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Putnam
Research
Analysts
Fund
Semiannual
Report
February 28, 1994
For investors seeking capital appreciation primarily through
investments in common stocks recommended by the analysts in the
Equity Research Group of Putnam Investment Management
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
6 Report of Independent Accountants
7 Portfolio of investments owned
9 Financial statements
18 Fund performance supplement
A member
of the Putnam
Family of Funds<PAGE>
How your
fund performed
For periods ended February 28, 1994
S&P Consumer
Total return* Fund 500(R) Price
NAV POP Index Index
6 months 4.78% -1.23% 2.12% 1.31%
1 year 18.21 11.44 8.28 2.51
Life-of-fund 24.06 16.91 15.15 3.45
(since 11/3/92)
annualized 17.60 12.46 11.19 2.59
Share data NAV POP
August 31, 1993 $10.03 $10.64
February 28, 1994 $10.03 $10.64
Distributions
Investment Short-term
Period ended Number income capital gains Total
February 28, 1994 1 -- $0.46 $0.46
Total return at end of most recent calendar quarter
Periods ended March 31, 1994
Cumulative Annualized
NAV POP NAV POP
1 year 7.51% 1.35% -- --
Life-of-fund
(since 11/3/92) 16.89 10.15 11.70% 7.10%
* Performance data represent past results and reflect an expense
limitation currently in effect. Without the limitation, total
return and yield would have been lower. Investment return and net
asset value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
Terms you need to know
Total return is the change in value of an investment from the
beginning to the end of a period, assuming the reinvestment of
all distributions.
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not reflecting any sales charge.
Public offering price (POP) is the price of a mutual fund share
plus the fund's 5.75% maximum sales charge levied at the time of
purchase.
Please see the fund performance supplement on page 18 for
additional information about performance comparisons.
<PAGE>
From the
Chairman
Dear Shareholder:
I am pleased to report that Putnam Research Analysts Fund is off
to a solid start for fiscal 1994. The fund's unique,
research-intensive approach to stock selection delivered total
return performance at net asset value that was more than double
the return of the Standard & Poor's 500 Index for the six months
ended February 28, 1994.
Unlike other Putnam equity funds that follow a specific
investment discipline such as value or emerging growth investing,
this fund focuses on important themes or industry trends within
the entire spectrum of stocks. Richard England, who was named
lead manager of the fund effective April 1st, will be working
closely with a team of 15 equity research analysts to identify
small-, medium-, and large- capitalization companies that offer
the greatest growth potential within each industry group. Richard
has been with Putnam since 1992 and previously was an investment
officer at Aetna Equities.
During the semiannual period, the fund's preference for
industrial and consumer-oriented cyclical stocks proved
advantageous. These companies, whose prospects are closely tied
to the growth of the economy, are experiencing improved earnings
and rising stock prices -- favorably impacting the fund's net
asset value.
In recent months, the U.S. economy and financial markets have
been influenced by a continuing recovery and reactions to
President Clinton's legislative initiatives. Many of these
proposals, particularly the higher tax rates enacted in 1993 and
the ongoing debates over health care and welfare reform and
reduction of the federal budget deficit have made stock market
forecasting more challenging.
Putnam Management stands ready, as always, to fine-tune the
fund's portfolio in response to the ever-changing economy and
stock market. As the fund enters the second half of fiscal 1994,
we believe its unique strategy, coupled with the experience and
resources of Putnam's equity research team, should continue to
reward shareholders.
Respectfully yours,
(signature of George Putnam)
George Putnam
April 20, 1994
<PAGE>
Report from
Putnam Management
In light of the strengthening economy, Putnam Research Analysts
Fund's focus on the industrial and consumer-oriented cyclical
stocks has been a particularly effective strategy. This
investment orientation made a major contribution to the fund's
performance. As a result, the fund's 4.78% total return at net
asset value for the six months ended February 28, 1994, was more
than double the 2.12% return for the Standard & Poor's 500 Index.
