PUTNAM ASSET ALLOCATION FUNDS
SEMIANNUAL REPORT
MARCH 31, 1995
[LOGO]
BOSTON * LONDON * TOKYO
<PAGE>
PERFORMANCE HIGHLIGHTS
PUTNAM ASSET ALLOCATION FUNDS consist of three portfolios, which
target investors' various life stages and financial goals.
PERFORMANCE RESULTS AT A GLANCE
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------
Total return (change in value during period plus reinvested
distributions)
- ------------------------------------------------------------------
PERIOD ENDED CLASS A CLASS B CLASS C
3/31/95 NAV POP NAV CDSC NAV CDSC
- ------------------------------------------------------------------
GROWTH PORTFOLIO
- ------------------------------------------------------------------
6 months 4.16% -1.78% 3.86% -1.14% 3.82% 2.82%
Life of class (2/7/94)3.31 -2.65 2.52 -1.48 -- --
Life of class (9/1/94) -- -- -- -- 2.97 1.97
- ------------------------------------------------------------------
BALANCED PORTFOLIO
- ------------------------------------------------------------------
6 months 4.08% -1.92% 3.61% -1.39% 3.63% 2.63%
Life of class (2/7/94)2.56 -3.36 1.65 -2.35 -- --
Life of class (9/1/94) -- -- -- -- 2.76 1.76
- ------------------------------------------------------------------
CONSERVATIVE PORTFOLIO
- ------------------------------------------------------------------
6 months 4.09% -1.87% 3.60% -1.40% 3.60% 2.60%
Life of class (2/7/94)1.52 -4.33 0.72 -3.23 -- --
Life of class (9/1/94) -- -- -- -- 2.77 1.77
- ------------------------------------------------------------------
<FN>
Performance data will differ for each share class. Performance
data for the funds represent past results and an expense
limitation in effect until December 31, 1994, for the Growth and
Balanced Portfolios and currently in effect for the Conservative
Portfolio. Without the limitation, each fund's total return would
have been lower. For additional performance details, see pages 8
through 11. Performance for class M shares, which became effective
2/1/95, is not shown because of the brevity of the reporting
period. POP assumes 5.75% maximum sales charge. CDSC reflects the
applicable contingent deferred sales charge, which for class B
shares is 50%, and for class C shares, 1%. Investment returns and
principal value will fluctuate so an investor's shares, when sold,
may be worth more or less than their original cost. All returns
are cumulative.
</TABLE>
COMPARATIVE PERFORMANCE (CUMULATIVE TOTAL RETURNS)
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
LEHMAN STANDARD RUSSELL FIRST BOSTON
INTERMEDIATE & POOROS(R) 2000 HIGH YIELD
TREASURY INDEX 500 INDEX INDEX BOND INDEX
- ------------------------------------------------------------------
6 months 4.02% 9.69% 2.68% 4.66%
Life of class A, B 1.29 7.70 -0.41 1.90
Life of class C 3.17 7.49 2.34 5.08
- ------------------------------------------------------------------
<FN>
Lehman Brothers Intermediate Treasury Index is an unmanaged list
of Treasury bonds; it is used as a general gauge of the market for
intermediate-term fixed-income securities. Standard & Poor's 500
Index is an unmanaged list of common stocks that is frequently
used as a general measure of U.S. stock market performance.
Russell 2000 Index is an unmanaged list of common stocks that is
frequently used as a general performance measure of stocks of
small to midsize companies. First Boston High Yield Index is an
unmanaged list of lower-rated higher-yielding U.S. corporate
bonds. Salomon Brothers Non-U.S. World Government Bond Index is an
unmanaged list of bonds issued by 10 countries. Morgan Stanley
Capital International World Index is an unmanaged list of equity
securities listed on the stock exchanges of Europe, Canada,
Australia, New Zealand, and the Far East, with values expressed in
U.S. dollars.
The indexes' performance will differ from that of the funds',
assumes reinvestment of all distributions, and does not take into
account brokerage commissions or other costs. The funds'
portfolios contain securities that do not match those in the
indexes. Past performance is not indicative of future results.
</TABLE>
<PAGE>
FROM THE CHAIRMAN
[PHOTO OF GEORGE PUTNAM]
(C) KARSH, OTTAWA
DEAR SHAREHOLDER:
BY DIVERSIFYING INVESTMENTS ACROSS A SPECTRUM OF GLOBAL EQUITY AND
FIXED-INCOME SECURITIES, PUTNAM ASSET ALLOCATION FUNDS SEEK TO
TAKE ADVANTAGE OF CHANGING PERFORMANCE TRENDS IN VARIOUS MARKETS
AROUND THE WORLD. AS THE FUNDS REACHED THE HALFWAY POINT OF THEIR
FIRST FULL FISCAL YEAR, THEY WERE ALREADY DEMONSTRATING THE
VALIDITY OF THIS APPROACH.
DURING THE SIX MONTHS ENDED MARCH 31, 1995, FOR EXAMPLE, STRENGTH
IN THE U.S. STOCK AND BOND MARKETS AND IN THE INTERNATIONAL BOND
MARKETS HELPED OFFSET UNDERPERFORMANCE IN THE OTHER MARKETS IN
WHICH THE FUNDS INVEST.
IN THE FOLLOWING REPORT, YOUR FUND'S MANAGEMENT TEAM PROVIDES AN
OVERVIEW OF THE ASSET CLASSES REPRESENTED IN THE PORTFOLIO. THEN
THEY TAKE A LOOK AT WHAT THEY BELIEVE LIES IN STORE FOR THE
REMAINDER OF FISCAL 1995.
RESPECTFULLY YOURS,
[SIGNATURE]
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
MAY 17, 1995
<PAGE>
REPORT FROM THE FUND MANAGERS
PETER CARMAN
GARY N. COBURN
WILLIAM J. LANDES
Substantial differences in performance in different sectors of the
investment universe help demonstrate the effectiveness of an asset
allocation approach. For example, foreign stock markets
underperformed other markets during the six months ended March 31,
1995, affecting all three portfolios of Putnam Asset Allocation
Funds. However, strength in the U.S. stock and bond markets and in
the international bond markets was able to cushion the blow during
the period that encompasses the first half of fiscal 1995.
U.S. ECONOMIC AND MARKET ENVIRONMENT
After lackluster performance during most of 1994, both the U.S.
stock market and bond market performed well during the first
quarter of 1995.
Stocks. The stock market's strong performance overall during the
first half of the fiscal year was partly the result of the
perception by investors that the U.S. economy was headed toward a
"soft landing." Throughout the period, both large- and small-
company stocks had periods of outperformance. Technology and
health care were the most successful sectors throughout the
period. On the other hand, consumer nondurables and industrial
stocks were relatively weak, due in part to the gradual slowing of
the economy.
Putnam Management believes corporate profits should continue to
grow in 1995, especially those of companies with material overseas
operations. We also believe investors with equity holdings may
benefit from new legislative initiatives such as prospective cuts
in long-term capital gains taxes, investment tax credits for small
businesses, and more attractive individual retirement account
regulations.
Bonds. In response to the values created by 1994's dramatic
selloffs, U.S. bonds have rallied. Long-term Treasury bond yields
have fallen nearly a full percentage point since November, making
these bonds among the year's most rewarding asset classes to date.
Thus far, high-yield corporate bonds have performed on a par with
Treasuries. We continue to believe these bonds will not offer
prospects for significant outperformance relative to Treasuries
over the near term. Their performance over the first half of
fiscal 1995, however, supports our assessment that the market is
fundamentally sound.
GLOBAL ECONOMIC ENVIRONMENT
International bond markets performed well during the semiannual
period. Foreign stock markets, on the other hand, did not.
Stocks Overseas, the impact of events such as the Kobe earthquake
in Japan, the floods in Europe, the Barings Bank collapse, and the
perception of credit tightening in Germany dampened international
stock-market performance. The Japanese equity market has lost
roughly 50% of its value since its peak in 1989-1990. Perhaps not
coincidentally, the Japanese yen has appreciated roughly 40% over
this period.
Concerns about the German economy, as well as the availability of
attractively priced fixed-income alternatives, has created a
difficult environment for German equities.
In the United Kingdom, the Conservative Party has been trailing
the Labor Party in the polls by a wide margin. Unless their
popularity dramatically improves, the Tories are likely to lose
control of the government to the Labor Party at the next general
elections. The impact this political change could have on the
financial markets is difficult to predict, but the possibility of
such a change is certainly making investors in U.K. equities more
cautious.
Bonds: Non-dollar bonds have contributed significantly to your
fund's performance during the period. Last year's widespread bond-
market selloffs left many international bond markets very
attractively priced. Indeed, while relative value has favored
fixed-income over equity investments around the world, the extent
to which equity- and bond-market performance have diverged in
international markets has been quite dramatic.
STRATEGY AND OUTLOOK:
We remain optimistic about stock-market prospects. During the
first quarter of 1995, your management team took advantage of the
flexibility offered by the funds' asset allocation strategy to
make some strategic portfolio adjustments. We eliminated the
portfolios' slight overweighting in fixed-income securities to
gain more exposure to the strength in the U.S. stock market.
In light of gains registered by the stock market thus far in 1995,
Putnam Management expects short-term U.S. equity- market
performance will be good, but not exceptional. If, in response to
stronger second-quarter growth in gross domestic product, interest
rates were to begin trending upward, modest declines might be
expected in the short term. International equity markets should
continue to generate solid returns as a result of strong earnings
growth and increases in productivity, especially in Europe.
<PAGE>
WORLD FIXED-INCOME MARKETS*
[MOUNTAIN CHART]
PLOT POINTS
U.S. HIGH U.S. GOVERNMENT INTERNATIONAL
DATE YIELD BONDS(1) SECURITIES(2) BONDS(3)
- ------------------------------------------------------------------
3/31/94 -2.94 -2.24 1.22
4/30/94 -1.34 -0.78 0.65
5/31/94 0.57 -0.12 -1.34
6/30/94 -0.67 -0.22 2.42
7/31/94 0.47 1.82 0.26
8/31/94 0.75 0.02 -0.58
9/30/94 0.40 -1.40 1.98
10/31/94 0.07 -0.06 2.58
11/30/94 -1.16 -0.2 -2.01
12/31/94 1.06 0.61 0.05
1/31/95 1.05 1.85 2.18
2/28/95 2.46 2.13 2.83
3/31/95 1.13 0.63 8.91
[FN]
* Monthly returns plotted at month-end from 3/31/94.
Sources: (1) First Boston High Yield Bond Index; (2) Lehman
Brothers Treasury Bond Index; (3) Salomon Brothers Non-U.S.
World Government Bond Index.
[/FN]
On the fixed-income securities side, we will continue to look for
strong performance from the world's bond markets, with late-cycle
economies such as the U.S., the U.K., New Zealand, Australia, and
Canada offering the best opportunities.
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 3/31/95, there is
no guarantee the fund will continue to hold these securities in
the future.
WORLD EQUITY MARKETS*
[MOUNTAIN CHART]
PLOT POINTS
LARGE CAP SMALL CAP INTERNATIONAL
Date GROWTH(1) GROWTH(2) STOCKS(3)
- ------------------------------------------------------------------
3/31/94 -4.35 -5.27 -4.42
4/30/94 1.28 -0.59 3.92
5/31/94 1.63 -1.12 -0.64
6/30/94 -2.45 -3.37 1.03
7/31/94 3.28 1.64 0.98
8/31/94 4.09 5.57 2.37
9/30/94 -2.44 -0.34 -3.04
10/31/94 2.24 -0.4 3.02
11/30/94 -3.64 -4.04 -4.98
12/31/94 1.48 2.68 0.55
1/31/95 2.59 1.26 -4.08
2/28/95 3.89 4.16 -0.21
3/31/95 2.95 1.71 6.02
[FN]
* Monthly returns plotted at month-end from 3/31/94.
