Putnam
Asia Pacific
Growth
Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
3-31-99
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* Putnam Asia Pacific Growth Fund's class A shares were ranked in the top
20% of the Pacific region funds ranked by Lipper for the 5-year period
ended March 31, 1999. The fund was 5 out of 25 funds ranked.*
* "Asian companies have often been blamed for aggravating the economic
crisis by cronyism, lack of transparency, and trampling on the rights of
minority shareholders. But a few groups have led the way in maximizing
shareholder value."
-- Financial Times, April 22, 1999
CONTENTS
4 Report from Putnam Management
9 Fund performance summary
12 Portfolio holdings
16 Financial statements
* 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. For the 1-year
period, the fund ranked 21 out of 49 Pacific region funds. The fund was
not ranked over longer periods.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
It is always heartening to note a dramatic turnaround from a seemingly
impossible situation. Such has been the case, I am pleased to report, with
economic and market events in Asia since we reported to you last. Putnam
Asia Pacific Growth Fund has been among the beneficiaries of the strong
rebound in Asian stocks during the first half of fiscal 1999.
Unfortunately, such good news has been accompanied by some sadness here at
Putnam -- the untimely death of David K. Thomas, your fund's lead manager
and architect of its creation and introduction eight years ago. David
succumbed to cancer earlier this year. He had been with Putnam for 12
years and was instrumental in building our now significant staff of
experts in Far Eastern markets.
Paul Warren, who has been a manager of the fund since 1997, has been
joined by Carmel Peters, a member of the Emerging Markets Equity Team, as
a manager of the fund. Before joining Putnam in 1997, Carmel was with
Wheelock NatWest Investment Management, Rothschild Asset Management in
Hong Kong and Japan, and Allied Irish Investment Bank, Dublin. She has 28
years of investment experience.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
May 19, 1999
Report from the Fund Managers
Paul Warren
Carmel Peters
The early signs of promise in the Asian financial markets we noted six
months ago have now evolved into a full-fledged rebound in Asian stocks
and, to some extent, Asian economies. We are pleased to report that your
fund, Putnam Asia Pacific Growth Fund, has participated in this recovery
and also benefited from some more recent developments that you may have
heard about, namely the restructuring efforts of Japanese companies.
For the semiannual period ended March 31, 1999, the fund had a total
return of 27.22% at net asset value (19.89% at public offering price). For
performance over longer periods and for other share classes, please turn
to page 9.
* INCREASED JAPANESE WEIGHTING REFLECTS CORPORATE RESTRUCTURING STORY
The most significant development was our increase in the fund's weighting
in Japanese stocks near the end of the semiannual period. Japanese
companies are finally beginning to respond to Japan's poor economic
environment by increasing restructuring efforts, focusing on return on
equity and profitability and attempting to add value for shareholders.
There are numerous recent examples of companies such as Sony, Toshiba, and
NEC that have announced plans to cut staff dramatically -- and costs.
Combined with increased merger and acquisition activity, this
restructuring is creating attractive investment opportunities.
Although corporate restructuring plans are a positive development for
investors, we continue to hold a pessimistic view of Japan's macroeconomic
future. Despite the government's efforts both to recapitalize the banks in
order to deal with problem loans and to spur consumer demand, most
economic indicators point to a continued downturn in the economy. If
anything, the restructuring measures of Japanese corporations will only
serve to exacerbate Japan's growing unemployment rate and lackluster
consumer demand.
One of the fund's key Japanese holdings that epitomizes the new
restructuring trend is Fujitsu, a leading technology company with both an
Internet service provider business and a rapidly growing software
business. As part of the company's restructuring plan, less profitable
manufacturing units are being downsized and the company's focus is
shifting toward the potentially more profitable software development area.
While this holding, along with others discussed in this report, was 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.
Another stock that has performed very well for the fund is Nikko
Securities, which is also involved in restructuring. Like an increasing
number of other Japanese companies, Nikko has initiated far-reaching plans
to boost revenues, setting three-year targets of 15% return on equity (an
important measure of profitability and efficiency) and of staff reductions
of 20%. Citigroup's plans to take a 15% stake in the company also
contributed to the stock's recent rally.
