<PAGE>
Putnam
Research
Analysts
Fund
ANNUAL REPORT
August 31, 1994
[Putnam Logo]
BOSTON*LONDON*TOKYO
<PAGE>
<PAGE>
Performance highlights
"Large fund outfits have good reason to pass along the best
ideas, especially in small stocks, to their infant funds. . . .
A winning stock trade that is small in dollars can be big in
percentages at a tiny fund."
- -- Forbes, August 29, 1994
Performance should always be considered in light of a fund's
investment strategy. Putnam Research Analysts Fund is designed
for investors seeking capital appreciation primarily through
investments in common stocks.
FISCAL 1994 RESULTS AT A GLANCE
Total return: NAV POP
12 months ended 8/31/94 2.17% -3.69%
(change in value during
period plus reinvested distributions)
Share value: NAV POP
8/31/93 $10.03 $10.64
8/31/94 9.78 10.38
Capital gains
Distributions: Number Income Long- Short- Total
term term
1 -- -- $0.46 $0.46
Performance data represent past results. For performance over
longer periods, see pages 8 and 9. POP assumes 5.75% maximum
sales charge.
<PAGE>
<PAGE>
From the Chairman
Dear Shareholder:
By the time you receive this report, 1994 will be well into the
final quarter of what is proving to be anything but a quiet year
on the investment front. The stock market, where your fund
concentrates virtually all of its attention, has been especially
erratic, with unmistakable effects on fund performance for the 12
months ended August 31, 1994.
The markets' response to a series of increases in short-term
interest rates by the Federal Reserve Board has dominated the
headlines in the financial press since February. Stocks drifted
steadily lower during the period, finally showing some signs of
life as September approached.
Continued volatility, rather than a new sustained rise, is the
probable course for stocks over the months immediately ahead. The
Fed will likely continue its tight rein on credit until it is
convinced that the economy's growth has achieved a sustainable
rate and inflation fears have been put to rest.
I am pleased to announce that Patrick O'Donnell recently took
over management of Putnam Research Analysts Fund. With 16 years
investment experience and an extensive background in domestic and
international equity research operations, he joined Putnam as
Managing Director and Director of Equity Research. We welcome
him aboard.
Respectfully yours,
[signature of George Putnam]
George Putnam
Chairman of the Trustees
October 19, 1994<PAGE>
<PAGE>
Report from the fund manager
Patrick O'Donnell, lead manager
Although Putnam Research Analysts Fund turned in a strong
performance during the first half of its fiscal year, volatility
during the second half dampened overall performance. With a total
return of 2.17%, the fund lagged the Standard & Poor's 500_ Index
but was ahead of the negative performance shown by many other
stock funds for the same period.
THE MARKET: ANTICIPATING INTEREST RATES
The fund's strategy focuses on individual companies whose
potential has yet to be "discovered" by Wall Street. Our goal is
to invest in stocks with the potential for outstanding
appreciation and to hold them for a reasonable period. The value
of this approach is apparent in the fund's overall total return
since its inception on November 3, 1992: nearly 21%, compared
with the S & P 500's return of 18.93% for the same period.
Additional performance information can be found on pages 8 and 9.
INDUSTRY CONSOLIDATIONS AND INDIVIDUAL
SUCCESS STORIES
Some of the fund's strongest-performing holdings during the past
six months have benefited from consolidations in the defense and
health care industries. As companies seek partners for added
strength and expanded product lines, each merger reflects
favorably on other companies in that sector. The merger
intentions of defense giants Lockheed and Martin Marietta
recently enhanced the value of the fund's defense holdings, while
ongoing mergers in health care have had a similar effect on
holdings in this sector.
Since our last report, Wall Street has come to favor what were
two of our largest holdings by bidding up the prices of QVC
Network, Inc., and Whirlpool Corporation. In both cases, we
locked in some very handsome gains for the fund by selling these
stocks.
<PAGE>
<PAGE>
Among positions the fund still holds, Philip Morris, after
announcing a 20% dividend increase and a major buyback,
experienced substantial price appreciation. General Motors, which
constitutes the fund's third largest single holding, continues to
reward investors with increased earnings. One of the fund's
largest holdings, railroad giant Burlington Northern,
has maintained revenue growth mainly because of its access to
environmentally friendly low-sulfur coal.