Sources: (1) Standard & PoorOs 500 Index; (2) Russell 2000
Index; (3) Morgan Stanley Capital International (MSCI) World
Index.
[/FN]
<PAGE>
PORTFOLIO AND PERFORMANCE SUMMARY:
GROWTH PORTFOLIO is designed to seek maximum growth of an
investment over time.
[BAR CHART]
PLOT POINTS
- ------------------------------------------------------------------
TARGETED PORTFOLIO STRUCTURE
Large-cap growth stocks 25%
Small-cap growth stocks 15%
Value stocks 25%
International equities 15%
Domestic fixed-income securities 5%
International fixed-income securities 5%
High-yield securities 5%
Cash and money market securities 5%
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
CLASS A CLASS B CLASS C CLASS M
SHARE VALUE NAV POP NAV NAV NAV POP
- ------------------------------------------------------------------
9/30/94 $8.43 $8.94 $8.39 $8.39 -- --
- ------------------------------------------------------------------
2/3/95 -- -- -- -- $8.39 $8.69
- ------------------------------------------------------------------
3/31/95 8.70 9.23 8.66 8.63 8.69 9.01
- ------------------------------------------------------------------
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT CAPITAL
DISTRIBUTIONS NUMBER INCOME GAINS TOTAL
- ------------------------------------------------------------------
Class A 1 $0.075 $ -- $0.075
- ------------------------------------------------------------------
Class B 1 0.050 -- 0.050
- ------------------------------------------------------------------
Class C 1 0.075 -- 0.075
- ------------------------------------------------------------------
Class M -- -- -- --
- ------------------------------------------------------------------
<FN>
The trust began operations on 2/7/94. The inception date for class
C shares was 9/1/94 and for class M shares, 2/3/95. Performance of
these shares will differ.
International investing may include risks such as currency
fluctuations and political developments. Higher-yielding, lower-
rated bonds involve greater risk of nonpayment of principal and
interest than investment-grade bonds. Small-capitalization stocks
may be more volatile than those of larger companies, but offer
greater growth potential.
</TABLE>
<PAGE>
PORTFOLIO AND PERFORMANCE SUMMARY:
BALANCED PORTFOLIO is designed to seek total return for investors
in their peak accumulation years.
[BAR CHART]
PLOT POINTS
- ------------------------------------------------------------------
TARGETED PORTFOLIO STRUCTURE
Large-cap growth stocks 20%
Small-cap growth stocks 10%
Value stocks 20%
International equities 15%
Domestic fixed-income securities 10%
International fixed-income securities 10%
High-yield securities 10%
Cash and money market securities 5%
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
CLASS A CLASS B CLASS C CLASS M
SHARE VALUE NAV POP NAV NAV NAV POP
- ------------------------------------------------------------------
9/30/94 $8.33 $8.84 $8.31 $8.31 -- --
- ------------------------------------------------------------------
2/6/95 -- -- -- -- $8.34 $8.64
- ------------------------------------------------------------------
3/31/95 8.56 9.08 8.53 8.51 8.54 8.85
- ------------------------------------------------------------------
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT CAPITAL
DISTRIBUTIONS NUMBER INCOME GAINS TOTAL
- ------------------------------------------------------------------
Class A 2 $0.105 $ -- $0.105
- ------------------------------------------------------------------
Class B 2 0.076 -- 0.076
- ------------------------------------------------------------------
Class C 2 0.097 -- 0.097
- ------------------------------------------------------------------
Class M 1 .045 -- .045
- ------------------------------------------------------------------
<FN>
The trust began operations on 2/7/94. The inception date for class
C shares was 9/1/94 and for class M shares, 2/6/95. Performance of
these shares will differ.
International investing may include risks such as currency
fluctuations and political developments. Higher-yielding, lower-
rated bonds involve greater risk of nonpayment of principal and
interest than investment-grade bonds. Small-capitalization stocks
may be more volatile than those of larger companies, but offer
greater growth potential.
</TABLE>
<PAGE>
PORTFOLIO AND PERFORMANCE SUMMARY:
CONSERVATIVE PORTFOLIO is designed to seek income, while
protecting the original value of the investment, for investors
concerned about maintaining their purchasing power.
[BAR CHART]
PLOT POINTS
- ------------------------------------------------------------------
TARGETED PORTFOLIO STRUCTURE
Large-cap growth stocks 10%
Small-cap growth stocks 5%
Value stocks 10%
International equities 10%
Domestic fixed-income securities 35%
International fixed-income securities 15%
High-yield securities 10%
Cash and money market securities 5%
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
CLASS A CLASS B CLASS C CLASS M
SHARE VALUE NAV POP NAV NAV NAV POP
- ------------------------------------------------------------------
9/30/94 $8.23 $8.73 $8.22 $8.22 -- --
- ------------------------------------------------------------------
2/7/95 -- -- -- -- $8.21 $8.51
- ------------------------------------------------------------------
3/31/95 8.41 8.92 8.39 8.37 8.39 8.69
- ------------------------------------------------------------------
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT CAPITAL
DISTRIBUTIONS NUMBER INCOME GAINS TOTAL
- ------------------------------------------------------------------
Class A 2 $0.150 $ -- $0.150
- ------------------------------------------------------------------
Class B 2 0.121 -- 0.121
- ------------------------------------------------------------------
Class C 2 0.140 -- 0.140
- ------------------------------------------------------------------
Class M 1 .060 -- .060
- ------------------------------------------------------------------
<FN>
The trust began operations on 2/7/94. The inception date for class
C shares was 9/1/94 and for class M shares, 2/7/95. Performance of
these shares will differ.
International investing may include risks such as currency
fluctuations and political developments. Higher-yielding, lower-
rated bonds involve greater risk of nonpayment of principal and
interest than investment-grade bonds. Small-capitalization stocks
may be more volatile than those of larger companies, but offer
greater growth potential.
</TABLE>
<PAGE>
TERMS AND DEFINITIONS
CLASS A SHARES are generally subject to an initial sales charge.
CLASS B SHARES may be subject to a sales charge upon redemption.
CLASS C SHARES are not subject to an initial sales charge and are
subject to a contingent deferred sales charge only if the shares
are redeemed during the first year.
CLASS M SHARES have a lower initial sales charge and a higher 12b-
1 fee than class A shares and no sales charge on redemption.
NET ASSET VALUE (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not including any initial or contingent deferred sales
charge.
PUBLIC OFFERING PRICE (POP) is the price of a mutual fund share
plus the maximum sales charge levied at the time of purchase. POP
performance figures shown here assume the maximum 5.75% sales
charge for class A shares and 3.50% for class M shares.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the
time of the redemption of class B shares and assumes redemption at
the end of the period. Your fund's CDSC declines from a 5% maximum
during the first year to 1% during the sixth year. After the sixth
year, the CDSC no longer applies. The CDSC for class C shares is
1% for one year after purchase.
<PAGE>
PORTFOLIO OF INVESTMENT OWNED
March 31, 1995 (Unaudited)
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Conservative Growth Balanced
33.1% 74.3% 61.1%
COMMON STOCKS* Shares Value Shares Value Shares Value
- -------------------------------------------------------------------------
AEROSPACE AND DEFENSE* 0.3% 0.6%
0.5%
- -------------------------------------------------------------------------
Boeing Co. 2,200 $118,525 9,300 $501,038 14,000 $754,250
McDonnell
Douglas Corp. 2,100 117,075 9,300 518,475 13,900 774,925
--------- --------- ---------
235,600 1,019,513 1,529,175
AUTOMOTIVE* 0.8% 1.6% 1.5%
- -------------------------------------------------------------------------
A.P.S. Holding
Corp.+ 255 6,503 2,110 53,805 3,030 77,265
Autoliv AB
(Sweden) -- -- -- -- 10,200 386,112
Bridgestone Corp.
ADR (Japan) 3,000 44,652 12,000 178,608 21,000 312,564
Edaran Otomobil
Nasional Berhad
ADR (Malaysia) 7,000 51,216 15,000 109,749 26,000 190,232
Edelbrock
Corp.+ 1,955 25,415 8,850 115,050 12,325 160,225
General Motors
Corp. 5,300 234,525 22,000 973,461 33,800 1,495,650
Magna
International,
Inc. Class A 3,600 137,250 13,900 529,938 21,100 804,438
Michelin Corp.
Class B ADR
(France)+ 2,130 91,716 4,730 203,670 10,945 471,284
Mitsubishi
Motors Corp.
ADR (Japan) 10,000 91,266 19,000 173,405 45,000 410,697
Peugeot Citroen
S A ADR (France) 600 84,412 1,300 182,893 2,200 309,511
--------- --------- ---------
766,955 2,520,579 4,617,978
BASIC INDUSTRIAL PRODUCTS* 1.6% 3.6% 3.2%
- -------------------------------------------------------------------------
Asahi Diamond
Industrial Co.,
Ltd. ADR (Japan)4,120 59,421 10,300 148,552 23,690 341,669
Ball Corp. 7,500 257,813 31,400 1,079,375 48,200 1,656,875
Black & Decker
Manufacturing Co.4,400 127,050 20,800 600,600 28,800 831,600
British Steel
PLC ADR
(United Kingdom)42,800 111,284 91,400 237,649 183,000 475,818
CBI Industries,
Inc. 9,000 230,625 37,700 966,063 57,900 1,483,688
Caterpillar Inc.
(DEL) 2,900 161,313 12,000 667,500 18,000 1,001,250
Danieli and Co.
ADR (Italy) -- -- 6,200 40,909 -- --
Deere (John) &
Co. 1,400 113,750 5,900 479,375 8,800 715,000
Harnischfeger
Industries, Inc.9,000 252,000 37,700 1,055,600 57,900 1,621,200
Komatsu, Ltd.
ADR (Japan) -- -- -- -- 2,000 14,423
Mitsui Fudoscan
Co. Ltd. (Japan)8,000 62,767 20,000 156,918 43,000 337,374
Rieter Holding
AG (Registered
Shares) ADR
(Switzerland) 30 40,265 80 107,373 360 483,179
Sommer Allibert
ADR (France) 160 60,937 400 152,341 795 302,778
Takuma Co. Ltd.
ADR (Japan) 4,000 62,767 5,000 78,459 16,000 251,067
Toyo Seikan
Kaisha ADR
(Japan) -- -- 1,000 31,153 3,000 93,458
--------- --------- ---------
1,539,992 5,801,867 9,609,379
BROADCASTING* 0.2% 0.4% 0.3%
- -------------------------------------------------------------------------
Centennial Cellular
Corp. Class A 2,479 37,185 10,620 159,300 14,302 214,530
Commnet Cellular,
Inc.+ 1,175 28,934 5,300 130,513 7,350 180,994
Paging Network,
Inc.+ 960 32,160 3,865 129,478 5,930 198,655
Renaissance
Communications
Corp.+ 680 21,930 3,010 97,073 4,160 134,160
SFX Broadcasting,
Inc. Class A 1,435 32,646 6,730 153,108 9,160 208,390
Valuevision
International, Inc.