[GRAPHIC OMITTED: TOP COUNTRY ALLOCATIONS]
TOP COUNTRY ALLOCATIONS*
Japan 59.9%
Hong Kong 11.4%
Australia 10.0%
South Korea 5.7%
Singapore 5.4%
Footnote reads:
*Based on net assets as of 3/31/99. Holdings will vary over time.
* SOUTH KOREA CONTINUES TO PROVIDE POSITIVE SURPRISES
South Korea has been one of the few Asian markets to show both an
astounding rebound in its stock market and significant evidence of an
economic turnaround. The South Korean stock market was the top performing
market in the world in 1998, and as of mid April 1999 the Kospi Index, the
main stock market barometer, is at an 18-month high. Coupled with that,
economic indicators have shown significant improvement.
One of the fund's major South Korean holdings continues to be Samsung, a
leading electronics manufacturer. Samsung has one of the most aggressive
restructuring plans in the South Korean market and it has come to
exemplify a broader trend of restructuring and change across the once
lumbering and monolithic chaebols, or industrial groups.
* REMAINING DEVELOPED ASIAN MARKETS OFFERED PROFIT-TAKING OPPORTUNITIES
As we have added to the fund's Japanese holdings, we have, in turn, taken
some profits on some Australian holdings. Strong consumer demand in
Australia helped propel retailing stocks and for a time made the
Australian market a stronghold in an otherwise uncertain southern Asian
market environment. However, we moved to reduce some of the fund's
Australian holdings because we believe the country's current account
deficit will eventually put pressure on the value of its strong currency.
In other parts of Asia, we maintained exposure to the Singapore banking
industry, although we took some profits in this area as opportunities
arose. We believe these banks will begin to curtail their loan loss
provisioning in the near future and will be able to play an important role
in the revitalization of the economy. We welcome the recent decline in
Hong Kong's interest rates but have made no significant changes to the
fund's positioning in this market given the uncertainty of China's
economic situation.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Nikko Securities Co., Ltd. (Japan)
Insurance and finance
Matsushita Electric Industrial Co. (Japan)
Electronics and electrical equipment
Samsung Electronics Co. (South Korea)
Electronics and electrical equipment
Fujitsu, Ltd. (Japan)
Computer services and software
Mitsubishi Trust and Banking Corp. (Japan)
Insurance and finance
Murata Manufacturing Co., Ltd. (Japan)
Electronics and electrical equipment
Honda Motor Co., Ltd. (Japan)
Automotive
Yamanouchi Pharmaceutical Co., Ltd. (Japan)
Pharmaceuticals
Secom Co., Ltd. (Japan)
Electronics and electrical equipment
News Corp., Ltd. ADR (Australia)
Broadcasting
Footnote reads:
These holdings represent 30.3% of the fund's net assets as of 3/31/99.
Portfolio holdings will vary over time.
* OPTIMISTIC BUT CAUTIOUS OUTLOOK
We are pleased by the progress many of the Asian markets have made and we
believe there is ample evidence that many of the economies in the region
have bottomed and are on the mend. Additionally we are heartened by some
of restructuring programs and mergers and acquisitions activity we are
observing in Japan. You should understand that the mere discussion of
these topics represents a fundamental change in Japanese corporate
governance.
Of course, we are aware we are dealing with an extremely complex and fluid
situation in Japan. Therefore, we will continue to focus on the merits of
individual companies and as always place a strong emphasis on fundamental
research. In a broader context, we will also continue to monitor events in
China. Should the Chinese government feel it necessary to devalue its
currency, the devaluation could potentially have a destabilizing effect on
the rest of the region. Nevertheless, we believe some of the painful
changes endured by the Asian markets and economies in the recent past will
only serve to make Asian equities better investments for long-term
investors.
The views expressed here are exclusively those of Putnam Management. They
are not meant as investment advice. Although the described holdings were
viewed favorably as of 3/31/99, there is no guarantee the fund will
continue to hold these securities in the future. International investing
involves certain risks, such as currency fluctuations, economic
instability, and political developments. Funds investing in a single
sector may be subject to more volatility than funds investing in a diverse
group of sectors.
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.