A look at the past 12 months reveals a similar trend with the
fund returning 18.21% at net asset value compared to the S&P 500
Index's 8.28%.
Many of the companies the fund holds have undergone extensive
cost-cutting and restructuring during the last several years and
are now experiencing increased profits and rising stock prices.
These stocks are well ahead of the market on an individual basis
and have strongly contributed to the fund's overall performance.
Performance was also favorably impacted by a timely decision to
play down health care and energy stocks. These sectors have
underperformed the market, and our efforts to deploy assets into
other areas has proved successful.
Maximizing growth opportunities During the six months from August
31, 1993 (the commencement of the current fiscal year) to
February 28, 1994, we have made several shifts in the fund's
sector allocations. The most significant changes have occurred in
the fields of insurance/finance, and energy.
The insurance and finance sector, while still representing a
sizable allocation with respect to the fund's overall
diversification, was decreased to 10% of total assets. This is
largely the result of a reduced bank exposure, as we anticipated
that rising interest rates were likely to pinch profits. While
banks are instituting cost-cutting measures, it remains to be
seen if this will be enough to offset the narrowing spreads
between rates they charge on loans and those paid out on bank
deposits.
The oil and gas sector has been pared down substantially and
currently rests at just under 2%. Our less sanguine view stems
from OPEC's inability to reverse the downward trend in prices. If
the industry demonstrates some ability to turn prospects around,
we would consider increasing the fund's position.
<PAGE>
By the end of the semiannual period, the fund's investments in
short-term securities had climbed to 8% of total assets. While
part of this increase may be attributed to the trimming of some
stock positions where we took profits, it also reflects concerns
about a potential stock market correction and rising interest
rates. More recent economic data has brightened our outlook, and
efforts are currently underway to redeploy these assets into
other areas that offer greater opportunities for growth.
We expect to continue targeting industries that are likely to
benefit from a strengthening economy. The companies selected are
notable for their past and present ability to generate attractive
earnings and dynamic growth.
Automotive In our last report, not a single auto-related holding
made the fund's list of top 10 holdings. However, by the end of
the semiannual period, General Motors (GM) had grown to be the
fund's single largest holding. This increase reflects both stock
acquisition and subsequent price appreciation resulting from
favorable investor perceptions. GM's recent successes can be
attributed to the turnaround in its North American operations. An
improved assortment of products and a leaner cost structure have
helped generate increased earnings.
Software and services Having demonstrated the ability to handle
the complex needs of huge networks, Cisco Systems, Inc. is at the
forefront of change in networking for personal computers. This
provider of computer hardware is facilitating a growing trend of
linking multiple computer users -- both internally and offsite --
to the same data base. Cisco's commitment to maintain product
leadership, offer a high level of customer satisfaction, and
excel in worldwide service and support bodes well for future
earnings.
Transportation The fund's second largest holding, Burlington
Northern, has made great strides in controlling costs over the
last few years. In addition, this railroad giant has benefited
from its strategically located track in the low sulfur coal
region of Wyoming . As environmentalists have raised concerns
over the use of high sulfur coal, demand for low sulfur coal has
increased. Coal shipments, which provide the largest source of
revenues, are growing at attractive rates of 6% to 7% per year.
Looking ahead The decade of the nineties holds many investment
opportunities -- largely the result of painful restructuring and
improved productivity trends during the last several years. This
revitalization was necessary to invigorate corporate America's
competitive position, both at home and abroad. In the future,
these leaner companies should be able to show dramatic profit
increases when the business climate is positive. This should
translate into increased earnings and rising stock prices.
<PAGE>
We believe that patience, combined with the strength and depth of
Putnam's research team, will help to uncover many more rewarding
investment opportunities during the balance of fiscal 1994.
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 February 28,
1994, there is no guarantee the fund will continue to hold these
securities.