Class A+ 1,725 $8,733 6,500 $32,906 10,755 $54,447
--------- --------- ---------
161,588 702,378 991,176
BUILDING AND CONSTRUCTION* 0.7% 1.1% 1.1%
- -------------------------------------------------------------------------
CRH PLC ADR
(Ireland) 14,400 84,732 38,400 225,953 79,800 469,559
Fluor Corp. 2,600 125,450 11,400 550,050 17,100 825,075
Hong Leong
Industries
ADR (Malaysia) 10,000 51,414 17,000 87,404 28,000 143,959
JGC Corp.
(Japan) 3,300 51,021 6,600 102,042 13,200 204,084
Lafarge Coppee
(Bearer Shares)
ADR (France) 1,200 90,955 3,000 227,388 6,500 492,675
Marui Co. Ltd.
ADR (Japan) 4,000 63,228 11,000 173,878 22,000 347,756
Meyer
International
(United Kingdom) 19 94 41 203 84 415
Schuler Homes,
Inc.+ 1,635 17,781 7,415 80,638 10,510 114,296
Shimizu Corp.
ADR (Japan) 7,000 67,439 19,000 183,050 30,000 289,026
Sungei Way
Holdings Berhad
ADR (Malaysia) 11,500 46,391 2,250 9,077 28,750 115,978
VA Technolgie
AG ADR
(Austria)+ 1,050 106,135 2,000 202,162 3,785 382,592
--------- --------- ---------
704,640 1,841,845 3,385,415
BUSINESS EQUIPMENT
AND SERVICES* 2.7% 6.5% 4.9%
- -------------------------------------------------------------------------
Accustaff, Inc.+1,700 32,513 7,700 147,263 10,550 201,769
Alternative
Resources Corp.+ 300 11,925 2,000 79,500 1,800 71,550
Automatic Data
Processing, Inc.1,500 94,500 4,700 296,100 7,200 453,600
Cambridge
Technology
Partners, Inc. 1,470 44,100 6,950 208,500 9,560 286,800
Career Horizons,
Inc.+ 1,520 29,640 5,950 116,025 9,270 180,765
Chipcom Corp.+ 800 30,200 3,650 137,788 5,100 192,525
Cisco Systems,
Inc.+ 1,900 72,438 8,400 320,250 12,600 480,375
Computer
Associates
International,
Inc. 2,700 160,313 11,600 688,750 17,400 1,033,125
Computer
Sciences
Corp. 2,800 138,250 12,200 602,375 18,300 903,563
Concord
Computing
Corp.+ 1,267 34,843 5,817 159,968 7,955 218,763
Corporate
Express, Inc.+ 700 18,550 3,175 84,138 4,225 111,963
Cyrk
International,
Inc. 1,885 32,281 8,550 146,419 11,900 203,788
DSC
Communications
Corp.+ 3,200 104,200 13,800 449,363 20,700 674,044
Dai Nippon
Printing Co.,
Ltd. ADR
(Japan) 5,000 77,882 10,000 155,763 20,000 311,526
Dow Jones -- -- 300 11,363 200 7,575
Encad, Inc.+ 1,675 30,150 7,600 136,800 10,650 191,700
FTP Software,
Inc. 1,840 58,420 8,405 266,859 11,605 368,459
Fiserv Inc.+ 2,095 55,518 9,795 259,568 13,350 353,775
Glory Ltd.
ADR (Glory
Kogyo) -- -- 8,000 242,760 -- --
IBM Corp. 1,800 147,375 7,900 646,813 11,900 974,313
Interim Services,
Inc.+ 645 19,189 2,405 71,549 3,915 116,471
Komori Printing
Machinery Co.,
Ltd. ADR (Japan)3,000 70,959 6,000 141,917 14,000 331,141
Medar, Inc.+ 475 4,809 2,000 20,250 3,100 31,388
Oracle Systems
Corp.+ 3,050 95,313 13,400 418,750 20,050 626,563
PLATINUM
Technology
Inc.+ 1,020 21,293 4,735 98,843 6,595 137,671
Robert Half
International,
Inc. 2,962 75,531 13,708 349,554 18,014 459,357
Security Services
PLC ADR
(United Kingdom)7,800 $100,583 13,200 $170,217 15,200 $196,007
Silicon Graphics,
Inc.+ 2,900 102,950 12,500 443,750 18,800 667,400
Silicon Valley
Group, Inc.+ 1,325 37,266 7,500 210,938 8,410 236,531
Societe Generale
De Surveillance
Holdings S.A.
(Bearer Shares)
(Switzerland) ADR+ 50 78,808 150 236,424 260 409,801
State of The
Art Inc. 2,625 31,500 12,500 150,000 16,750 201,000
Tandy Corp. 2,600 124,150 11,300 539,575 17,000 811,750
U.S. Robotics
Corp.+ 475 29,688 2,100 131,250 3,025 189,063
Unisys Corp. 22,500 208,125 94,100 870,425 144,700 1,338,475
Wall Data, Inc.+ 625 28,750 2,840 130,640 3,965 182,390
Wolters Kluwer
N.V. ADR
(Netherlands) 1,404 108,231 3,308 255,007 5,811 447,958
Xerox Corp. 1,500 176,063 6,300 739,463 9,500 1,115,063
Zilog Inc.+ 1,505 53,804 7,035 251,501 9,630 344,273
--------- --------- ---------
2,540,110 10,386,418 15,062,280
CHEMICALS* 0.7% 1.3% 1.1%
- -------------------------------------------------------------------------
Akzo N.V. ADR
(Netherlands) 700 76,601 2,000 218,860 2,800 306,403
BASF AG Company
ADR (Germany) 10 2,036 60 12,214 99 20,153
Dutch State Mines
N.V. (Netherlands)510 39,249 1,265 97,352 2,400 184,699
Sekisui Chemical
Co. (Japan) 6,000 71,305 14,000 166,379 23,000 273,337
Solvay SA ADR
(Belgium) 200 98,199 500 245,497 1,000 490,994
Union Carbide
Corp. 7,500 229,688 31,400 961,625 48,200 1,476,125
du Pont (E.I.)
de Nemours &
Co., Ltd. 2,600 157,300 7,700 465,850 11,500 695,750
--------- --------- ---------
674,378 2,167,777 3,447,461
COMPUTER PERIPHERALS* --% --% --%
- -------------------------------------------------------------------------
Dialogic Corp.+ 200 5,675 400 11,350 400 11,350
COMPUTER SERVICES AND
SOFTWARE* 0.8% 1.9% 1.4%
- -------------------------------------------------------------------------
America Online,
Inc.+ 1,230 91,328 5,090 377,933 7,630 566,528
Analysts
International
Corp. 1,000 23,250 3,700 86,025 5,200 120,900
Applied Voice
Technology, Inc.+ 800 16,300 3,600 73,350 5,000 101,875
Caere Corp. 805 7,849 4,250 41,438 5,750 56,063
Cognex Corp.+ 2,825 81,219 13,300 382,375 17,825 512,469
Computer Horizons
Corp. 1,785 31,684 8,050 142,888 11,325 201,019
Comverse
Technology, Inc.1,200 16,500 9,100 125,125 7,550 103,813
Datastream
Systems, Inc. 100 2,025 200 4,050 200 4,050
Getronics
N.V. ADR
(Netherlands) 3,110 124,214 8,011 319,962 13,016 519,863
Infosoft
International,
Inc.+ 520 24,960 2,365 113,520 3,305 158,640
Keane, Inc. 1,940 47,045 8,895 215,704 12,227 296,505
McAfee Assocs,
Inc. 1,400 40,600 7,000 203,000 9,400 272,600
Mercury
Interactive
Corp.+ 2,055 34,678 9,330 157,444 13,190 222,581
Microcom,
Inc. 2,650 30,144 12,350 140,481 17,125 194,797
Netmanage,
Inc.+ 470 19,740 2,260 94,920 3,000 126,000
Oak Technology,
Inc. 550 16,363 2,625 78,094 3,525 104,869
Platinum Software
Corp.+ 3,025 29,494 13,750 134,063 19,325 188,419
Security Dynamics
Technologies, Inc.+700 23,625 4,050 136,688 4,550 153,563
Sierra On-Line,
Inc.+ 1,350 29,700 5,850 128,700 8,000 176,000
Softkey
International,
Inc. 1,087 $29,621 4,993 $136,059 6,952 $189,442
TGV Software,
Inc. 100 2,250 500 11,250 700 15,750
--------- --------- ---------
722,589 3,103,069 4,285,746
COMPUTERS* 0.3% 0.5% 0.4%
- -------------------------------------------------------------------------
Fujitsu Ltd. ADR
(Japan) 10,000 99,804 28,000 279,451 45,000 449,118
Network
Peripherals, Inc.1,180 25,370 5,500 118,250 7,515 161,573
SGS-Thomson
Microelec. NY
Shs ADR (France)+2,700 80,325 7,500 223,125 14,000 416,500
Zebra Technologies
Corp.+ 1,032 42,312 4,782 196,062 6,464 265,024
--------- --------- ---------
247,811 816,888 1,292,215
CONGLOMERATES* 0.4% 0.9% 0.8%
- -------------------------------------------------------------------------
Allied-Signal
Inc. 2,900 113,825 12,500 490,625 18,800 737,900
Cartiere Burgo
S.P.A. ADR
(Italy) 4,300 29,255 8,100 55,108 13,400 91,167
Hutchison Whampoa,
Ltd. ADR
(Hong Kong) 8,000 35,284 11,000 48,516 31,000 136,726
Ogden Corp. 10,500 211,313 43,900 883,488 67,500 1,358,438
--------- --------- ---------
389,677 1,477,737 2,324,231
CONSUMER DURABLE GOODS* --% 0.1% 0.1%
- -------------------------------------------------------------------------
Blyth Industries,
Inc.+ 1,000 27,500 5,525 151,938 6,450 177,375
Duracraft Corp.+ 50 1,738 1,230 42,743 2,000 69,500
--------- --------- ---------
29,238 194,681 246,875
CONSUMER NON DURABLE GOODS* 2.8% 6.7% 5.3%
- -------------------------------------------------------------------------
American Brands,
Inc. 5,300 208,025 22,000 863,500 33,800 1,326,650
Authentic Fitness
Corp.+ 4,045 64,720 20,585 329,360 25,805 412,880
Avon Products,
Inc. 3,300 199,650 13,800 834,900 21,200 1,282,600
B A T Industries
PLC (United
Kingdom) 12,000 85,342 35,000 248,913 56,000 398,261
Cannondale
Corp.+ 1,150 14,375 5,375 67,188 7,450 93,125
Department 56,
Inc.+ 1,695 67,588 7,815 311,623 10,480 417,890
Dibrell Bros.,
Inc. 12,000 243,000 52,000 1,016,550 77,200 1,563,300
Eastman Kodak
Co. 6,800 361,250 28,900 1,535,313 44,000 2,337,500
Fastenal Co. 2,214 54,520 10,240 252,160 13,772 339,136
General
Electric Co. 1,800 97,425 7,600 411,350 11,400 617,025
Gillette Co.