TOTAL RETURN FOR PERIODS ENDED 3/31/99
Class A Class B Class M
(inception date) (2/20/91) (6/1/93) (2/1/95)
NAV POP NAV CDSC NAV POP
- --------------------------------------------------------------------------
6 months 27.22% 19.89% 26.77% 21.77% 26.72% 22.26%
- --------------------------------------------------------------------------
1 year 0.66 -5.13 -0.06 -4.51 0.05 -3.42
- --------------------------------------------------------------------------
5 years -6.85 -12.19 -10.22 -11.66 -9.15 -12.35
Annual average -1.41 -2.57 -2.13 -2.45 -1.90 -2.60
- --------------------------------------------------------------------------
Life of fund 48.66 40.16 39.67 39.67 42.09 37.11
Annual average 5.01 4.25 4.21 4.21 4.43 3.97
- --------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 3/31/99
MSCI Consumer
Pacific Index price index
- --------------------------------------------------------------------------
6 months 40.22% 0.98%
- --------------------------------------------------------------------------
1 year 10.40 1.73
- --------------------------------------------------------------------------
5 years -16.79 12.09
Annual average -3.61 2.31
- --------------------------------------------------------------------------
Life of fund -4.26 22.40
Annual average -0.54 2.53
- --------------------------------------------------------------------------
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 life-of-fund
periods reflect the applicable contingent deferred sales charge (CDSC),
which is 5% in the first year, declines to 1% in the sixth year, and is
eliminated thereafter. Returns shown for class B and class M shares for
periods prior to their inception are derived from the historical
performance of class A shares, adjusted to reflect both the initial sales
charge or CDSC, if any, currently applicable to each class and in the case
of class B and class M shares, the higher operating expenses applicable to
such shares. All returns assume reinvestment of distributions at NAV.
Investment return and principal value will fluctuate so that an investor's
shares when redeemed may be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 3/31/99
Class A Class B Class M
- --------------------------------------------------------------------------
Distributions (number) 1 1 1
- --------------------------------------------------------------------------
Income $1.120 $1.078 $1.107
- --------------------------------------------------------------------------
Capital gains -- -- --
- --------------------------------------------------------------------------
Total $1.120 $1.078 $1.107
- --------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- --------------------------------------------------------------------------
9/30/98 $8.83 $9.37 $8.68 $8.78 $9.10
- --------------------------------------------------------------------------
3/31/99 9.99 10.60 9.81 9.90 10.26
- --------------------------------------------------------------------------
TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the 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 shares and assumes redemption at the end of the
period. Your fund's CDSC declines from a 5% maximum during the first year
to 1% during the sixth year. After the sixth year, the CDSC no longer
applies.
COMPARATIVE BENCHMARKS
Morgan Stanley Capital International (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. 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.
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
<TABLE>
<CAPTION>
Portfolio of investments owned
March 31, 1999 (Unaudited)
COMMON STOCKS (99.3%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Australia (10.0%)