Top 10 holdings (2/28/94)*
General Motors Corp.
Burlington Northern, Inc.
Cisco Systems, Inc.
Textron, Inc.
Whirlpool Corp.
Promus Companies, Inc.
Hercules, Inc.
Illinois Central Corp.
Premark International, Inc.
Caterpillar, Inc.
* Reflects 17.2% of the total portfolio, based on net assets.
<PAGE>
Putnam
Research
Analysts
Fund
Semiannual Report
For the Period Ended February 28, 1994
Report of Independent Accountants
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 February 28, 1994, and the
related statement of operations for the six months then ended,
and the statement of changes in net assets, and the "Financial
Highlights" for the six months 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 February 28, 1994, by correspondence with
the custodian. 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 February 28, 1994, the results of its operations for the
six months then ended, and the changes in its net assets and the
"Financial Highlights" for the six months 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
Boston, Massachusetts
April 26, 1994 <PAGE>
Portfolio of
investments owned
February 28, 1994
Common Stocks (89.7%)(a)
Number of Shares Value
Consumer Services (13.0%)
800 Casino America, Inc.(b) $ 21,800
1,250 Clear Channel Communications, Inc. 50,156
900 Disney (Walt) Productions, Inc. 43,313
1,500 Infinity Broadcasting Corp. Class A (b) 48,000
1,000 International Family Entertainment, Inc.(b) 19,375
500 ITT Corp. 48,250
1,000 Mirage Resorts, Inc.(b) 25,250
600 News Corp. Ltd. ADR(b)(c) 34,725
700 Premark International, Inc. 56,350
1,200 Promus Companies, Inc. 59,100
800 QVC Network, Inc.(b) 36,800
1,000 Tele-Communications, Inc. Class A(b) 23,625
466,744
Basic Industrial Products (11.1%)
1,500 CBI Industries, Inc. 50,438
500 Caterpillar, Inc. 54,188
1,000 Harcourt General, Inc. 34,875
500 Hercules, Inc. 57,563
1,000 Ingersoll-Rand Co. 38,375
500 Monsanto Co. 38,313
1,000 Rockwell International Corp. 41,625
800 Sundstrand Corp. 36,100
1,000 Varity Corp.(b) 45,500
396,977
Insurance and Finance (9.9%)
1,000 Beneficial Corp. 37,750
1,200 Citicorp(b) 49,800
1,200 Comerica Inc. 32,550
1,500 Equitable Cos., Inc. 34,688
700 First Fidelity Bancorp 30,625
1,000 Lincoln National Corp. 40,750
1,500 MBNA Corp. 31,125
1,000 NWNL Companies, Inc. 27,250
1,200 TCF Financial Corp. 38,400
2,200 USF&G Corp. 31,350
354,288
Business Equipment and Services (8.4%)
600 BMC Software, Inc. $ 41,250
900 Cisco Systems, Inc. (b) 66,375
600 Dun & Bradstreet Corp. 36,525
1,400 General Motors Corp. Class E 46,200
1,200 Novell, Inc.(b) 30,600
1,000 Oracle Systems Corp.(b) 33,000
1,000 Sybase, Inc. 45,125
299,075
Retail (7.3%)
600 American Stores Co. 28,650
1,000 Gap, Inc. 45,250
1,900 Kroger Co.(b) 45,838
800 Lowes' Cos., Inc. 52,900
800 Penney (J.C.) Co., Inc. 43,800
1,000 Sears, Roebuck & Co. 45,625
262,063
Automotive (6.9%)
1,100 A.P.S. Holding Corp.(b) 21,313
800 Chrysler Corp. 45,400
800 Daimler Benz AKT-ADR(c) 38,100
600 Ford Motor Co. 37,275
1,200 General Motors Corp. 69,900
1,500 MascoTech, Inc. 36,000
247,988
Utilities (6.2%)
700 DSC Communications Corp.(b) 38,063
1,000 GTE Corp. 32,625
1,400 MCI Communications Corp. 38,325
900 Pacific Telesis Group 49,050
1,000 Sprint Corp. 37,125
400 Telefonos de Mexico S.A., Ser. L, ADR(c) 26,850
222,038
Transportation (4.8%)
1,100 Burlington Northern, Inc. 69,163
1,600 Illinois Central Corp. 57,200