(The) 600 48,975 2,400 195,900 3,500 285,688
Lowe's Cos.,
Inc. 3,200 110,400 13,700 472,650 20,600 710,700
Philip Morris
Cos., Inc. 6,900 450,185 28,700 1,872,675 43,700 2,851,425
Premark
International,
Inc. 2,200 97,075 9,400 414,775 14,100 622,163
Scott Paper Co. 1,600 143,000 7,000 625,625 10,500 938,438
St. John Knits,
Inc. 2,220 81,030 10,155 370,658 13,895 507,168
Svenska Cellulosa
AB (Sweden) 4,850 76,990 12,050 191,285 23,200 368,284
Tate & Lyle PLC
(United Kingdom)14,333 101,005 32,728 230,634 61,190 431,206
Toray Industries
Inc. (Japan) 11,000 74,755 25,000 169,898 46,000 312,611
Wolverine World
Wide, Inc. 2,065 63,241 10,125 310,078 13,290 407,006
--------- --------- ---------
2,642,551 10,725,035 16,223,056
CONSUMER SERVICES* 1.5% 3.8% 2.9%
- -------------------------------------------------------------------------
Apple South,
Inc. 2,200 $34,375 8,400 $131,250 11,700 $182,813
CBS Inc. 1,725 110,400 7,480 478,720 11,215 717,760
Cellular
Communications
of Puerto
Rico, Inc. 875 26,688 3,900 118,950 5,400 164,700
Century
Communications
Corp. Class A 3,195 31,551 13,775 136,028 19,550 193,056
Clear Channel
Communications,
Inc. 1,210 71,995 5,170 307,615 7,040 418,880
Davco
Restaurants,
Inc.+ 795 10,534 4,375 57,969 5,950 78,838
DF & R
Restaurants,
Inc. -- -- 1,185 17,183 1,725 25,013
Doubletree
Corp.+ 1,300 26,325 3,100 62,775 3,800 76,950
Dun & Bradstreet
Corp. 3,500 184,188 14,400 757,800 22,200 1,168,275
EZ Communications,
Inc. Class A 2,665 44,639 12,520 209,710 17,060 285,755
Genting Berhad Co.
ADR (Malaysia) 6,500 58,612 20,000 180,344 30,000 270,516
Hospitality
Franchise
System, Inc. 1,020 32,640 3,965 126,880 6,620 211,840
Infinity
Broadcasting
Corp. Class A+ 1,305 54,484 6,105 254,884 8,335 347,986
LIN Television
Corp. 975 32,419 4,425 147,131 6,200 206,150
Landry's Seafood
Restaurants,
Inc.+ 1,330 40,731 5,465 167,366 8,380 256,638
Loewen Group,
Inc. 2,370 64,583 10,900 297,025 14,990 408,478
Marriott
International,
Inc. 4,000 139,000 15,700 545,575 23,600 820,100
O'Charleys, Inc.1,000 11,750 4,550 53,463 6,350 74,613
On Assignment,
Inc.+ 1,300 24,700 5,200 98,800 7,200 136,800
Procter &
Gamble Co. 2,400 159,000 10,200 675,750 15,300 1,013,625
Reebok
International
Ltd. 2,300 81,938 10,100 359,813 15,200 541,500
Rio Hotel &
Casino, Inc.+ 1,625 22,750 6,250 87,500 10,300 144,200
Scientific Games
Holdings, Corp.+1,370 28,428 6,375 132,281 8,750 181,563
Stewart
Enterprises,
Inc. Class A 470 12,690 1,160 31,320 1,610 43,470
Tele-Communications
Inc. Class A 5,400 113,400 23,300 489,300 35,000 735,000
Young Broadcasting
Corp. Class A+ 1,675 37,269 7,800 173,550 10,800 240,300
--------- --------- ---------
1,455,089 6,098,982 8,944,819
ELECTRONICS AND
ELECTRICAL EQUIPMENT* 2.6% 5.7% 4.8%
- -------------------------------------------------------------------------
Actel Corp.+ 2,300 29,325 10,800 137,700 14,700 187,425
Applied
Materials,
Inc.+ 1,900 104,738 8,800 485,100 12,300 678,038
Austria Mikro
Systeme
International
Ord. ADR
(Austria) -- -- 2,000 186,690 -- --
BBC Brown
Boveri & Cie
ADR (Switzerland) 80 76,009 240 228,026 480 456,053
Baldor Electric
Co. 2,155 59,801 9,670 268,343 13,635 378,371
Cherry Corp.
Class A 2,630 42,080 11,800 188,800 16,600 265,600
Credence Systems
Corp.+ 1,692 52,875 8,142 254,438 10,923 341,344
Duracell
International,
Inc. 1,600 71,600 7,100 317,725 10,600 474,350
Emerson Electric
Co. 1,700 113,050 7,300 485,450 11,000 731,500
Exar Corp.+ 2,585 55,578 13,825 297,238 16,615 357,223
Franklin
Electronic
Publishers, Inc.1,000 28,125 4,300 120,938 5,900 165,938
Futaba Corp.
ADR (Japan) 2,000 96,919 4,000 193,839 9,000 436,137
General Electric
Co. PLC ADR
(United Kingdom)18,800 90,150 50,000 239,760 87,100 417,662
General Instrument
Corp.+ 2,500 86,875 10,600 368,350 15,900 552,525
Iberdrola S.A.
(Spain) 7,500 44,484 17,300 102,610 45,000 266,904
Intel Corp. 1,400 118,825 6,000 509,250 9,000 763,875
Leader Universal -- -- -- -- 23,000 80,047
Leader Universal
(New Class A) -- -- -- -- 15,333 50,331
Mabuchi Motor
(Japan) -- -- 2,000 134,995 6,000 404,984
Matsushita
Electric
Industrial Co.,
Ltd. ADR
(Japan) 4,000 $64,613 13,000 $209,992 23,000 $371,524
Maxim
Integrated
Products Inc.+ 2,180 79,570 9,740 355,510 13,590 496,035
Murata
Manufacturing
Co. Ltd. ADR
(Japan) 3,100 120,538 8,200 318,841 13,600 528,810
Nichicon 8,000 122,765 -- -- -- --
Nippondenso
Co., Ltd.
ADR (Japan) 4,000 77,997 10,000 194,993 20,000 389,986
Oak Industries,
Inc. 1,550 39,913 6,975 179,606 9,775 251,706
Omron Tateisi
Electronics Co.
ADR (Japan) 4,000 78,920 12,000 236,760 18,000 355,140
Polaroid
Corporation 6,400 222,400 26,500 920,875 40,000 1,390,000
Sanmina Corp. 1,765 57,363 7,980 259,350 11,290 366,925
Secom, Inc. -- -- -- -- 6,000 370,370
Siebe PLC ADR
(United
Kingdom) 10,307 91,835 24,011 213,938 49,477 440,840
Teradyne, Inc. 765 31,748 3,760 156,040 4,990 207,085
Texas Instruments,
Inc. 1,600 141,600 6,900 610,650 10,400 920,400
Ultratech Stepper,
Inc.+ 595 28,932 2,775 134,934 3,840 186,720
Westinghouse
Electric Corp. 15,800 223,175 65,900 930,838 101,300 1,430,863
--------- --------- ---------
2,451,803 9,241,579 14,714,711
ENERGY-RELATED* --% --% 0.1%
- -------------------------------------------------------------------------
IHC Caland N.V.
(Netherlands) 850 21,142 2,150 53,478 12,000 298,481
ENTERTAINMENT* --% 0.1% 0.1%
- -------------------------------------------------------------------------
Speedway
Motorsports, Inc.1,305 23,490 6,100 109,800 8,375 150,750
Environmental Control* 0.4% 0.9% 0.8%
- -------------------------------------------------------------------------
Browning-Ferris
Industries, Inc.3,800 129,200 16,300 554,200 24,400 829,600
WMX Technologies,
Inc. 8,300 228,250 34,500 948,750 53,100 1,460,250
--------- --------- ---------
357,450 1,502,950 2,289,850
FOOD AND BEVERAGES* 1.3% 2.9% 2.4%
- -------------------------------------------------------------------------
Argyll Group
PLC ADR (United
Kingdom) 11,619 54,021 38,043 176,877 65,000 302,211
Coca-Cola Co. 2,500 141,250 11,900 672,350 16,000 904,000
ConAgra, Inc. 3,700 122,563 15,300 506,813 23,000 761,875
Docks de France
ADR (France) 400 61,686 80 12,337 200 30,843
Dole Food Co. 7,500 217,500 31,400 910,600 48,200 1,397,800
Greencore Group
PLC ADR
(Ireland) 12,832 87,779 41,232 282,052 81,032 554,307
Guinness PLC
ADR (United
Kingdom) 3,900 29,442 1,900 14,343 11,100 83,796
IBP, Inc. 6,000 195,750 25,100 818,888 38,600 1,259,325
Nestle S.A. ADR
(Registered Shares)
(Switzerland) 100 97,572 200 195,143 425 414,680
PepsiCo, Inc. 3,600 140,400 15,400 600,600 23,200 904,800
Sara Lee Corp. 4,300 112,338 18,600 485,925 27,900 728,888
--------- --------- ---------
1,260,301 4,675,928 7,342,525
FOREST PRODUCTS* 0.2% 0.4% 0.3%
- -------------------------------------------------------------------------
Amcor Ltd. ADR
(Australia) 3,526 24,224 4,442 30,517 8,353 57,387
Mayr-Melnhof
Karton AG ADR
(Austria)+ 700 42,671 4,270 260,291 5,000 304,790
Rengo Co. Ltd.
ADR (Japan) 5,000 37,845 12,000 90,827 25,000 189,223
Repola ADR
(Finland) 5,900 98,254 15,000 249,798 28,500 474,616
--------- --------- ---------
202,994 631,433 1,026,016
HEALTH CARE* 2.8% 7.1% 5.5%
- -------------------------------------------------------------------------
Advantage Health
Corp.+ 2,295 $54,506 10,550 $250,563 14,095 $334,756
Amgen, Inc.+ 1,500 101,063 6,500 437,938 9,800 660,275
Baxter
International,
Inc. 6,800 222,700 28,200 923,550 43,400 1,421,350
Bristol-Myers
Squibb Co. 3,400 214,200 14,100 888,300 21,700 1,367,100
Columbia/HCA
Healthcare Corp.2,200 94,600 9,400 404,200 14,100 606,300
Community Health
Systems+ 1,400 44,100 6,500 204,750 8,900 280,350
Coventry Corp.+ 1,000 29,000 4,600 133,400 6,200 179,800
Essilor
International
ADP ADR (France) 600 72,425 1,500 181,061 2,500 301,769
Grancare, Inc.+ 1,395 23,715 6,495 110,415 9,030 153,510
Health Management
Associates, Inc.+2,187 63,150 10,370 299,434 14,102 407,195
Health Management,
Inc. 1,075 20,156 3,435 64,406 7,350 137,813
Healthcare
Services Group, Inc.1,335 16,020 6,090 73,080 8,475 101,700
HEALTHSOUTH
Rehabilitation
Corp.+ 945 38,391 4,495 182,609 6,120 248,625
Horizon Healthcare
Corp.+ 2,215 59,251 10,345 276,729 14,180 379,315
Humana, Inc. 5,000 128,125 21,800 558,625 32,700 837,938
I-Stat Corp. 1,275 31,875 5,900 147,500 8,200 205,000
Idexx Laboratories,
Inc.+ 950 39,425 4,200 174,300 5,780 239,870
Johnson & Johnson3,400 202,300 14,600 868,700 21,900 1,303,050
Lilly (Eli) & Co.3,800 277,875 15,700 1,148,063 24,100 1,762,313
Lincare Holdings,
Inc.+ 2,375 70,359 10,135 300,249 14,565 431,488
Living Centers
of America, Inc.+1,475 55,497 7,975 300,059 9,325 350,853
Mariner Health
Group, Inc.+ 820 15,888 3,755 72,753 5,325 103,172
Medaphis Corp.+ 550 34,650 2,550 160,650 3,500 220,500
Medisense Inc.+ 1,310 25,873 5,950 117,513 7,900 156,025
Mid Atlantic
Medical Services,
Inc.+ 1,550 34,294 7,235 160,074 10,020 221,693
Pfizer, Inc. 1,500 128,625 6,400 548,800 9,600 823,200
Quantum Health
Resources, Inc.+ 900 18,675 4,150 86,113 5,755 119,416
Ren Corp-USA+ 1,030 16,480 3,725 59,600 6,310 100,960
Renal Treatment
Centers, Inc.+ 820 20,910 3,220 82,110 5,125 130,688
Sierra Health
Services+ 1,375 45,203 6,440 211,715 8,825 290,122
Sola International,
Inc. 2,100 45,150 9,025 194,038 12,280 264,020
U.S. Healthcare
Inc. 2,500 110,625 10,800 477,900 16,200 716,850
United American
Healthcare Corp.+1,150 24,294 5,375 113,547 7,330 154,846
United Healthcare
Corp. 2,000 93,500 8,500 397,375 12,800 598,400
Vencor, Inc.+ 832 29,640 3,562 126,896 5,212 185,678
Warner-Lambert Co.1,300 101,725 5,800 453,850 8,700 680,775
Wellcare Management
Group, Inc.+ 1,535 52,574 7,225 247,456 9,700 332,225
--------- --------- ---------
2,656,839 11,438,321 16,808,940
Insurance and Finance* 4.9% 10.6% 8.9%
- -------------------------------------------------------------------------
ABN AMRO Holding N.V.