- --------------------------------------------------------------------------------------------------------------------------
163,276 AMP Ltd. $ 1,789,994
344,000 Australia & New Zealand Banking Group Ltd. 2,500,350
593,100 Cable & Wireless Optus Ltd. 144A (NON) 1,381,755
626,367 Coles Myer Ltd. 3,402,415
337,883 Commonwealth Bank of Australia 5,552,883
380,500 CSL Ltd. 3,171,439
99,900 Lend Lease Corp. Ltd. 1,274,101
217,194 News Corp. Ltd. ADR 6,407,223
183,850 Westpac Banking Corp. 1,342,142
--------------
26,822,302
Hong Kong (11.4%)
- --------------------------------------------------------------------------------------------------------------------------
86,000 Asia Satellite Telecommunications Holdings Ltd. 136,508
2,109,000 Cathay Pacific Airways 2,422,261
501,000 Cheung Kong Holdings Ltd. (R) 3,814,557
309,000 China Telecom Ltd. (NON) 514,402
2,639,000 Dairy Farm International Holdings Ltd. 3,061,240
87,800 Hang Seng Bank Ltd. 807,298
415,000 Henderson Land Development Co. Ltd. (R) 2,029,746
876,000 Hong Kong and China Gas Co. Ltd. 1,237,863
586,000 Hutchison Whampoa Ltd. 4,612,982
1,193,000 Johnson Electric Holdings Ltd. 3,363,924
1,630,000 Legend Holdings Ltd. 720,448
1,111,000 Li & Fung Ltd. 2,351,323
178,000 National Mutual Asia Ltd. 125,190
1,485,000 South China Morning Post Ltd. 824,042
387,000 Sun Hung Kai Properties Ltd. 2,896,632
474,000 Varitronix International Ltd. 740,147
292,000 Wing Hang Bank Ltd. 776,255
--------------
30,434,818
Japan (59.9%)
- --------------------------------------------------------------------------------------------------------------------------
48,700 Advantest Corp. 3,703,655
796,000 Asahi Bank Ltd. 4,180,672
57,600 Benesse Corp. 4,632,201
248,000 Canon, Inc. 6,106,218
196,800 Chubu Electric Power, Inc. 3,472,941
172,000 Dai Nippon Printing Co. Ltd. 2,601,680
847 DDI Corp. 3,985,882
154,000 Diawa House Industry Co. Ltd. 1,749,647
42,000 Eisai Co. Ltd. 873,529
15,000 Fancl Corp. 1,701,680
535,000 Fujitsu Ltd. 8,551,007
166,000 Honda Motor Co. Ltd. 7,463,024
53,000 Hoshiden Corp. 1,180,252
85,000 INES Corp. 1,110,714
60,000 KAO Corp. 1,318,487
52,000 Kita Kyushu Coca-Cola Bottling 2,189,243
42,600 Kyushu Electric Power, Inc. 662,269
35,800 Mabuchi Motor 2,653,411
468,000 Matsushita Electric Industrial Co. (NON) 9,084,704
111,000 Matsushita-Kotobuki Electronics Industries Ltd. 2,537,142
772,000 Mitsubishi Trust and Banking Corp. 7,966,520
190,000 Mitsumi Electric Company Ltd. 3,784,033
22,000 Moshi Moshi Hotline Inc. 1,442,017
142,000 Murata Manufacturing Co. Ltd. 7,517,646
2,411,000 Nikko Securities Co. Ltd. 11,143,276
22,500 Nippon Systemware Co. Ltd. 1,039,916
625 Nippon Telegraph and Telephone Corp. 6,092,436
6,590 Nippon Television Network Corp. 2,525,243
51,000 Nissin Food Products Co. Ltd. 1,127,143
44,700 Promise Co. Ltd. 2,351,445
109,000 Ricoh Co. Ltd. 1,133,050
24,000 Rohm Co. Ltd. 2,853,781
7,000 Sankyo Co. Ltd. 149,412
75,000 Secom Co. Ltd. 7,071,427
240,000 Shin-Etsu Chemical Co. 6,272,268
197,000 Shiseido Co. Ltd. 2,714,958
43,100 Softbank Corp. 4,809,814
53,000 Takeda Chemical Industries 2,044,285
6,400 Takefuji Corp. 489,412
57,000 TDK Corp. 4,593,529
185,600 Tokyo Electric Power Co. 3,977,142
14,500 Trend Micro, Inc. 1,657,143
225,000 Yamanouchi Pharmaceutical Co. Ltd. 7,090,335
410,000 Yokohama Rubber Co. Ltd. 1,081,849
--------------
160,686,438
Luxembourg (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
54 NTT Mobile Communications 2,654,621
Philippines (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
158,200 Bank of the Philippine Islands 397,549
20,000 Philippine Long Distance Telephone Co. ADR 528,497
2,592,000 SM Prime Holdings, Inc. (NON) 537,202
--------------
1,463,248
Singapore (5.4%)