ANALYSTS' EXPERTISE IS KEY TO PERFORMANCE
Successful stock selection depends on the expertise of Putnam's
analysts. When analysts recommend a new stock for purchase, they
draw on a thorough knowledge of the industry and market served by
the company, often based on invaluable personal experience.
For example, Analyst Lisa Heitman, a petroleum engineer as well
as an MBA and a fluent French speaker, recommended the purchase
of Total Corp., S.A., an international oil company based in
France. She found much to like about Total, especially the fact
that, by increasing production of both oil and gas, the company
has maintained earnings through rising volume and is therefore
likely to be less sensitive to price shifts than a number of
other energy-related companies.
Coca-Cola's Co.'s prospects for growth in international sales was
the key factor in another recommendation. Analyst Michael Nance,
who has an extensive background in consumer packaged products,
sees potential for "hypergrowth" in Coke's volume of per-capita
sales in such markets as China and India. About 10% to 12%
of the company's total sales currently comes from this area.
TOP INDUSTRY SECTORS (8/31/94)*
Insurance and finance 10.4%
Automotive 8.6%
Oil and gas 8.2%
Consumer nondurables 6.6%
Health care 5.9%
* Based on a percentage of net asets
<PAGE>
<PAGE>
Another analyst, Michael Weinstein, has worked as an exploration
and development consultant to the mining industry. His
recommendation: Freeport-McMoRan Copper and Gold Inc. class A, a
New Orleans mining company. Freeport holds a contract for work on
nine million acres in Indonesia, the site of some of the world's
richest mineral reserves. With rapid development in China and
India, there is likely to be a tremendous need for copper and
gold, so the location of this particular development site could
prove enormously advantageous for the company.
Real Estate Investment Trusts (REITs) are a new sector for the
fund. While REITs were once designed primarily to take advantage
of tax laws, current REITs are professionally managed public
companies with access to capital. Karen Korn, Putnam's REIT
specialist, recommended Ohio-based Glimcher Realty Trust, the
owner, developer, and operator of more than 12 million square
feet of shopping space in high-growth areas. Karen's background
in corporate finance and retail operations enabled her to discern
that the company, which is backed by a strong balance sheet and
increasing volume, shows excellent growth potential.
LOOKING AHEAD: THE WHOLE WORLD OF STOCKS
Looking ahead, we anticipate that growth in the United States,
though maintaining a steady pace, may well be surpassed by growth
in other parts of the world. Furthermore, we consider that the
competitiveness of U.S. companies overseas is one of the
least-analyzed aspects of their performance potential. Increasing
our coverage in this area will be an important focus for fiscal
1995.
We are also expanding our coverage of several industry areas a
bit closer to home. These areas include industries where
individual companies have recently demonstrated exceptional
performance potential, such as telecommunications equipment and
services, pharmaceuticals, and hospital/medical services. At the
same time, we are expanding the team of analysts, ensuring that
we have both the resources and the in-house expertise to target
additional opportunities for the fund.
<PAGE>
<PAGE>
TOP 10 HOLDINGS (8/31/94)
Exxon Corp.
Oil and oil-related services
Total Corp. S.A. ADS
Oil and oil-related services
General Motors Corp.
Automobiles
Philip Morris Cos., Inc.
Cigarettes, processed foods, beer
Premark International, Inc.
Food equipment, consumer products, plastics (Tupperware)
Sprint Corp.
Telecommunications holding company
Lowe's Cos., Inc.
Retailer of building materials, lumber, hardware
Burlington Northern, Inc.
Railroad company
Caterpillar, Inc.
World's largest manufacturer of earthmoving machinery
Motorola, Inc.
Semiconductors, paging equipment, and cellular phones
These holdings represent 20.0% of the fund's assets.
Portfolio holdings are subject to change.
Our analysts' criteria for American companies also reflects our
belief that growth overseas will outpace growth at home.
Generally, if a company doesn't demonstrate the potential for
expanding beyond the United States, it would not be likely to
make it into the portfolio.
With the continued diligence of Putnam's analysts and their
thorough and exhaustive research, we believe our search for
undervalued yet rewarding investment opportunities should enable
shareholders to benefit in the new fiscal year, and beyond.