(Netherlands) 200 7,352 300 11,027 5,600 205,845
Aetna Life &
Casualty Co. 3,800 216,600 15,700 894,900 24,100 1,373,700
Allied Irish Banks
PLC ADR
(Ireland) 23,307 101,630 41,025 178,890 103,323 450,540
American
International
Group, Inc. 1,000 104,250 4,400 458,700 6,600 688,050
Argentaria
(Spain) 2,000 58,442 4,100 119,806 5,800 169,482
Asahi Bank
Ltd. (Japan) 8,000 94,150 19,000 223,607 37,000 435,446
Baer Holdings
ADR (Switzerland) 80 83,709 105 109,868 280 292,980
Banco Frances
Del Rio De La
Plata S.A.
(Argentina) 1,500 9,375 1,200 7,500 4,100 25,625
Banco Frances
Del Rio De
Louisiana Plata
ADR -- $ -- 600 $10,875 -- $ --
Bank of Ireland 8,800 44,363 20,000 100,826 -- --
BankAmerica Corp.2,900 139,925 12,600 607,950 18,900 911,925
Bankers Trust
New York Corp. 3,300 172,425 13,700 715,825 21,000 1,097,250
Barclays Bank
PLC ADR (United
Kingdom) 4,338 43,782 10,684 107,829 37,955 383,065
Barnett Banks,
Inc. 2,100 95,550 9,200 418,600 13,900 632,450
Bear Stearns
Companies, Inc.12,800 236,800 53,400 987,900 82,000 1,517,000
Beneficial Corp.5,300 208,025 22,000 863,500 33,800 1,326,650
CIGNA Corp. 1,200 89,700 5,300 396,175 8,000 598,000
Cetelem Group
ADR (France) 200 43,413 1,300 282,185 2,000 434,131
Christiana
Bank & Trust
ADR (Norway) 12,300 25,554 31,600 65,652 60,100 124,864
Citicorp 3,600 153,000 15,400 654,500 23,100 981,750
Credit Locale
de France ADR
(France) 1,190 99,806 2,960 248,258 5,500 461,291
Crop Growers
Corp. 2,425 64,869 10,800 288,900 15,200 406,600
Daiwa Securities
Co. Ltd. ADR
(Japan) 8,000 91,750 19,000 217,907 36,000 412,877
Danieli Savings
ADR (Italy) 6,200 18,909 11,000 33,549 33,100 100,952
Dean Witter,
Discover & Co. 2,800 114,100 12,200 497,150 18,300 745,725
Development &
Commercial Bank
(Singapore) 9,000 94,368 18,000 188,735 39,000 408,927
Federal National
Mortgage
Association 1,100 89,513 4,900 398,738 7,300 594,038
First Bank
System, Inc. 2,800 113,050 11,700 472,388 17,300 698,488
First USA, Inc. 600 25,050 2,600 108,500 3,700 154,475
Guoco Group Ltd.
ADR (Hong Kong) 4,400 16,333 11,800 43,803 24,600 91,318
HCC Insurance
Holdings, Inc. 1,427 32,821 6,485 149,155 8,685 199,755
HSBC Holdings
PLC ADR (Hong
Kong) 4,000 45,140 10,000 112,850 20,000 225,700
Healthsource,
Inc. 1,515 71,773 7,190 340,626 9,730 460,959
Healthwise of
America, Inc. 1,155 40,714 5,300 186,825 7,200 253,800
Internationale
Nederlanden ADR
(Netherlands) 722 35,683 2,339 115,598 5,649 279,185
Life Partners
Group, Inc. 2,080 40,820 9,775 191,834 13,290 260,816
Lincoln National
Corp. 5,300 213,325 22,000 885,500 33,800 1,360,450
MBNA Corp. 1,500 43,500 6,600 191,400 10,300 298,700
Malayan Banking
Berhard
(Malaysia) 10,000 67,629 18,000 121,732 37,000 250,227
Mitsubishi Bank
(Japan) 4,000 92,766 9,000 208,723 19,000 440,637
Reinsurance Group
America, Inc. 780 21,158 2,900 78,663 4,810 130,471
Royal Insurance
Holdings PLC ADR
(United
Kingdom) 10,000 46,494 42,500 197,600 80,300 373,347
Royal PTT
(Netherlands) 1,000 35,459 3,700 131,199 2,600 92,194
Societe Generale
ADR (France) 415 48,194 1,050 121,935 2,000 232,258
Sovac ADR (France)300 20,760 510 35,291 900 62,279
Student Loan
Marketing Assn. 5,300 184,838 22,000 767,250 33,800 1,178,775
Swiss Reinsurance
(Registered)
(Switzerland)+ 55 36,569 140 93,086 260 172,874
Tokio Marine &
Fire Insurance
Co. Ltd. (The)
ADR (Japan) 5,000 56,825 12,000 136,380 26,000 295,490
Travelers, Inc. 3,500 135,188 15,000 579,375 22,600 872,925
Trenwick
Group Inc. 525 21,984 1,940 81,238 3,620 151,588
USF&G Corp. 15,000 210,000 62,800 879,200 96,500 1,351,000
Union Bank of
Switzerland
(Bearer Shares)
(Switzerland)+ 70 63,479 175 158,698 340 308,327
United Overseas
Bank Ltd. ADR
(Singapore) 9,000 $89,267 25,000 $247,963 40,000 $396,740
Wells Fargo
& Co. 1,500 234,563 6,300 985,163 9,600 1,501,200
Yamaguchi Bank
Ltd. ADR (Japan)6,000 109,381 13,000 236,991 25,000 455,753
Zurich
Versicherungs
(Bearer Shares)
(Switzerland) -- -- 100 102,163 -- --
--------- --------- ---------
4,654,123 17,050,481 27,328,894
METALS AND MINING* 0.8% 1.5% 1.4%
- -------------------------------------------------------------------------
Alumax, Inc.+ 7,500 201,563 31,400 843,875 48,200 1,295,375
Fischer (Georg)
ADR (Bearer
Shares)
(Switzerland) 55 63,135 135 154,967 260 298,455
Freeport-McMoRan
Copper & Gold
Co., Inc.
Class A 265 5,797 1,050 22,969 1,691 36,991
Freeport-McMoRan,
Inc. 12,000 217,500 50,200 909,875 77,200 1,399,250
N.V. Bekaert
S.A. ADR
(Belgium) 119 80,220 229 154,374 600 404,473
Nisshin Steel
Co., Ltd. ADR
(Japan) 20,000 89,996 42,000 188,992 99,000 445,480
Ugine ADR
(France) 790 53,434 2,600 175,859 3,820 258,377
--------- --------- ---------
711,645 2,450,911 4,138,401
OIL AND GAS* 1.4% 3.1% 2.6%
- -------------------------------------------------------------------------
Anadarko
Petroleum Corp. 5,300 231,875 22,000 962,500 33,800 1,478,750
British Petroleum
Co., PLC ADR
(United Kingdom)2,200 184,525 9,300 780,038 14,000 1,174,250
Burmah Oil PLC
ADR (United
Kingdom) 6,250 88,493 15,320 216,913 29,416 416,495
Enron Corp. 3,700 122,100 15,900 524,700 23,900 788,700
MCN Corp. 4,200 77,175 18,200 334,425 27,400 503,475
Mobil Corp. 2,000 185,250 8,800 815,100 13,300 1,231,913
Occidental
Petroleum Corp.10,500 229,688 43,900 960,313 67,500 1,476,563
Repsol S.A.
ADR (Spain) 3,550 100,787 8,200 232,804 15,500 440,056
Societe Nationale
Elf Aquitaine
ADR (France) 1,325 103,739 3,262 255,393 6,259 490,038
--------- --------- ---------
1,323,632 5,082,186 8,000,240
PHARMACEUTICALS* 0.4% 0.7% 0.6%
- -------------------------------------------------------------------------
Astra AB
(Sweden)+ 3,000 79,779 7,500 199,447 15,000 398,894
Dura
Pharmaceutical,
Inc. 2,300 34,213 10,600 157,675 14,100 209,738
Revco D.S., Inc.+2,480 57,040 11,560 265,880 16,005 368,115
Schering AG
ADR (Germany) 140 103,308 356 262,697 645 475,954
Yamanouchi
Pharmaceutical
Co. (Japan) 4,000 87,689 10,000 219,222 23,000 504,211
--------- --------- ---------
362,029 1,104,921 1,956,912
PUBLISHING* 0.1% 0.3% 0.2%
- -------------------------------------------------------------------------
International
Imaging Materials,
Inc.+ 1,000 27,000 4,750 128,250 6,000 162,000
Pearson PLC ADR
(United Kingdom)3,500 31,809 8,800 79,976 17,000 154,499
Singapore Press
ADR (Signapore) 2,000 33,865 12,000 203,188 18,000 304,781
--------- --------- ---------
92,674 411,414 621,280
REAL ESTATE* 0.7% 1.7% 1.4%
- -------------------------------------------------------------------------
Cheung Kong
Holdings Ltd.
ADR (Hong Kong) 4,000 $17,435 22,000 $95,894 29,000 $126,405
Debartolo Realty
Corp. 15,000 211,875 62,800 887,050 96,500 1,363,063
Hong Kong Land
Holdings Ltd.
(Hong Kong) 18,000 39,346 44,000 96,180 84,000 183,616
Meditrust Corp. 6,000 178,500 25,100 746,725 38,600 1,148,350
Nationwide
Health
Properties, Inc.5,300 195,438 22,000 811,250 33,800 1,246,375
United Engineers
(Mayalsia) -- -- 20,000 117,066 38,000 222,425
--------- --------- ---------
642,594 2,754,165 4,290,234
RETAIL* 1.3% 2.9% 2.3%
- -------------------------------------------------------------------------
Cycle & Carriage
Ltd. ADR
(Singapore) 10,000 85,016 22,000 187,035 31,000 263,550
Daiichi Corp.