- --------------------------------------------------------------------------------------------------------------------------
231,000 City Developments Ltd. 1,204,170
276,000 Cycle & Carriage Ltd. 1,166,985
295,000 Datacraft Asia Ltd. 690,300
327,000 Development Bank of Singapore Ltd. (NON) 2,481,147
283,000 GP Batteries International Ltd. 414,706
1,119,000 Keppel Bank (NON) 1,886,064
76,000 Oversea Chinese Banking Corp. 515,030
1,368,500 Venture Manufacturing Ltd. (NON) 6,182,624
--------------
14,541,026
South Korea (5.7%)
- --------------------------------------------------------------------------------------------------------------------------
40,701 Housing & Commercial Bank GDR 813,354
82,100 Korea Electric Power Corp. 1,982,184
20,800 Korea Telecom Corp. 846,929
20,600 Pohang Iron & Steel Company Ltd. 1,271,990
114,362 Samsung Electronics Co. 8,861,648
169,700 Shinhan Bank 1,377,254
--------------
15,153,359
Taiwan (2.2%)
- --------------------------------------------------------------------------------------------------------------------------
41,200 Ase Test Ltd. (NON) 1,627,400
58,290 Asustek Computer, Inc. GDR (NON) 517,324
350,000 President Chain Store Corp. (NON) 1,083,182
230,000 Siliconware Precision Industries Co. GDR (NON) 468,750
425,000 Taiwan Semiconductor Manufacturing Co. ADR (NON) 1,334,541
69,500 Winbond Electronics Corp. 144A GDR (NON) 813,150
--------------
5,844,347
Thailand (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
82,000 Advanced Info Service Public Co. Ltd. 592,719
27,000 Siam Cement Public Company Ltd. (The) 545,310
--------------
1,138,029
United Kingdom (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
85,877 HSBC Holdings PLC 2,693,008
United States (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
25,321 AFLAC, Inc. 1,378,469
104,000 Bank of the Philippine Islands 261,347
33,000 Data Communication Systems Co. Ltd. 1,331,092
285,000 Toshiba Corp. 1,937,521
--------------
4,908,429
--------------
Total Common Stocks (cost $211,581,278) $ 266,339,625
WARRANTS (0.3%) (a) (NON) EXPIRATION
NUMBER OF WARRANTS DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------
71,000 Development Bank of Singapore Structured
Warrants (Issued by Lehman Brothers
Finance S.A.) 3/23/00 $ 423,160
79,000 Oversea Chinese Banking Corp.Structured
Warrants (Issued by Lehman Brothers
Finance S.A.) 3/23/00 418,266
--------------
Total Warrants (cost $823,469) $ 841,426
CONVERTIBLE BONDS AND NOTES (0.2%) (a)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$ 1,000 Development Bank of Singapore Structured
Note (Issued by Merrill Lynch & Co., Inc.)
3%, 2000 $ 6,068
73,000 Oversea Chinese Banking Corp.Structured
Note (Issued by Merrill Lynch & Co., Inc.)
3%, 2000 397,536
--------------
Total Convertible Preferred Stocks (cost $358,312) $ 403,604
SHORT-TERM INVESTMENTS (4.1%) (a) (cost $10,981,000)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$10,981,000 Interest in $400,000,000 joint repurchase agreement dated
March 31, 1999 with Warburg Securities due April 1, 1999
with respect to various U.S. Treasury obligations -- maturity
value of $10,982,495 for an effective yield of 4.9% $ 10,981,000
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $223,744,059) (b) $ 278,565,655
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $268,096,824.
(b) The aggregate identified cost on a tax basis is $226,214,833, resulting in gross unrealized appreciation and
depreciation of $55,203,799 and $2,852,977, respectively, or net unrealized appreciation of $52,350,822.
(NON) Non-income-producing security.
(R) Real Estate Investment Trust.
144A after the name of a security represents those exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified
institutional buyers.