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 August 31, 1994,
there is no guarantee the fund will continue to hold these
securities in the future.
<PAGE>
<PAGE>
Performance summary
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's
shares changed over time, assuming you held the shares through
the entire period and reinvested all distributions back into the
fund. We show total return in two ways: on a cumulative long-term
basis and on average how the fund might have grown each year over
varying periods. For comparative purposes, we show how the fund
performed relative to appropriate indexes and benchmarks.
TOTAL RETURN FOR PERIODS ENDED 8/31/94
Standard & Consumer
NAV POP Poor's 500 Index Price Index
1 year 2.17% -3.69% 5.51% 2.90%
Life-of-fund
(since 11/3/92) 20.97 14.00 18.93 5.08
Annual average 10.96 7.42 9.93 2.74
TOTAL RETURN FOR PERIODS ENDED 9/30/94
(most recent calendar quarter)
NAV POP
1 year -0.64% -6.32%
Life-of-fund
(since 11/3/92) 18.00 11.20
Annual average 9.05 5.71
Fund performance data do not take into account any
adjustment for taxes payable on reinvested distributions.
Performance data represent past results. Investment returns and
net asset value will fluctuate so an investor's shares, when
sold, may be worth more or less than their original cost.
<PAGE>
<PAGE>
GROWTH OF A $10,000 INVESTMENT
[line graph]
Fund shares at POP........
Standard & Poor's
500 Index---------------
Consumer Price Index ******
Plot points:
date/year Fund at S & P's Consumer
POP 500 Index Price Index
11/3/92 9,425 10,000 10,000
2/28/93 9,890 10,632 10,092
8/31/93 11,158 11,272 10,212
2/28/94 11.691 11,514 10,346
8/31/94 11,400 11,893 10,508
Past performance is no assurance of future results.
TERMS AND DEFINITIONS
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not including any initial or contingent deferred sales
charge.
Public offering price (POP) is the price of a mutual fund share
plus the maximum sales charge levied at the time of purchase. POP
performance figures shown here assume the maximum 5.75% sales
charge.
COMPARATIVE BENCHMARKS
Standard & Poor's 500 Index is an unmanaged list of common stocks
that is frequently used as a general measure of stock market
performance. The index assumes reinvestment of all distributions
and does not take into account brokerage commissions or other
costs. The fund's portfolio contains securities that do not match
those in the index.
Consumer Price Index (CPI) is a commonly used measure of
inflation; it does not represent an investment return.
<PAGE>
<PAGE>
Report of Independent Accountants
For the Year Ended August 31, 1994
To the Trustees and Shareholders of Putnam Research Analysts Fund
We have audited the accompanying statement of assets and
liabilities of Putnam Research Analysts Fund, including the
portfolio of investments owned, as of August 31, 1994, the
related statement of operations for the year then ended, and the
statement of changes in net assets and the "Financial Highlights"
for the year then ended, and for the period November 3, 1992
(commencement of operations) to August 31, 1993.
