)
- -----------------------------------------------------------------------------
Net decrease (8,894,227) $(74,453,562)
- -----------------------------------------------------------------------------
Year ended September 30, 1998
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 54,048,482 $ 589,265,153
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 86,345 972,298
- -----------------------------------------------------------------------------
54,134,827 590,237,451
Shares
repurchased (64,776,138) (702,418,905)
- -----------------------------------------------------------------------------
Net decrease (10,641,311) $(112,181,454)
- -----------------------------------------------------------------------------
Year ended September 30, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 14,238,409 $ 159,559,326
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,235,747 10,948,718
- -----------------------------------------------------------------------------
15,474,156 170,508,044
Shares
repurchased (10,265,946) (112,205,552)
- -----------------------------------------------------------------------------
Net increase 5,208,210 $ 58,302,492
- -----------------------------------------------------------------------------
Year ended September 30, 1998
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 11,481,054 $ 125,403,283
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
11,481,054 125,403,283
Shares
repurchased (14,835,531) (162,782,350)
- -----------------------------------------------------------------------------
Net decrease (3,354,477) $ (37,379,067)
- -----------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations)
to September 30, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 178,127 $ 2,352,451
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
178,127 2,352,451
Shares
repurchased (6,867) (91,458)
- -----------------------------------------------------------------------------
Net increase 171,260 $ 2,260,993
- -----------------------------------------------------------------------------
Year ended September 30, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 3,124,523 $33,844,735
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 67,917 607,179
- -----------------------------------------------------------------------------
3,192,440 34,451,914
Shares
repurchased (2,730,963) (30,211,465)
- -----------------------------------------------------------------------------
Net increase 461,477 $ 4,240,449
- -----------------------------------------------------------------------------
Year ended September 30, 1998
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 2,532,571 $28,258,569
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 187 2,093
- -----------------------------------------------------------------------------
2,532,758 28,260,662
Shares
repurchased (2,673,098) (30,034,956)
- -----------------------------------------------------------------------------
Net decrease (140,340) $(1,774,294)
- -----------------------------------------------------------------------------
Note 5 (Unaudited)
Change in Independent
Accountants
Based on the recommendation of the Audit Committee of the fund, the Board
of Trustees has determined not to retain PricewaterhouseCoopers LLP as
this fund's independent auditor and voted to appoint KPMG LLP for the
fund's fiscal year ended September 30, 1999. During the two previous
fiscal years, PricewaterhouseCoopers LLP audit reports contained no
adverse opinion or disclaimer of opinion; nor were its reports qualified
or modified as to uncertainty, audit scope, or accounting principle.
Further, in connection with its audits for the two previous fiscal years
and through July 14, 1999, there were no disagreements between the fund
and PricewaterhouseCoopers LLP on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure,
which if not resolved to the satisfaction of PricewaterhouseCoopers LLP
would have caused it to make reference to the disagreements in its report
on the financial statements for such years.
Federal tax information
(Unaudited)
For the period, interest and dividends from foreign countries were
$3,815,341. Taxes paid to foreign countries were $312,163.
The fund has designated 3.56% of the distributions from net investment
income as qualifying for the dividends received deduction for
corporations.
The Form 1099 you receive in January 2000 will show the tax status of all
distributions paid to your account in calendar 1999.
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investments has won the DALBAR Service Award 8 times in the past 9
years. In 1997 and 1998, Putnam was the only company to win all three
DALBAR awards: for service to investors, to financial advisors, and to
variable annuity contract holders.*
* HELP YOUR INVESTMENTS GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings account.+
* SWITCH FUNDS EASILY
Within the same class of shares, you can move money from one account to
another without a service charge. (This privilege is subject to change or
termination.)
* ACCESS YOUR MONEY QUICKLY
You can get checks sent regularly or redeem shares any business day at the
then-current net asset value, which may be more or less than the original
cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a helpful
Putnam representative. To learn more about Putnam, visit our Web site.
www.putnaminv.com
To make an additional investment in this or any other Putnam fund, contact
your financial advisor or call our toll-free number.
1-800-225-1581
*DALBAR, Inc., an independent research firm, presents the awards to financial
services firms that provide consistently excellent service.
+Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market.
The Putnam family of funds
The following is a complete list of Putnam's open-end mutual funds. Please
call your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus
for any Putnam fund. It contains more complete information, including charges
and expenses. Please read it carefully before you invest or send money.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government
Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund *
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund**
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION FUNDS
Putnam Asset Allocation Funds-three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Diversified Income Trust II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply. Contact
Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at www.putnaminv.com.
Fund information
WEB SITE
www.putnaminv.com
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
INDEPENDENT ACCOUNTANTS
KPMG LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
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
Paul C. Warren
Vice President and Fund Manager
Carmel Peters
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
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' Web site: 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
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
AN001 56135 844/193/470 11/99