ADR or GDR after the name of a foreign holding stands for American Depository Receipts and Global Depository
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 March 31, 1999 (as a percentage
of net assets):
Electronics and Electrical Equipment 26.1%
Insurance and Finance 19.9
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
March 31, 1999 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $223,744,059) (Note 1) $278,565,655
- -----------------------------------------------------------------------------------------------
Foreign currency (cost $883,586) 898,883
- -----------------------------------------------------------------------------------------------
Interest, dividends and other receivables 935,910
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,135,667
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 4,483,033
- -----------------------------------------------------------------------------------------------
Total assets 286,019,148
Liabilities
- -----------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 1,011,235
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 7,032,548
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 8,896,871
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 486,579
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 224,318
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 20,667
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,776
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 188,771
- -----------------------------------------------------------------------------------------------
Other accrued expenses 59,559
- -----------------------------------------------------------------------------------------------
Total liabilities 17,922,324
- -----------------------------------------------------------------------------------------------
Net assets $268,096,824
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $437,290,807
- -----------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (4,247,075)
- -----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (219,813,200)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 54,866,292
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $268,096,824
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($137,093,171 divided by 13,718,627 shares) $9.99
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $9.99)* $10.60
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($123,214,053 divided by 12,563,292 shares)** $9.81
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($7,789,600 divided by 786,498 shares) $9.90
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $9.90)* $10.26
- -----------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales, the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent
deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended March 31, 1999 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends $ 1,609,026
- -----------------------------------------------------------------------------------------------
Interest 234,676
- -----------------------------------------------------------------------------------------------
Total investment income 1,843,702
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,046,744
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 406,512
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 10,278
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 3,522
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 178,551
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 559,524
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 24,428
- -----------------------------------------------------------------------------------------------
Auditing 25,272
- -----------------------------------------------------------------------------------------------
Legal 2,028
- -----------------------------------------------------------------------------------------------
Postage 25,527
- -----------------------------------------------------------------------------------------------
Other 196,618
- -----------------------------------------------------------------------------------------------
Total expenses 2,479,004
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (121,180)
- -----------------------------------------------------------------------------------------------
Net expenses 2,357,824
- -----------------------------------------------------------------------------------------------
Net investment loss (514,122)
- -----------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (1,840,340)
- -----------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) (6,683,572)
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities in
foreign currencies during the period (3,472,636)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 76,087,605
- -----------------------------------------------------------------------------------------------
Net gain on investments 64,091,057
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $63,576,935
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
March 31 September 30
1999* 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Decrease in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (514,122) $ 4,508,016
- ---------------------------------------------------------------------------------------------------------------
Net realized loss on investments
and foreign currency transactions (8,523,912) (126,176,660)
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments and
assets and liabilities in foreign currencies 72,614,969 (101,196,507)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 63,576,935 (222,865,151)
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income
Class A (13,637,656) (3,446,213)
- ---------------------------------------------------------------------------------------------------------------
Class B (12,599,303) --
- ---------------------------------------------------------------------------------------------------------------
Class M (711,860) (2,733)
- ---------------------------------------------------------------------------------------------------------------
Decrease from capital share transactions (Note 4) (115,328,950) (151,334,815)
- ---------------------------------------------------------------------------------------------------------------
Total decrease in net assets (78,700,834) (377,648,912)
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 346,797,658 724,446,570
- ---------------------------------------------------------------------------------------------------------------
End of period (including distributions in excess
of and undistributed net investment income of
$4,247,075 and $23,215,866, respectively) $268,096,824 $346,797,658
- ---------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share March 31
operating performance (Unaudited) Year ended September 30
- ---------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.83 $13.58 $13.63 $13.58 $14.64 $11.55
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income --(c) .11(c) .05(c) .03(c) .02 .04
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 2.28 (4.77) .41 .63 (.63) 3.09
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.28 (4.66) .46 .66 (.61) 3.13
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net
investment income (1.12) (.09) (.43) (.60) (.04) --