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 audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the 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 August 31, 1994, 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 audits provide 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 Research Analysts Fund
as of August 31, 1994, the results of its operations for the year
then ended and the changes in its net assets and the "Financial
Highlights" for the year then ended, and for the period November
3, 1992 (commencement of operations) to August 31, 1993 in
conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
October 14, 1994
<PAGE>
<PAGE>
Portfolio of investments owned
August 31, 1994
Common Stocks (98.4%)(a)
Number of Shares Value
Insurance and Finance (10.4%)
1,000 Beneficial Corp. $43,000
1,200 Citicorp 53,100
1,200 Comerica Inc. 36,450
1,500 Equitable Cos., Inc. 32,063
600 Federal National
Mortgage Association 53,325
1,000 Lincoln National Corp. 38,500
1,000 NWNL Companies, Inc. 31,500
1,200 National City Corp. 32,250
2,200 USF&G Corp. 29,700
349,888
Automotive(8.6%)
1,100 A.P.S. Holding Corp.(b) 28,600
800 Chrysler Corp. 38,500
880 Daimler Benz AKT-ADR(c) 46,640
1,200 Ford Motor Co. 35,100
1,500 General Motors Corp. 75,375
1,900 MascoTech, Inc. 28,025
1,000 Varity Corp.(b) 37,750
289,990
Oil and Gas(8.2%)
800 Chevron Corp. 33,900
1,500 Exxon Corp. 89,250
700 Kerr-McGee Corp. 34,038
400 Mobil Corp. 33,700
2,800 Total Corp. ADS(c) 83,650
274,538
Consumer Non Durables(6.6%)
500 Avon Products, Inc. 29,562
800 Dial Corp. (The) 18,800
1,400 Gymboree Corp.(b) 35,700
1,200 Philip Morris Cos., Inc. 73,200
1,400 Premark International, Inc. 63,350
220,612
Health Care(5.9%)
1,500 Baxter International Inc. 42,563
500 Bristol-Myers Squibb Co. 28,750
550 Pfizer, Inc. 37,538
1,000 Roberts Pharmaceutical Corp.(b) 33,750
500 Schering-Plough Corp. 34,938
600 Stryker Corp. 21,300
198,839
<PAGE>
Common Stocks (continued)
Number of Shares Value
Electronics and Electrical Equipment(4.8%)
1,000 General Electric Co. $ 49,750
400 Intel Corp. 26,300
1,000 Motorola, Inc. 54,000
400 Texas Instruments, Inc. 31,150
161,200
Retail(4.6%)
800 Fred Meyer, Inc.(b) 26,600
1,000 Gap, Inc. 43,000
1,600 Lowe's Cos., Inc. 57,800
1,200 TJX Cos., Inc. (The) 26,100
153,500
Basic Industrial Products(4.5%)
500 Caterpillar Inc. 57,750
500 Hercules Inc. 53,875
800 Sundstrand Corp. 39,800
151,425
Transportation(4.5%)
1,100 Burlington Northern Inc. 57,750
1,000 Illinois Central Corp. 31,500
700 Landstar System, Inc.(b) 22,050
1,600 TNT Freightways Corp. 38,800
150,100
Utilities(4.3%)
1,000 GTE Corp. 31,750
900 Pacific Telesis Group 29,700
1,500 Sprint Corp. 59,438
400 Telefonos de Mexico S.A.,
Ser. L, ADR(c) 25,100
145,988
Business Equipment and Services(4.3%)
600 BMC Software, Inc.(b) 26,025
700 EMC Corp.(b) 12,600
1,600 Moore Corp. Ltd. 30,600
1,000 Sybase, Inc.(b) 43,500
750 Tandy Corp. 30,188
142,913
Consumer Services(4.0%)
600 Dun & Bradstreet Corp. 34,575
1,500 Infinity Broadcasting Corp.
Class A(b) 47,250
1,000 Mirage Resorts, Inc.(b) 21,125
1,000 Times Mirror Co. Class A 32,875
135,825<PAGE>
<PAGE>
Common Stocks (continued)
Number of Shares Value
Chemicals(3.5%)
1,100 Grace (W.R.) & Co. $ 44,275
500 Monsanto Co. 41,313
1,000 Witco Chemical Corp. 30,750
116,338
Aerospace and Defense(3.3%)
1,500 Coltec Holdings Inc.(b) 28,125
400 McDonnell Douglas Corp. 47,300
1,000 Rockwell International Corp. 36,125
111,550
Conglomerates(2.9%)
500 ITT Corp. 41,000
600 Tenneco Inc. 29,550
500 Textron, Inc. 27,625
98,175
Metals and Mining(2.2%)
2,000 Freeport-McMoRan
Copper and Gold, Inc. Class A 46,250
2,100 INDRESCO, Inc.(b) 27,825
74,075
Finance(2.1%)
900 First USA, Inc. 32,962
1,500 MBNA Corp. 37,874
70,836
Building and Construction(1.4%)
1,000 Armstrong World
Industries, Inc. 48,750
Food and Beverages(1.4%)
1,000 Coca-Cola Co. 46,000
Business Equipment(1.3%)
1,800 Cisco Systems, Inc.(b) 44,663
Computer Services/software(1.3%)
1,000 Oracle Systems Corp.(b) 42,688
Cellular Broadcasting(1.2%)
1,400 DSC Communications Corp.(b) 40,075
Forest Products(1.1%)