(Japan) 4,000 78,920 -- -- -- --
Federated
Department
Stores Inc.+ 5,600 123,900 24,400 539,850 36,600 809,775
Gymboree Corp.+ 1,665 42,249 7,165 181,812 10,510 266,691
Hollywood
Entertainment
Corp.+ 2,075 72,625 9,375 328,125 12,975 454,125
Ito-Yokado Co.,
Ltd. ADR (Japan)1,000 49,614 6,000 297,681 7,000 347,295
Jardine Matheson
Holdings
(Singapore)+ 7,000 63,000 9,400 84,600 30,200 271,800
Kroger Co. 8,000 211,000 33,300 878,288 51,100 1,347,763
Office Depot,
Inc.+ 4,600 112,125 19,950 486,281 29,950 730,031
Pep Boys-Manny
Moe & Jack 2,300 71,300 9,800 303,800 14,700 455,700
Rite Aid Corp. 4,100 100,450 17,900 438,550 26,900 659,050
Sears ADR
(United
Kingdom) 42,000 71,102 92,000 155,747 192,000 325,037
Stein Mart,
Inc.+ -- -- 315 3,229 760 7,790
Sunglass Hut
International+ 910 26,959 4,225 125,166 5,825 172,566
Tommy Hilfiger
Corp.+ 2,145 47,190 10,210 224,620 12,710 279,620
Walgreen Co. 2,100 101,063 8,500 409,063 12,700 611,188
Welcome Home,
Inc.+ 1,160 5,075 6,300 27,563 9,000 39,375
--------- --------- ---------
1,261,588 4,671,410 7,041,356
TELECOMMUNICATIONS* 0.2% 0.3% 0.3%
- -------------------------------------------------------------------------
Cable & Wireless
PLC ADR
(United Kingdom) 75 471 137 861 210 1,320
EIS International,
Inc. 1,475 24,706 6,850 114,738 9,400 157,450
Transaction
Network Services
Inc. 2,140 37,183 9,780 169,928 13,275 230,653
Vodafone Group
PLC ADR (United
Kingdom) 25,348 81,512 56,534 181,796 119,494 384,257
--------- --------- ---------
143,872 467,323 773,680
TRANSPORTATION* 1.0% 2.5% 2.0%
- -------------------------------------------------------------------------
Burlington
Northern Inc. 1,400 83,125 6,100 362,188 9,200 546,250
Conrail Inc. 1,200 67,350 5,200 291,850 7,900 443,388
Expeditors
International of
Washington, Inc.2,495 52,395 11,535 242,235 15,410 323,610
Fritz Companies,
Inc.+ 1,005 64,571 5,000 321,250 6,430 413,128
Jurong Shipyard
Ltd. ADR
(Singapore) 5,000 42,862 12,000 102,869 15,000 128,586
K.L.M.-Konin
Luchvaart N.V.
(Netherlands) 1,475 43,489 3,625 106,881 7,100 209,339
Landstar System,
Inc. 1,070 33,705 4,700 148,050 6,450 203,175
Singapore Airlines
Ltd. ADR
(Signapore) 9,000 $89,905 21,000 $209,777 40,000 $399,576
Southern Pacific
Rail Corp.+ 12,000 210,000 50,200 878,500 77,200 1,351,000
Swire Pacific
Ltd. Class A
ADR (Hong Kong) 5,800 39,572 13,500 92,106 28,300 193,082
U.S. Delivery
Systems, Inc.+ 1,650 32,588 9,200 181,700 10,500 207,375
Union Pacific
Corp. 4,100 225,500 17,300 951,500 26,500 1,457,500
Yamato Transport
Co. Ltd. ADR
(Japan) -- -- 6,600 71,582 11,000 119,303
--------- --------- ---------
985,062 3,960,488 5,995,312
UTILITIES* 2.2% 4.6% 3.9%
- -------------------------------------------------------------------------
ALC Communications
Corp.+ 1,135 38,732 5,150 175,744 6,830 233,074
American Telephone
& Telegraph Co. 3,600 186,300 15,400 796,950 23,100 1,195,425
Anglian Water
PLC ADR (United
Kingdom) 3,700 28,711 13,900 107,861 18,300 142,004
Chesapeake
Energy Corp. 922 19,593 512 10,880 1,332 28,305
Chubu Electric
Power, Inc.
(Japan) 2,000 53,536 4,000 107,073 -- --
Ericsson (L. M.)
Telephone Co.
ADR, Class B
(Sweden) 1,600 98,900 6,800 420,325 10,200 630,488
Hidrolectrica
del Cantabrico,
S.A. ADR (Spain)2,400 62,064 8,000 206,880 9,000 232,740
Hirose Electric
Co. Ltd. 1,000 59,882 -- -- 4,000 239,529
Hong Kong Electric
Holdings Ltd.
(Hong Kong) 10,000 32,012 24,500 78,429 46,000 147,255
Houston
Industries Inc. 5,700 217,313 23,400 892,125 37,000 1,410,625
Kurita Wtr.
Ind., Ltd. ADR
(Japan) 3,000 73,382 8,000 195,685 12,000 293,527
LSI Logic
Corp.+ 1,600 84,000 6,900 362,250 10,300 540,750
Motorola, Inc. 2,500 136,563 10,700 584,488 16,000 874,000
NYNEX Corp. 5,300 210,013 22,000 871,750 33,800 1,339,325
North West
Water Group
PLC ADR (United
Kingdom) 8,095 71,995 15,865 141,100 42,255 375,808
Northeast
Utilities 8,000 170,000 32,800 697,000 51,800 1,100,750
Public Service
Co. of Colorado 6,500 199,875 26,300 808,725 41,600 1,279,200
Scientific
Atlanta, Inc. 2,100 49,088 8,900 208,038 13,300 310,888
Southern Electric
PLC (United
Kingdom) 3,100 29,379 10,200 96,665 20,000 189,540
Tele Danmark A/S
ADR (Denmark) 3,300 87,450 9,300 246,450 17,400 461,100
Tokyo Electric
Power (Japan) 3,000 94,150 7,000 219,684 14,000 439,368
Veba (Vereinigte
Elektrizitaets
Bergwerks) AG ADR
(Germany) 330 119,716 785 284,780 1,440 522,399
--------- --------- ---------
2,122,654 7,512,882 11,986,100
TOTAL COMMON STOCKS
(cost $29,182,217,
$111,555,144,
and $173,630,924) 31,389,785 119,987,789 186,734,838
- -------------------------------------------------------------------------
<PAGE>
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C> <C>
U.GOVERNMENTD AGENCY OBLIGATIONS*
Conservative Growth Balanced
24.5% 3.4% 7.3%
Principal Principal Principal
Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
Federal National
Mortgage
Association 8s,
July 1, 2024 $451,929 $447,409 $ -- $ -- $393,421 $389,487
7 1/2s, with
various due
dates to
August 1, 20241,674,239 1,620,348 291,851 282,456 1,225,812 1,186,354
7s, October 25,
2023 408,481 359,336 115,336 101,460 408,481 359,336
8s, June 1, 2024 -- -- 95,936 94,977 -- --
Dwarf TBA 9 1/2s,
April 14, 2010+++1,200,0001,255,875 265,000 277,339 1,000,000 1,046,563
Principal Only
Strips zero %,
February 25,
2017(S)(S) 105,316 100,281 22,753 21,665 81,587 77,686
Government National
Mortgage Association
7 1/2s, with various
due dates to
June 15, 2024 1,202,002 1,159,930 308,398 297,600 799,408 771,426
7s, June 15, 202323,197 21,696 -- -- -- --
7s, with various
dates to
June 15, 2024 -- -- 590,957 552,727 -- --
7s, October 15,
2023 501,212 468,790 -- -- -- --
7s, with various
due dates to
April 15, 20242,395,496 2,240,535 -- -- 3,241,608 3,032,832
Midget 7s, with
various due dates
to June 15, 2009773,275 750,318 144,968 140,664 690,298 669,804
U.S. Treasury
Bonds 7 1/2s,
November 15, 20242,495,0002,499,678 740,000 741,388 2,550,000 2,554,781
U.S. Treasury
Bonds 8 1/8s,
August 8, 20193,245,000 3,434,630 700,000 740,906 2,550,000 2,699,016
U.S. Treasury
Bonds 8 7/8s,
August 15, 2017 215,000 244,428 43,000 48,886 172,000 195,543
U.S. Treasury
Bonds 8s,
November 15, 2021600,000 628,875 135,000 141,497 545,000 571,228
U.S. Treasury
Notes 3 7/8s,
September 30, 19952,600,0002,570,7501,235,0001,221,1063,700,000 3,658,375
U.S. Treasury
Notes 4 5/8s,
February 29, 1996630,000 619,763 135,000 132,806 560,000 550,900
U.S. Treasury
Notes 4s,
January 31, 19962,870,0002,814,394 230,000 225,544 3,010,000 2,951,681
U.S. Treasury
Notes 7 3/8s,
May 15, 1996 1,510,000 1,522,269 345,000 347,803 1,375,000 1,386,172
U.S. Treasury
Notes 7 7/8s,
November 15, 2004455,000 474,622 80,000 83,450 360,000 375,525
--------- --------- ---------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS
(cost $22,918,400,
$5,377,149 and
$22,190,424) $23,233,927 $5,452,274 $22,476,709
- -------------------------------------------------------------------------
Conservative Growth Balanced
14.4% 4.7% 9.8%
FOREIGN BONDS Principal Principal Principal
AND NOTES* Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
AUD Australia
(Government
of) 12s, 200190,000 $73,238 50,000 $40,688 105,000 $85,444
AUD Australia
(Government
of) 13s, 200050,000 41,750 25,000 20,875 50,000 41,750
AUD Australia
(Government
of) 7 1/2s,
2005 1,425,000 888,844 705,000 439,744 3,375,000 2,105,156
AUD Australia
(Government
of) 9s, 2004390,000 271,781 295,000 205,578 720,000 501,750
CAD Canada
(Government
of) deb.
7 1/2s, 1997485,000 343,138 -- -- 800,000 566,000
CAD Canada
(Government
of) deb.
9s, 2004 340,000 249,475 190,000 139,413 735,000 539,306
CAD Canada
(Government
of) deb.