2,000 Landstar System, Inc.(b) 47,000
173,363
Electronics and Electrical Equipment (4.6%)
500 General Electric Co. $ 52,688
400 Intel Corp. 27,500
500 Motorola, Inc. 51,063
400 Texas Instruments, Inc. 32,300
163,551
Aerospace and Defense (3.8%)
700 Allied-Signal, Inc. 53,463
300 Litton Industries, Inc. 20,063
1,100 Textron, Inc. 63,800
137,326
Health Care (2.6%)
1,500 Baxter International, Inc. 34,125
500 Bristol-Myers Squibb Co. 27,625
1,000 Roberts Pharmaceutical Corp. (b) 31,500
93,250<PAGE>
Chemicals (2.3%)
1,100 Grace (W.R.) & Co. 49,225
1,000 Witco Chemical Corp. 33,875
83,100
Consumer Non-Durables (2.1%)
700 Avon Products, Inc. 40,513
600 Philip Morris Cos., Inc. 33,600
74,113
Oil and Gas (1.9%)
400 Chevron Corp. 34,700
700 Kerr-McGee Corp. 31,413
66,113
Consumer: Durable Goods (1.7%)
900 Whirlpool Corp. 60,968
Building and Construction (1.5%)
1,000 Armstrong World Industries, Inc. $ 54,125
Metals and Mining (0.8%)
2,000 Gibraltar Steel Corp.(b) 29,000
Food and Beverages (0.8%)
1,000 Seagram Co. Ltd. 28,500
Total Common Stocks (cost $2,704,535) $3,212,582
Warrants (0.6%)(a)(cost $17,765)
Number of Warrants Expiration Date Value
2,000 Royal Dutch Sinking Fund 1/20/95 $ 21,754
Short-Term Investments (8.0%)(a)(cost $286,027)
Principal Amount Value
$ 286,000 Interest in $279,259,000 repurchase
agreement dated February 28, 1994 with
J.P. Morgan Securities Inc. due
March 1, 1994 with respect to various
U.S. Treasury obligations -- maturity
value of $286,027, for an effective
yield of 3.43% $ 286,027
Total Investments (cost $3,008,327)(d) $3,520,363
<PAGE>
(a) Percentages indicated are based on total net assets of
$3,580,859, which correspond to a net asset value per share of
$10.03.
(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 after the name of a foreign holding stands for
American Depository Receipt, representing ownership of foreign
securities on deposit with a domestic custodian bank.
(d) The aggregate identified cost on a tax cost basis is
$3,008,327, resulting in gross unrealized appreciation and
depreciation of $590,298 and $78,262, respectively, or net
unrealized appreciation of $512,036.
<PAGE>
Statement of
assets and liabilities
February 28, 1994
Assets
Investments in securities, at value
(identified cost $3,008,327) (Note 1) $3,520,363
Cash 599
Dividends receivable 6,275
Receivable for securities sold 81,388
Receivable for shares of the Fund sold 1,420
Unamortized organization expenses (Note 1) 12,895
Total assets 3,622,940
Liabilities
Payable for compensation of Manager (Note 3) $860
Payable for compensation of Trustees (Note 3) 52
Payable for administrative services (Note 3) 7
Payable for investor servicing and
custodian fees (Note 3) 5,328
Payable for distribution fees (Note 3) 1,487
Payable for organization expenses (Note 1) 17,552
Other accrued expenses 16,795
Total liabilities 42,081
Net assets $3,580,859
Represented by
Paid-in capital (Note 5) $3,065,293
Accumulated net investment loss (3,979)
Accumulated net realized gain on investment 7,509
Net unrealized appreciation of investments 512,036
Total -- Representing net assets applicable to
capital shares outstanding $3,580,859
Computation of net asset value and offering price
Net asset value and redemption price per share
($3,580,859 divided by 357,170 shares) $10.03
Offering price per share (100/94.25 of $10.03)* $10.64
* 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.