500 International Paper Co. 38,562
Consumer Services(1.1%)
900 Disney (Walt) Productions Inc. 37,012 <PAGE>
Communications(1.0%)
1,400 MCI Communications Corp. 34,037
Business Services(1.0%)
1,000 Harcourt General, Inc. 33,750
Common Stocks (continued)
Number of Shares Value
Real Estate(1.0%)
1,500 Glimcher Realty Trust $32,062
Telecommunications(0.8%)
900 Airtouch Communications,
Inc.(b) 25,424
Broadcasting(0.7%)
1,000 Tele-Communications
Class A(b) 22,563
Specialty Consumer Products(0.4%)
1,100 Drypers Corp.(b) 14,300
Total Common Stocks
(cost $2,995,195) $3,305,678
Short-Term Investments (0.9%)(a)(cost $31,004)
Principal Amount Value
$ 31,000 Interest in $300,000,000 joint
repurchase agreement dated
August 31, 1994 with Bankers
Trust Co., Inc., due
September 1, 1994 with respect
to various U.S. Treasury obligations -
maturity value of $31,004 for an
effective yield of 4.79% $ 31,004
Total Investments
(cost $3,026,199)(d) $ 3,336,682
<PAGE>
(a) Percentages indicated are based on total net assets of
$3,358,362, which correspond to a net asset value per share of
$9.78.
(b) Non-income-producing security.
(c) Securities whose value is determined or significantly
influenced by trading on exchanges not in the United States or
Canada. ADR or ADS after the name of foreign holding stands for
American Depository Receipt or American Depository Shares,
respectively, representing ownership of foreign securities on
deposit with a domestic custodian bank.
(d) The aggregate identified cost for federal income tax purposes
is $3,026,199, resulting in gross unrealized appreciation and
depreciation of $414,563 and $104,080, respectively, or net
unrealized appreciation of $310,483.
The accompanying notes are an integral part of these financial
statements.
<PAGE>
<PAGE>
Statement of assets and liabilities
August 31, 1994
Assets
Investments in securities, at value
(identified cost $3,026,199)
(Note 1) $3,336,682
Dividends receivable 8,961
Receivable for securities sold 64,774
Receivable for shares of the fund sold 70
Unamortized organization expenses (Note 1) 11,126
Total assets $ 3,421,613
Liabilities
Payable to subcustodian bank (Note 3) $ 21,450
Payable for compensation of Manager (Note 3) 12,607
Payable for compensation of Trustees (Note 3) 23
Payable for administrative services (Note 3) 7
Payable for investor servicing and
custodian fees (Note 3) 3,079
Payable for distribution fees (Note 3) 1,371
Payable for organization expense (Note 1) 17,552
Other accrued expenses 7,162
Total liabilities 63,251
Net assets $3,358,362
Represented by
Paid-in capital (Notes 1, 5 and 6) $2,929,192
Undistributed net investment income
(Notes 1 and 6) 3,141
Accumulated net realized gain on
investment (Note 6) 115,546
Net unrealized appreciation of investments 310,483
Total - Representing net assets applicable to
capital shares outstanding $3,358,362
Computation of net asset value and offering price
Net asset value and redemption price per share
($3,358,362 divided by 343,229 shares) $9.78
Offering price per share (100/94.25 of $9.78)* $10.38
* 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.
The accompanying notes are an integral part of these financial
statements.
<PAGE>
<PAGE>
Statement of operations
For the year ended August 31, 1994
Investment income
Dividends (net of foreign tax of $351) $58,061
Interest 120
Total investment income 58,181
Expenses:
Compensation of Manager (Note 3) 22,227
Investor servicing and custodian fees (Note 3) 17,217
Compensation of Trustees (Note 3) 82
Reports to shareholders 1,561
Auditing 1,276
Legal 13,866
Postage 184
Distribution fees (Note 3) 8,537
Administrative services (Note 3) 40
Amortization of organization expenses (Note 1) 3,511
Fees waived by Manager (Note 3) (10,480)
Total expenses 58,021
Net investment income 160
Net realized gain on investments (Note 4) 213,003
Net unrealized depreciation of investments
during the period (141,234)
Net gain on investments 71,769
Net increase in net assets resulting
from operations $71,929
The accompanying notes are an integral part of these financial
statements.