10 1/4s, 2014 -- -- 65,000 52,813 400,000 325,000
DKK Denmark
(Kingdom of)
7s, 2024 3,080,000 436,975 1,605,000 227,709 6,040,000 856,925
DKK Denmark
(Kingdom of)
8s, 2006 2,900,000 496,625 1,755,000 300,544 6,950,000 1,190,188
DEM Deutscheland
(Republic of)
deb. 6 1/4s,
2024 600,000 356,625 420,000 249,638 2,100,000 1,248,188
DEM Deutscheland
(Republic of)
deb. 7 3/8s,
2005 3,460,000 2,545,263 1,910,000 1,405,044 6,535,000 4,807,309
FRF France
(Government
of) OAT
zero %, 20194,990,000134,106 2,820,000 75,78810,970,000 294,819
FRF France (Government of) OAT zero %, 20234,800,000 96,000 3,090,000
61,800 8,610,000 172,200
DEM Germany
(Government
of) bonds
6 3/4s, 2004 -- -- 80,000 56,400 -- --
ITL Italy (Government
of) 12s,
2003 580,000,000324,438270,000,000 151,0311,235,000,000690,828
ITL Italy (Government
of) 8 1/2s,
1999 330,000,000 167,475255,000,000 129,413705,000,000 357,788
ITL Italy
(Government
of) 8 1/2s,
2004 2,425,000,000 1,082,1561,185,000,000528,8065,110,000,0002,280,3
38
Conservative Growth Balanced
FOREIGN BONDS Principal Principal Principal
AND NOTES*(FCD) Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
JPY Japan (Government
of) 4.4s,
2004 174,300,000$2,112,29896,300,000$1,167,036376,300,000$4,560,28
6
NLG Netherlands
(Government of)
7 1/2s, 1999500,000 337,188 300,000 202,313 1,300,000 876,688
ESP Spain (Government
of) 10 1/2s,
2003 28,200,000 201,63021,600,000 154,44060,700,000 434,005
ESP Spain (Government
of) 10 1/4s,
1998 35,700,000 268,19616,300,000 122,45468,600,000 515,358
ESP Spain (Government
of) 10.55s,
1996 17,200,000 135,020 7,000,000 54,95047,000,000 368,950
DEM Treuhand bonds
7 1/8s, 2003715,000 518,822 285,000 206,803 1,495,000 1,084,809
GBP United Kingdom
Treasury Bonds
8s, 2009 355,000 551,581 10,000 15,538 235,000 365,131
GBP United Kingdom
Treasury Bonds
8s, 2009 95,000 147,428 125,000 193,984 165,000 256,059
GBP United Kingdom
Treasury bonds
10s, 2001 190,000 327,750 130,000 224,250 835,000 1,440,375
GBP United Kingdom
Treasury bonds
8 1/2s, 2007233,000 376,878 116,000 187,630 344,000 556,420
GBP United Kingdom
Treasury bonds
8s, 2013 380,000 588,763 300,000 464,813 1,060,000 1,642,338
GBP United Kingdom
Treasury bonds
9 3/4s, 2002275,000 472,656 260,000 446,875 620,000 1,065,625
GBP United Kingdom
Treasury bonds
9s, 2011 70,000 118,169 30,000 50,644 360,000 607,725
- -------------------------------------------------------------------------
TOTAL FOREIGN BONDS AND
NOTES (cost $13,299,276,
$7,367,662 and
$28,978,922) $13,664,268 $7,577,014 $29,836,758
- -------------------------------------------------------------------------
Conservative Growth Balanced
13.4% 4.7% 9.7%
CORPORATE BONDSPrincipal Principal Principal
AND NOTES* Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
AEROSPACE AND DEFENSE* 0.7% 0.2% 0.3%
- -------------------------------------------------------------------------
BE Aerospace sr.
notes, 9 3/4s,
2003 $210,000 $203,700 $135,000 $130,950 $125,000 $121,250
Coltec Industries,
Inc. sr. sub. notes
10 1/4s, 2002 -- -- -- -- 150,000 151,500
McDonald Douglas
medium term notes
8.15s, 1996 350,000 353,938 100,000 101,125 325,000 328,656
UNC, Inc.
9 1/8s, 2003 100,000 92,500 100,000 92,500 305,000 282,125
--------- --------- ---------
650,138 324,575 883,531
AUTOMOTIVE* 0.1% --% --%
- -------------------------------------------------------------------------
Key Plastics Corp.
sr. notes 14s, 199945,000 48,150 25,000 26,750 65,000 69,550
BASIC INDUSTRIAL PRODUCTS* 0.2% 0.1% 0.1%
- -------------------------------------------------------------------------
Ivex Packaging Corp.
sr. sub. notes
12 1/2s, 2002 85,000 88,825 70,000 73,150 245,000 256,025
OSI Specialties
Corp. sr. secd.
disc. deb. stepped-
coupon zero %
(11 1/2s, 4/15/99),
2004++ 100,000 66,000 50,000 33,000 150,000 99,000
--------- --------- ---------
154,825 106,150 355,025
BROADCASTING* 0.5% 0.2% 0.4%
- -------------------------------------------------------------------------
Act III Broadcasting,
Inc. sr. sub. notes
9 5/8s, 2003 100,000 96,500 75,000 72,375 275,000 265,375
Centennial Cellular
Corp. sr. notes
8 7/8s, 2001 125,000 116,250 100,000 93,000 250,000 232,500
Century Communications,
Inc sr. notes
9 1/2s, 2005 -- -- -- -- 250,000 240,000
Pricellular Wireless
144A sr. disc. notes
stepped- coupon zero %
(14s, 11/15/97)
2001++ 225,000 166,500 150,000 111,000 675,000 499,500
SFX Broadcasting,
Inc. sr. sub.
notes 11 3/8s, 200075,000 76,500 100,000 102,000 115,000 117,300
--------- --------- ---------
455,750 378,375 1,354,675
BUILDING AND CONSTRUCTION* 0.3% 0.2% 0.4%
- -------------------------------------------------------------------------
Kaufman & Broad Home
Corp. sr. sub. notes
9 3/8s, 2003 50,000 44,250 100,000 88,500 -- --
Presley Co. sr. notes
12 1/2s, 2001 -- -- -- -- 500,000 415,000
Schuller Intl Corp.
bonds 10 7/8s, 2004105,000110,513 80,000 84,200 315,000 331,538
Scotsman Group, Inc.
sr. notes
9 1/2s, 2000 75,000 71,625 100,000 95,500 245,000 233,975
Walter Industries
Inc. zero %, 1999100,000 101,500 75,000 76,125 300,000 304,500
--------- --------- ---------
327,888 344,325 1,285,013
BUSINESS EQUIPMENT AND SERVICES*0.1% 0.1% 0.1%
- -------------------------------------------------------------------------
Corporate Express, Inc.
sr. sub. notes Ser. B,
9 1/8s, 2004 $30,000 $28,350 $ -- $ -- $50,000 $47,250
Unisys Corp. deb.
13 1/2s, 1997 100,000 109,250 100,000 109,250 300,000 327,750
--------- --------- ---------
137,600 109,250 375,000
CHEMICALS* 0.3% 0.1% 0.4%
- -------------------------------------------------------------------------
Carlisle Plastic sr.
notes 10 1/4s, 1997100,000100,250 75,000 75,188 325,000 325,813
G-I Holdings, Inc.
sr. notes zero %,
1998 125,000 80,625 100,000 64,500 450,000 290,250
Harris Chemical
Corp. sr. sub. notes
10 3/4s, 2003 15,000 14,250 10,000 9,500 25,000 23,750
Harris Chemical sr.
secd. disc. notes
stepped-coupon zero %
(10 1/4s, 1/15/96),
2001++ 120,000 103,800 80,000 69,200 300,000 259,500
OSI Specialty Corp.
sr. sub. notes
9 1/4s, 2003 15,000 14,400 10,000 9,600 375,000 360,000
--------- --------- ---------
313,325 227,988 1,259,313
CONGLOMERATES* 0.1% 0.1% 0.1%
- -------------------------------------------------------------------------
MacAndrews & Forbes
Group, Inc. deb.
12 1/4s, 1996 10,000 10,000 5,000 5,000 15,000 15,000
MacAndrews & Forbes
Holdings, Inc. sub.
deb. notes 13s, 19995,000 5,000 5,000 5,000 15,000 15,000
Valcor, Inc. sr.
notes 9 5/8s, 200375,000 69,000 75,000 69,000 250,000 230,000
--------- --------- ---------
84,000 79,000 260,000
CONSUMER DURABLE GOODS* 0.1% --% 0.1%
- -------------------------------------------------------------------------
Inter-City Products sr.
notes 9 3/4s, 2000100,000 91,750 75,000 68,813 300,000 275,250
CONSUMER NON DURABLES* 0.2% --% 0.2%
- -------------------------------------------------------------------------
Foamex (L.P.)
Capital Corp.
sr. notes
11 1/4s, 2002 15,000 14,925 10,000 9,950 25,000 24,875
Foamex (L.P.)
Capital Corp.
sr. secd. notes
9 1/2s, 2000 75,000 73,125 -- -- -- --
Guess Jeans, Inc.
sr. sub. notes
9 1/2s, 2003 225,000 213,750
Playtex Family
Products Corp. sr.
sub. notes 9s, 200315,000 13,913 10,000 9,275 275,000 255,063
Reeves Industries,
Inc. sr. notes
11s, 2002 50,000 51,625 50,000 51,625 -- --
--------- --------- ---------
153,588 70,850 493,688
CONSUMER SERVICES* 1.8% 0.8% 1.6%
- -------------------------------------------------------------------------
AMC Entertainment,
Inc. sr. sub. deb.
11 7/8s, 2000 75,000 80,250 110,000 117,700 125,000 133,750
AMC Entertainment,
Inc. sr. sub. deb.
12 5/8s, 2002 66,000 71,940 40,000 43,600 370,000 403,300
Adelphia
Communications
Corp. sr. notes
12 1/2s, 2002 $100,000 $95,500 $75,000 $71,625 $250,000 $238,750
Cablevision Systems
Corp. sr. sub. deb.
9 7/8s, 2013 -- -- -- -- 100,000 95,500
Cellular, Inc. sr.
sub. disc. notes
stepped-coupon zero %
(11 3/4s, 9/1/98),
2003++ -- -- -- -- 175,000 120,750
Century
Communications
Corp. notes
9 3/4s, 2002 150,000 147,750 90,000 88,650 10,000 9,850
Century
Communications
Corp. sr. sub.
deb. 11 7/8s, 200315,000 15,713 10,000 10,475 25,000 26,188
Comcast Cellular
Corp. sr.
participating
notes ser. A,
zero %, 2000 -- -- 100,000 72,000 -- --
Continental
Cablevision, Inc.
sr. deb. 9s, 200845,000 42,525 20,000 18,900 110,000 103,950
Continental
Cablevision, Inc.
sr. note 8 1/2s, 200170,00065,800 45,000 42,300 135,000 126,900
Falcon Holdings
Group, Inc. sr.
sub. notes
11s, 2003++++ 144,455 125,676 127,760 111,151 272,216 236,828
General Media
Corp. sr. secd.
notes 10
5/8s, 2000 150,000 124,500 85,000 70,550 425,000 352,750
Insight
Communications
Co. sr. sub. notes
stepped-coupon
8 1/4s, (11 1/4s,
3/1/96), 2000++ 90,000 87,075 60,000 58,050 275,000 266,063
John Q. Hammons
Hotels 1st. mtge.
notes 8 7/8s, 200440,000 37,300 20,000 18,650 310,000 289,075
La Quinta Motor
Inns Inc. deb.
9 1/4s, 2003 75,000 72,000 55,000 52,800 300,000 288,000
Marcus Cable Co.
(L.P.) sr. sub. disc.
note stepped-coupon
zero % (13 1/2s,
8/1/99), 2004++ 230,000 131,100 150,000 85,500 775,000 441,750
Marvel Parent
Holdings, Inc.
sr. secd. disc.
notes zero %, 199845,000 28,125 -- -- 80,000 50,000
NEXTEL
Communications,
Inc. sr. disc.
notes stepped-
coupon zero %
(11 1/2s, 9/1/98),
2003++ 175,000 77,438 200,000 88,500 750,000 331,875
Pioneer Finance
Corp. gtd. 1st mtge.
13 1/2s, 1998 -- -- -- -- 25,000 19,875
Red Roof Inns sr.
notes 9 5/8s, 200375,000 72,000 50,000 48,000 500,000 480,000
Summit
Communications
Group, Inc. sr.
sub. deb.