<PAGE>
Statement of
operations
For the six months ended
February 28, 1994 *
Investment income:
Dividends (net of foreign tax of $140) $ 25,044
Interest 52
Total investment income 25,096
Expenses:
Compensation of Manager (Note 3) $11,400
Investor servicing and custodian fees
(Note 3) 10,265
Compensation of Trustees (Note 3) 699
Reports to shareholders 139
Auditing 6,050
Legal 6,385
Postage 107
Distribution fees (Note 3) 4,421
Administrative services (Note 3) 20
Amortization of organization expenses (Note 1)1,741
Other expenses 97
Fees waived and other expenses
absorbed by Manager (Note 3) (12,249)
Total expenses 29,075
Net investment loss (3,979)
Net realized gain on investments (Notes 1 and 4) 104,966
Net unrealized appreciation of investments
during the period 60,319
Net gain on investments 165,285
Net increase in net assets resulting from operations $161,306
* See Note 2<PAGE>
Statement of
changes in net assets
For the period
November 3, 1992
Six months (commencement
ended of operations)
February 28 to August 31
1994 1993*
Increase in net assets
Operations:
Net investment income (loss) $ (3,979) $ 5,941
Net realized gain on investments 104,966 62,302
Net unrealized appreciation
of investments 60,319 451,717
Net increase in net assets
resulting from operations 161,306 519,960
Distributions to shareholders from:
Net investment income -- (8,932)
Net realized gain on investments (159,512) --
Increase from capital
share transactions (Note 5) 62,169 905,599
Total increase in net assets 63,963 1,416,627
Net assets
Beginning of period (including
accumulated net investment loss
and distributions in excess of
net investment income of $3,979
and $2,722, respectively) 3,516,896 2,100,269
End of period $3,580,859 $3,516,896
*See Note 2.<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
(For a share outstanding throughout the period)
For the period
November 3, 1992
Six months (commencement
ended of operations) to
February 28 August 31
1994 1993
<S> <C> <C>
Net Asset Value, Beginning of Period $10.03 $8.50
Investment Operations:
Net Investment Income (Loss) (.01)(b) .02(a)(b)
Net Realized and Unrealized Gain on Investments .47 1.54
Total from Investment Operations .46 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 $ 10.03 $10.03
Total Investment Return at Net Asset Value (%) (c) 9.56(d) 22.18(d)
Net Assets, End of Period (in thousands) $3,581 $3,517(b)
Ratio of Expenses to Average Net Assets (%) 1.66(b)(d) 1.72(b)(d)
Ratio of Net Investment Income (loss) to
Average Net Assets (%) (.23)(b)(d) 0.24(b)(d)
Portfolio Turnover (%) 41.67(e) 87.76(e)
<PAGE>
*See Note 2.
(a) Per share net investment income 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 an expense limitation during the period. As a result of such limitation,
expenses of the Fund for the periods ended August 31, 1993 and February 28, 1994, reflect
a reduction of approximately $0.05 and $0.03 per share, respectively. See Note 3.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect
of sales charges.
(d) Annualized.
(e) Not annualized.
/TABLE
<PAGE>
Notes to
financial statements
February 28, 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), the Fund's Manager,
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 Investment Management, Inc., 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 undelying
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 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. <PAGE>
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.
F) Distributions to shareholders Distributions to shareholders
are recorded by the Fund on the ex-dividend date.