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- (.08) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (.41) (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.12) (.09) (.51) (.61) (.45) (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.99 $8.83 $13.58 $13.63 $13.58 $14.64
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 27.22* (34.47) 3.47 5.02 (4.14) 27.15
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $137,093 $240,978 $515,107 $223,307 $158,773 $149,486
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .78* 1.46 1.50 1.54 1.55 1.53
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.02)* 1.05 .40 .20 .14 (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 84.65* 128.25 89.77 72.68 91.13 65.02
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the periods ended September 30, 1995, and thereafter includes amounts paid
through expense offset arrangements and brokerage service arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(d) 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
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share March 31
operating performance (Unaudited) Year ended September 30
- ---------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.68 $13.34 $13.41 $13.37 $14.53 $11.54
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.04)(c) .03(c) (.06)(c) (.07)(c) (.07) (.03)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 2.25 (4.69) .41 .63 (.64) 3.06
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.21 (4.66) .35 .56 (.71) 3.03
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net
investment income (1.08) -- (.36) (.51) (.04) --
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- (.06) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (.41) (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.08) -- (.42) (.52) (.45) (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.81 $8.68 $13.34 $13.41 $13.37 $14.53
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 26.77* (34.93) 2.66 4.33 (4.88) 26.31
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $123,214 $100,331 $199,036 $225,241 $144,514 $110,951
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.16* 2.21 2.25 2.30 2.31 2.27
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.41)* .32 (.45) (.55) (.62) (.73)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 84.65* 128.25 89.77 72.68 91.13 65.02
- ---------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the periods ended September 30, 1995, and thereafter includes amounts paid
through expense offset arrangements and brokerage service arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(d) 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
- ---------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share March 31 February 1, 1995+
operating performance (Unaudited) 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) (.03)(c) .06(c) (.02)(c) (.03)(c) (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 2.26 (4.74) .41 .63 1.13
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 2.23 (4.68) .39 .60 1.12
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net
investment income (1.11) --(d) (.40) (.58) --
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- (.07) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.11) -- (.47) (.59) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.90 $8.78 $13.46 $13.54 $13.53
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 26.72* (34.75) 2.93 4.65 9.03*
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $7,790 $5,488 $10,304 $9,144 $2,829
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.03* 1.96 2.00 2.06 2.09*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (.28)* .57 (.17) (.24) (.45)*
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 84.65* 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) The ratio of expenses to average net assets for the periods ended September 30, 1995, and thereafter includes amounts paid
through expense offset arrangements and brokerage service arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average
number of shares outstanding during the period.
(d) Distributions from net investment income amounted to less than $.01 per share.
</TABLE>
Notes to financial statements
March 31, 1999 (Unaudited)
Note 1
Significant accounting policies
Putnam Asia Pacific Growth Fund (the "fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The fund seeks capital appreciation by
investing primarily in common stocks and other securities of companies
located in Asia and in the Pacific Basin.
The fund offers class A, class B and class M shares. Class A shares are
sold with a maximum front-end sales charge of 5.75%. Class B shares, which
convert to class A shares after approximately eight years, do not pay a
front-end sales charge, but pay a higher ongoing distribution fee than
class A shares, and are subject to a contingent deferred sales charge, if
those shares are redeemed within six years of purchase. Class M shares are
sold with a maximum front-end sales charge of 3.50% and pay an ongoing
distribution fee that is lower than class B shares and higher than class A
shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
votes as a class only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by the
Trustees. Shares of each class would receive their pro-rata share of the
net assets of the fund, if the fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price on the principal market in which the securities are
traded, or, if no sales are reported -- as in the case of some securities
traded over-the-counter -- the last reported bid price. Short-term
investments having remaining maturities of 60 days or less are stated at
amortized cost, which approximates market value, and other investments are
stated at fair value following procedures approved by the Trustees. (See
Section F of Note 1 with respect to the valuation of forward currency
contracts.) Securities quoted in foreign currencies are translated into
U.S. dollars at the current exchange rate.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Investment Management, Inc. ("Putnam Management"), the fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc.. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the market
value of which at the time of purchase is required to be in an amount at
least equal to the resale price, including accrued interest. 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). 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 six months
ended March 31, 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, 1998, the fund had a capital loss carryover of
approximately $69,269,000 available to offset future capital gains, if
any. The amount of carryover and the expiration dates are:
Loss Carryover Expiration
- -------------- ------------------
$21,694,000 September 30, 2004
6,385,000 September 30, 2005
41,190,000 September 30, 2006
I) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid at least annually. The amount and character of income and gains
to be distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 0.80% of the first $500
million of average net assets, 0.70% of the next $500 million, 0.65% of
the next $500 million, 0.60% of the next $5 billion, 0.575% of the next $5
billion, 0.555% of the next $5 billion, 0.54% of the next $5 billion and
0.53% thereafter.
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.