<PAGE>
<PAGE>
Statement of changes in net assets
For the period
November 3, 1992
(commencement of
Year ended operations) to
August 31 August 31
1994 1993*
Increase (decrease) in net assets
Operations:
Net investment income $ 160 $ 5,941
Net realized gain on investments 213,003 62,302
Net unrealized appreciation (depreciation)
on investments (141,234) 451,717
Net increase in net assets resulting
from operations 71,929 519,960
Distributions to shareholders from:
net investment income -- (8,932)
net realized gain on investments (159,512) --
Increase (decrease) from capital share
transactions (Note 5) (70,951) 905,599
Total increase (decrease) in net assets (158,534)1,416,627
Net Assets
Beginning of year 3,516,896 2,100,269
End of year (including undistributed and
distributions in excess of net investment
income of $3,141 and $2,722,
respectively $3,358,362 $3,516,896
*See Note 2
The accompanying notes are an integral part of these financial
statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
(For a share outstanding throughout the period)
For the period
November 3, 1992
Year ended (commencement
August 31 of operations) to
1994 August 31, 1993
<S> <C> <C>
Net asset value, beginning of period $10.03 $8.50
Investment Operations:
Net investment income -- .02(a)(b)
Net realized and unrealized gain on investments .21 1.54
Total from Investment Operations .21 1.56
Less Distributions from:
Net investment income -- (.03)
Net realized gain on investments (.46) --
Total Distributions (.46) (.03)
Net asset value, end of period $9.78 $10.03
Total investment return at net asset value (%) (c) 2.17 18.41(d)
Net assets, end of period (in thousands) $3,358 $3,517
Ratio of expenses to average net assets (%) 1.70(b) 1.42(b)(d)
Ratio of net investment income
to average net assets (%) -- 0.16(b)(d)
Portfolio turnover (%) 83.96(d) 87.76(d)
<PAGE>
*See Note 2
(a) Per share net investment for the period ended August 31,
1993, have been determined on the basis of the weighted average
number of shares outstanding during the period.
(b) Reflects a voluntary expense limitation during the period.
As a result of such limitation, expenses of the fund for the
periods ended August 31, 1994 and August 31, 1993, reflect a
reduction of approximately $0.02 and $0.05 per share,
respectively. See Note 3.
(c) Total investment return assumes dividend reinvestments and
does not reflect the effect of sales charges.
(d) Not annualized.
/TABLE
<PAGE>
<PAGE>
Notes to financial statements
August 31, 1994
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940,
as amended, as a diversified open-end management investment
company. The fund seeks capital appreciation by investing
primarily in common stocks recommended by Putnam Investment
Management, Inc.'s (Putnam Management) Equity Research Group.
The following is a summary of significant accounting policies
followed by the fund in the preparation of its financial
statements. The policies are in conformity with generally
accepted accounting principles.
A Security valuation Investments for which market quotations
are readily available are stated at market value, which is
determined using the last reported sale price, or, if no sales
are reported - as in the case of some securities traded
over-the-counter - the last reported bid price, except that
certain U.S. government obligations are stated at the mean
between the bid and asked prices. Short-term investments having
remaining maturities of 60 days or less are stated at amortized
cost, which approximates market value, and other investments are
stated at fair value following procedures approved by the
Trustees.
B Joint trading account Pursuant to an exemptive order issued
by the Securities and Exchange Commission the fund may transfer
uninvested cash balances into a joint trading account, along with
the cash and certain accounts of other registered investment
companies managed by Putnam Management, 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. The fund's Manager is
responsible for determining that the value of these underlying
securities is at all times at least equal to the resale price,
including accrued interest.
<PAGE>
D Security transactions and related investment income
Security transactions are accounted for on the trade date (date
the order to buy or sell is executed). Interest income is
recorded on the accrual basis and dividend income is recorded on
the ex-dividend date, except that certain dividends from foreign
securities are recorded as soon as the fund is informed of the
ex-dividend date.
E Federal income taxes It is the policy of the fund to
distribute all of its income within the prescribed time and
otherwise comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies. It is also the
intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal
Revenue Code of 1986. Therefore, no provision has been made for
federal taxes on income, capital gains or unrealized appreciation
of securities held and excise tax on income and capital gains.