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 $17,585
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. 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 February
28, 1994, Putnam Investments Inc. owned 259,749 shares of the
Fund valued at $2,605,282.
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, 0.45% of any amount over $1.5 billion, subject
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 voluntarily agreed to reduce its compensation and
absorb certain fund expenses through October 31, 1994, 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. For the purpose of
determining any such reduction in Putnam management compensation;
expenses of the Fund do not reflect the application of
commissions or cash management credits that may reduce designated
fund expenses. As a result of the voluntary limitation, expenses
for the six months ended February 28, 1994, were reduced by
$12,249 .
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 six months ended February 28, 1994, the Fund
incurred $20 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. 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 six months
ended February 28, 1994, amounted to $10,265. Investor servicing
and custodian fees reported in the Statement of operations for
the six months ended February 28, 1994, have been reduced by
credits allowed by PFTC.
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 six months ended
February 28, 1994, the Fund paid $4,421 in distribution fees.
During the six months ended February 28, 1994, Putnam Mutual
Funds Corp., acting as an underwriter, received no net
commissions from the sale of shares of the Fund.
Note 4
Purchases and sales of securities
During the six months ended February 28, 1994, purchases and
sales of investment securities other than short-term investments
aggregated $1,396,069 and $1,674,341, 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
As of February 28, 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
Six months (commencement
ended of operations) to
February 28 August 31
1994 1993
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 12,646 $127,036 122,906 $1,081,779
Shares issued in
connection with reinvestment
of distributions 16,560 159,476 1,020 8,914
29,206 286,512 123,926 1,090,693
Shares repurchased (22,587) (224,343) (20,434) (185,094)
Net increase 6,619 $62,169 103,492 $905,599
/TABLE
<PAGE>
Note 6
Reclassification of
Capital accounts
Effective September 1, 1993, The Putnam Research Analysts Fund
has adopted the provisions of the AICPA Statement of Position
(SOP) 93-2 "Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain and Return of Capital
Distributions, by Investment Companies." The purpose of this SOP
is to report the accumulated net investment income (loss) and
accumulated net realized gain (loss) accounts in such a manner as
to approximate amounts available for future distributions (or to
offset future realized capital gains) and to achieve uniformity
in the presentation of distributions by investment companies.
As a result of the SOP, the Fund has reclassified $2,722 to
decrease distributions in excess of net investment income and
$247 to decrease accumulated net realized gain on investments,
with a decrease of $2,475 to additional paid-in capital.
These adjustments represent the cumulative amounts necessary to
report these balances through August 31, 1993, the close of the
Fund's most recent fiscal year end for financial reporting and
tax purposes.
Fund performance supplement
Putnam Research Analysts Fund is managed for capital appreciation
primarily through investments in common stocks recommended by the
analysts in the Equity Research Group of Putnam Investment
Management, Inc. Standard & Poor's 500 Index is an unmanaged list
of large-capitalization common stocks, and assumes reinvestment
of all distributions. The index does not take into account
brokerage commissions or other costs. The fund's portfolio
contains securities that do not match those in the index. The
Consumer Price Index is a commonly used measure of inflation; it
does not represent an investment return.
Fund performance data do not take into account any adjustment for
taxes that may have been payable.
The fund performance supplement has been prepared by Putnam
Management to provide additional information about the fund and
the indexes used for performance comparisons. The information is
not part of the portfolio of investments owned or the financial
statements.
<PAGE>
Putnam
Research
Analysts
Fund
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
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
Independent accountants
Coopers & Lybrand
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia A. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Richard Frucci
Vice President and Fund Manager
William N. Shiebler
Vice President
Paul O'Neil
Vice President
John R. Verani
Vice President
John D. Hughes
Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
Trustees
George Putnam, Chairman
William F. 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, and W. Nicholas Thorndike
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 and
operating policies of the fund.
59-11527
<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 and "The accompanying notes are an integral part of these
financial statements") 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.