As part of the subcustodian contract between the subcustodian bank and the
Putnam Fiduciary Trust Company (PFTC), the subcustodian bank has a lien on
the securities of the fund to the extent permitted by the fund's
investment restrictions to cover any advances made by the subcustodian
bank for the settlement of securities purchased by the fund. At March 31,
1999, the payable to the subcustodian bank represents the amount due for
cash advance for the settlement of a security purchased.
Custodial functions for the fund's assets are provided by the PFTC, a
subsidiary of Putnam Investments, Inc. Investor servicing agent functions
are provided by Putnam Investor Services, a division of PFTC.
For the six months ended March 31, 1999, fund expenses were reduced by
$121,180 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 $890 has
been allocated to the fund, and an additional fee for each Trustee's
meeting attended. Trustees who are not interested persons of Putnam
Management and who serve on committees of the Trustees receive additional
fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
in the fund and are invested in certain Putnam funds until distribution in
accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension Plan
are equal to 50% of the Trustee's average total retainer and meeting fees
for the three years preceding retirement. Pension expense for the fund is
included in Compensation of Trustees in the Statement of operations.
Accrued pension liability is included in Payable for compensation of
Trustees in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments
Inc., for services provided and expenses incurred by it in distributing
shares of the fund. The Plans provide for payments by the fund to Putnam
Mutual Funds Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the
average net assets attributable to class A, class B and class M shares,
respectively. The Trustees have approved payment by the fund to an annual
rate of 0.25%, 1.00% and 0.75% of the average net assets attributable to
class A, class B and class M shares respectively.
For the six months ended March 31, 1999, Putnam Mutual Funds Corp., acting
as underwriter received net commissions of $42,327 and $5,105 from the
sale of class A and class M shares, respectively and $140,746 in
contingent deferred sales charges from redemptions of class B shares. A
deferred sales charge of up to 1% is assessed on certain redemptions of
class A shares. For the six months ended March 31, 1999, Putnam Mutual
Funds Corp., acting as underwriter received $19,433 on class A
redemptions.
Note 3
Purchase and sales of securities
During the six months ended March 31, 1999, purchases and sales of
investment securities other than short-term investments aggregated
$226,542,775 and $363,464,360, respectively. There were no purchases and
sales of U.S. government obligations. In determining the net gain or loss
on securities sold, the cost of securities has been determined on the
identified cost basis.
Note 4
Capital shares
At March 31, 1999, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
March 31, 1999
- -------------------------------------------------------------------------
Class A Shares Amount
- -------------------------------------------------------------------------
Shares sold 28,015,283 $ 263,540,349
- -------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,316,466 11,848,489
- -------------------------------------------------------------------------
29,331,749 275,388,838
Shares
repurchased (42,908,082) (400,944,399)
- -------------------------------------------------------------------------
Net decrease (13,576,333) $(125,555,561)
- -------------------------------------------------------------------------
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)
- -------------------------------------------------------------------------
Six months ended
March 31, 1999
- -------------------------------------------------------------------------
Class B Shares Amount
- -------------------------------------------------------------------------
Shares sold 3,791,168 $ 35,037,310
- -------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,235,619 10,947,581
- -------------------------------------------------------------------------
5,026,787 45,984,891
Shares
repurchased (4,025,859) (37,154,036)
- -------------------------------------------------------------------------
Net increase 1,000,928 $ 8,830,855
- -------------------------------------------------------------------------
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)
- -------------------------------------------------------------------------
Six months ended
March 31, 1999
- -------------------------------------------------------------------------
Class M Shares Amount
- -------------------------------------------------------------------------
Shares sold 899,251 $ 8,228,254
- -------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -------------------------------------------------------------------------
899,251 8,228,254
Shares
repurchased (737,727) (6,832,498)
- -------------------------------------------------------------------------
Net increase 161,524 $ 1,395,756
- -------------------------------------------------------------------------
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)
- -------------------------------------------------------------------------
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
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
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Paul Warren
Vice President and Fund Manager
Carmel Peters
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Asia Pacific
Growth Fund. It may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details of sales
charges, investment objectives, and operating policies of the fund, and
the most recent copy of Putnam's Quarterly Performance Summary. For more
information or to request a prospectus, call toll free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site:
http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
www.putnaminv.com
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
SA001 51841 844/193/470 5/99