<PAGE>
<PAGE>
F Distributions to shareholders Distributions to shareholders
are recorded by the fund on the ex-dividend date. The amount and
character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences
include treatment of organizational expense. 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
August 31, 1994, the fund reclassified $2,981 to decrease
distributions in excess of net investment income and $2,981 to
decrease paid-in capital.
G Unamortized organization expenses Expenses incurred by the
fund in connection with its organization, its registration with
the Securities and Exchange Commission and with various state and
the initial public offering of its shares aggregated $17,552
These expenses are being amortized by the fund on a straight-line
basis over a five-year period.
Note 2
Initial capitalization and offering of shares
The fund was established as a Massachusetts business trust under
the laws of The Commonwealth of Massachusetts on July 29, 1992.
During the period July 29, 1992 to November 2, 1992, the fund had
no operations other than those related to organizational matters,
including the initial capital contribution of $100,000 and the
issuance of 11,765 shares to Putnam Mutual Funds Corp., a wholly
owned subsidiary of Putnam Investments, Inc. on September 24,
1992. On November 2, 1992, Putnam Mutual Funds Corp., a
wholly-owned subsidiary of Putnam Investment Inc., made a
subsequent capital contribution of $2,000,000 and received
235,294 shares. During the period September 24, 1993 to November
2, 1992, invested initial capital resulted in interest income of
$269. There were no additional transactions until regular
investment operations commenced on November 3, 1992. At August
31, 1994, Putnam Mutual Funds Corp. owned 271,465 shares of the
fund valued at $2,654,928.
Note 3
Management fee, administrative services, and other transactions
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net
assets of the fund for the quarter. Such fee is based on the
following annual rates: 0.65% of the first $500 million of
average net assets, 0.55% of the next $500 million, 0.5% of the
next $500 million, and 0.45% of any amount over $1.5 billion,
subject, under current law to reduction in any year to the extent
that expenses (exclusive of distribution fees, brokerage,
interest and taxes) of the fund exceed 2.5% of the first $30
million of average net assets, 2.0% of the next $70 million and
1.5% of any amount over $100 million and by the amount of certain
brokerage commissions and fees (fewer expenses) received by
affiliates of the Manager on the fund's portfolio transactions.
The Manager has voluntarily agreed to reduce its compensation
through March 31, 1995, to the extent that expenses of the fund
exceed 1.5% of the fund's average net assets. The fund's expenses
subject to this limitation were exclusive of brokerage, interest,
taxes, insurance, amortization of deferred organization expenses
and extraordinary expenses, if any, and expenses incurred under
the fund's distribution plan described below. This limitation was
accomplished by a reduction of the compensation payable under the
management contract to the Manager. As a result of the voluntary
limitation, expenses for the year ended August 31, 1994 were
reduced by $10,480.
<PAGE>
<PAGE>
The fund also reimburses the Manager for the compensation and
related expenses of certain officers of the fund and their staff
who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the
Trustees. For the year ended August 31, 1994, the fund incurred
$40 for these services.
Trustees of the fund receive an annual Trustee's fee of $100 and
an additional fee for each Trustees' meeting attended. Trustees
who are not interested persons of the Manager and who serve on
committees of the Trustees receive additional fees for attendance
at certain committee meetings.
Custodial functions for the fund's assets are being provided by
Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam
Investments, Inc. Investor servicing agent functions were
provided by Putnam Investor Services, a division of PFTC. Fees
paid for these investor servicing and custodial functions for the
year ended August 31, 1994 amounted to $17,217.
Investor servicing and custodian fees reported in the Statement
of operations for the year ended August 31, 1994 have been
reduced by credits allowed by PFTC. Such credits amounted to
$5,326.
As part of the custodial contract between Putnam Fiduciary Trust
Company and the subcustodian bank, the subcustodian 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 for the settlement of securities purchased by the
fund. At August 31, 1994, the payable to subcustodian represents
the amount due for cash advanced for the settlement of a security
purchase.
Pursuant to the fund's underwriting agreement and to a
distribution plan adopted under Rule 12b-1 of the Investment
Company Act of 1940, the fund pays Putnam Mutual Funds Corp. a
quarterly distribution fee at the annual rate of .25% of the
average net asset value of shares of the fund attributable to
qualifying investment dealers of record for fund shareholders.
The fund also pays Putnam Mutual Funds Corp. for certain
additional expenses related to shareholder services and the
distribution of shares, subject to the overall limitation that
payments under the plan shall not exceed a maximum annual rate of
0.25% of the fund's average net assets. For the year ended August
31, 1994, the fund paid $8,537 in distribution fees.
During the year ended August 31, 1994, Putnam Mutual Funds Corp.,
acting as the underwriter, received no net commissions from the
sale of shares of the fund.
<PAGE>
<PAGE>
Note 4
Purchases and sales of securities
During the year ended August 31, 1994, purchases and sales of
investment securities other than short-term investments
aggregated $2,746,882 and $2,860,297, respectively. There were no
purchases or sales of U.S. government obligations during the
period. In determining the net gain or loss on securities sold,
the cost of securities has been determined on the identified cost
basis.
<PAGE>
<TABLE>
<CAPTION>
Note 5
Capital shares
At August 31, 1994, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares
were as follows:
For the period
November 3, 1992
Year ended (commencement of
August 31 operations) to
1994 August 31, 1993
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 15,366 $153,061 122,906 $1,081,779
Shares issued in connection with
reinvestment of distributions 16,560 159,476 1,020 8,914
31,926 312,537 123,926 1,090,693
Shares repurchased (39,248) (383,488) (20,434) (185,094)
Net increase (decrease) (7,322) $(70,951) 103,492 $905,599
/TABLE
<PAGE>
Note 6
Reclassification of Capital Accounts
Effective September 1, 1993, Putnam Research Analysts Fund has
adopted the provisions of Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation
of Income, Capital Gain and Return of Capital Distributions by
Investment Companies (SOP)." The purpose of this SOP is to
report the accumulated net investment income (loss) and
accumulated net realized gain (loss) accounts in such manner as
to approximate amounts available for future tax distributions (or
to offset future realized capital gains), and to achieve
uniformity in the presentation of distributions by the investment
companies.
As a result of the SOP, the fund has reclassified $2,722 to
decrease distributions in excess of net investment income, $247
to decrease accumulated net realized gain on investments, with a
decrease of $2,475 to additional paid-in capital.
These reclassifications represent the cumulative amounts
necessary to report these balances through August 31, 1993, the
close of the fund's prior fiscal year-end, for financial
reporting and tax purposes.
<PAGE>
<PAGE>
Federal tax information
For the fiscal year ended August 31, 1994, the fund made
distributions of $0.46 per share from short-term capital gains,
constituting "dividend income" for federal income tax purposes.
The fund has designated 54.27% of the investment income as
qualifying for the dividend-received deduction for corporations.
The Form 1099 you will receive in January 1995 will show you, for
income tax purposes, the tax status of all distributions paid to
your account in calendar 1994.
If you're a shareholder in an IRA or other tax-sheltered
retirement plan, this statement is for information only and will
serve as a record of distributions reinvested in your account
during the fiscal year. Money invested in these plans generally
is not subject to federal income tax until you withdraw it.
As required by law, your fund reports to the Internal Revenue
Service on a calendar year basis the amount of distributions paid
to each shareholder.
<PAGE>
<PAGE>
Fund information
INVESTMENT
MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
TRUSTEES
George Putnam, Chairman
William Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Nicholas Thorndike
<PAGE>
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John R. Verani
Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Patrick O'Donnell
Vice President
and Fund Manager
Richard England
Vice President
William N. Shiebler
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Vice President
and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information
of shareholders of Putnam Research Analysts 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, operating policies of the
fund and the most recent Putnam Quarterly Performance Summary.
888-14158<PAGE>
APPENDIX TO FORM N30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN
PRINTED AND EDGAR-FILED TEXTS:
(1) Rule lines for tables are omitted.
(2) Boldface and italic typefaces are displayed in normal type.
(3) Headers (e.g, the name of the fund) and footers (e.g., page
numbers) are omitted.
(4) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(5) Bullet points and similar graphic signals are omitted.
(6) Page numbering is different.