10 1/2s, 2005 75,000 78,000 75,000 78,000 300,000 312,000
U.S. Banknote Corp.
sr. notes 10 3/8s,
2002 100,000 75,000 75,000 56,250 275,000 206,250
Universal Outdoor,
Inc. sub. deb. 11s,
2003 275,000 254,375 125,000 115,625 275,000 254,375
--------- --------- ---------
1,682,067 1,248,326 4,787,779
ELECTRONICS AND ELECTRICAL EQUIPMENT* 0.6% 0.2% 0.5%
- -------------------------------------------------------------------------
Ametek, Inc. sr.
notes 9 3/4s, 2004$75,000 $77,813 $75,000 $77,813 $325,000 $337,188
Amphenol Corp.
sr. sub. notes
12 3/4s,2002 -- -- 25,000 28,000 500,000 519,063
Iberdrola S.A.
notes, 7 1/2s,
2002 375,000 366,094 75,000 73,219 325,000 317,281
International
Semi-Tech. Corp.
sr. disc. notes
stepped-coupon
zero % (11 1/2s,
8/15/00), 2003++185,000 81,400 200,000 88,000 588,000 258,720
--------- --------- ---------
525,307 267,032 1,432,252
ENTERTAINMENT* 0.3% 0.2% 0.3%
- -------------------------------------------------------------------------
Caesars World Inc.
sr. sub. notes
8 7/8s, 2002 70,000 71,050 45,000 45,675 135,000 137,025
MGM Grand Hotels
Fing. Corp. 1st
mtge. 12s, 1997 -- -- 50,000 55,125 30,000 33,075
Time Warner Inc.
stepped- coupon
notes zero %
(11s, 8/1/95),
2002++ 75,000 72,844 75,000 72,844 300,000 291,375
Viacom International,
Inc. sub. deb.
8s, 2006 175,000 158,375 115,000 104,075 615,000 556,575
--------- --------- ---------
302,269 277,719 1,018,050
FOOD AND BEVERAGES* 0.1% 0.1% 0.2%
- -------------------------------------------------------------------------
Chiquita Brands
International Inc.
sub. deb.
11 1/2s, 2001 15,000 15,300 10,000 10,200 25,000 25,500
Rykoff Sexton sr.
sub. notes
8 7/8s, 2003 -- -- 100,000 94,500 350,000 330,750
Stater Brothers sr.
notes 144A
11s, 2001 40,000 38,400 20,000 19,200 125,000 120,000
--------- --------- ---------
53,700 123,900 476,250
FOREST PRODUCTS* 0.4% 0.2% 0.5%
- -------------------------------------------------------------------------
Gaylord Container Corp.
sr. notes 11 1/2s,
2001 140,000 147,000 160,000 168,000 300,000 315,000
Gaylord Container
Corp. sr. sub.
disc. deb. stepped-
coupon zero %
(12 3/4s, 5/15/96),
2005++ 125,000 118,750 50,000 47,500 600,000 570,000
Riverwood
International
Corp. sr. sub.
notes 11 1/4s, 2002 -- -- 50,000 52,750 500,000 512,500
Stone Container
Corp. deb. sr. sub.
notes 11 1/2s, 199915,000 15,488 40,000 41,300 100,000 103,250
Stone Container
Corp. sr. notes
11 1/2s, 2004 75,000 78,750 50,000 52,500 250,000 262,500
Stone Container
Corp. sr. sub.
notes 10 3/4s, 199715,000 15,413 10,000 10,275 30,000 30,825
--------- --------- ---------
375,401 372,325 1,794,075
HEALTH CARE* 0.5% 0.2% 0.5%
- -------------------------------------------------------------------------
American Medical
International Inc.
sr. sub. 13 1/2s,
2001 $30,000 $33,150 $ -- $ -- $ -- $ --
Community Health
Systems sr. sub.
deb. 10 1/4s, 2003100,000 102,000 75,000 76,500 300,000 306,000
Healthsouth
Rehabilitation
Corp. sr. sub.
notes 9 1/2s, 200125,000 25,063 10,000 10,025 15,000 15,038
McGaw, Inc. sr.
notes 10 3/8s, 1999100,000103,500 100,000 103,500 500,000 517,500
National Medical
Enterprises Inc.
sr. notes
10 1/8s, 2005 80,000 82,100 95,000 97,494 200,000 205,250
National Medical
Enterprises Inc.
sr. notes
9 5/8s, 2002 -- -- -- -- 100,000 102,250
Paracelsus
Healthcare Corp.
sr. sub. notes
9 7/8s, 2003 125,000 122,500 100,000 98,000 310,000 303,800
--------- --------- ---------
468,313 385,519 1,449,838
INSURANCE AND FINANCE* 2.3% 0.6% 1.2%
- -------------------------------------------------------------------------
American Annuity
Group, Inc. sr.
sub. notes
11.125s, 2003 100,000 101,750 80,000 81,400 330,000 335,775
Associates Corp.
med. term notes
5.49s, 1999 60,000 55,913 10,000 9,319 25,000 23,297
Banponce Corp.
med. term notes
5.48s, 1998 150,000 139,406 25,000 23,234 80,000 74,350
Capital One Bank
notes 8 5/8s,
1997 600,000 610,125 140,000 142,363 550,000 559,281
Comdata Network,
Inc. sr. notes
12 1/2s, 1999 60,000 64,125 60,000 64,125 285,000 304,594
Comdata Network,
Inc. sr. sub.
deb. 13 1/4s, 200215,000 16,350 10,000 10,900 25,000 27,250
Delaware Management
Holdings, Inc. sr.
notes Ser. B,
10 1/4s, 2004 100,000 109,000 75,000 81,750 300,000 327,000
First Federal
Financial Corp.
notes 11 3/4s,
2004 125,000 126,563 100,000 101,250 400,000 405,000
First National
Bank of Boston
Corp. sub. notes
8s, 2004 325,000 320,328 75,000 73,922 300,000 295,688
General Motors
Acceptance Corp.
med. term notes
6 3/4s, 1996 200,000 199,375 30,000 29,906 110,000 109,656
Keystone Group,
Inc. sr. secd.
notes 9 3/4s,
2003 100,000 97,500 75,000 73,125 540,000 526,500
PSF Finance L.P.
sr. notes 12 1/4s,
2004 140,000 144,463 100,000 103,188 435,000 448,866
Reliance Group
Holdings, Inc sr.
notes 9s, 2000 -- -- -- -- 250,000 234,375
Reliance Group
Holdings, Inc. sr.
sub. deb. 9 3/4s,
2003 80,000 73,200 85,000 77,775 25,000 22,875
Royal Bank of
Scotland Capital
Corp. deb.
(Scotland) 10 1/8s,
2004 75,000 85,078 20,000 22,688 50,000 56,719
--------- --------- ---------
2,143,176 894,945 3,751,226
METALS AND MINING* 0.2% 0.1% 0.2%
- -------------------------------------------------------------------------
Geneva Steel corp.
sr. notes 9 1/2s,
2004 $15,000 $12,150 $10,000 $8,100 $25,000 $20,250
Haynes International,
Inc. sr. sub. notes
13 1/2s, 1999 25,000 16,250 25,000 16,250 200,000 130,000
Inland Steel
Industries, Inc.
notes 12 3/4s, 200290,000 97,650 60,000 65,100 300,000 325,500
Jorgensen Earle
M. Co. sr. notes
10 3/4s, 2000 25,000 24,188 -- -- -- --
--------- --------- ---------
150,238 89,450 475,750
MOTION PICTURE DISTRIBUTION* 0.1% --% 0.2%
- -------------------------------------------------------------------------
Plitt Theatres,
Inc. sr. sub. notes
10 7/8s, 2004 -- -- -- -- 500,000 493,750
United Artists notes
11 1/2s, 2002 75,000 80,250 50,000 53,500 125,000 133,750
--------- --------- ---------
80,250 53,500 627,500
OIL AND GAS* 0.9% 0.2% 0.4%
- -------------------------------------------------------------------------
Arkla, Inc. deb.
8.90s, 2006 100,000 99,313 75,000 74,484 300,000 297,938
Occidental Petroleum
Corp. 9 1/4s, 2019650,000 719,469 175,000 193,703 600,000 664,125
Oryx Energy Co. deb.
9 3/4s, 1998 -- -- -- -- 250,000 251,250
Transcontinential
Gas Pipe Line Corp.
deb. 9 1/8s, 2017 -- -- 100,000 104,000 -- --
--------- --------- ---------
818,782 372,187 1,213,313
REAL ESTATE* 0.2% 0.1% 0.1%
- -------------------------------------------------------------------------
Chelsea Piers 144A
Ser. B, stepped-
coupon zero %
(11s, 6/15/99),
2009++ 10,000 8,475 5,000 4,238 20,000 16,950
Chelsea Piers
Ser. B stepped-
coupon zero %
(12 1/2s, 6/15/96),
2004++ 175,000 150,500 110,000 94,600 325,000 279,500
--------- --------- ---------
158,975 98,838 296,450
Retail* 1.0% 0.3% 0.6%
- -------------------------------------------------------------------------
County Seat Stores
Inc. sr. sub.
notes 12s, 2001 110,000 109,450 65,000 64,675 200,000 199,000
Finlay Enterprises,
Inc. sr. notes
10 5/8s, 2003 15,000 13,950 10,000 9,300 25,000 23,250
Grand Union Co.
sr. sub. notes
12 1/4s, 2002
(in default)+ 185,000 62,900 235,000 79,900 565,000 192,100
Loehmanns'
Holdings, Inc.
sr. sub notes
10 1/2s, 1997 -- -- 50,000 49,500 -- --
Loehmanns'
Holdings, Inc.
sr. sub. notes
13 3/4s, 1999 75,000 72,938 40,000 38,900 375,000 364,688
Revco D.S., Inc.
sr. notes
9 1/8s, 2000 75,000 76,688 50,000 51,125 100,000 102,250
Safeway Stores
10s, 2002 50,000 53,500 30,000 30,975 200,000 214,000
Sears Roebuck &
Co. med. term
notes 5.54s, 1999300,000 276,750 50,000 46,125 160,000 147,600
Waban, Inc. sr.
sub. notes
11s, 2004 $100,000 $101,000 $100,000 $101,000 $300,000 $303,000
Wal-Mart Stores,
Inc. notes 8s, 2006200,000204,125 40,000 40,825 150,000 153,094
--------- --------- ---------
971,301 512,325 1,698,982
TELECOMMUNICATIONS* 0.5% 0.2% 0.4%
- -------------------------------------------------------------------------
Call-Net Enterprises
stepped-coupon zero %
(13 1/4s, 12/1/99),
2004++ 190,000 104,025 160,000 87,600 585,000 320,288
Dial Call Communication
sr. disc. notes Ser. B,
stepped-coupon zero %
(10 1/4s, 12/15/98),
2005++ 75,000 25,500 40,000 13,600 135,000 45,900
Horizon Cellular
Telephone Co. sr.
sub. disc. notes
Ser. B, stepped-
coupon zero %
(11 3/8s, 10/1/97),
2000++ 150,000 113,625 125,000 94,688 400,000 303,000
K-III Communications
Corp. sr. notes
10 1/4s, 2004 75,000 76,313 40,000 40,700 135,000 137,363
MFS Communications
sr. disc. notes
stepped-coupon zero %
(9 3/8s, 1/15/99),
2004++ 20,000 12,650 15,000 9,488 35,000 22,138
Mobile
Telecommunications
Tech. sr. notes
13 1/2s, 2002 100,000 103,875 75,000 77,906 275,000 285,656
--------- --------- ---------
435,988 323,982 1,114,345
TRANSPORTATION* 0.1% 0.1% 0.1%
- -------------------------------------------------------------------------
Blue Bird Body Co.
sr. sub. deb. Ser.
B, 11 3/4s, 2002 85,000 85,850 85,000 85,850 450,000 454,500
UTILITIES* 1.8% 0.4% 0.9%
- -------------------------------------------------------------------------
Chesapeake Energy
Corp. sr. exch.
notes 12s, 2001 144A45,000 46,800 25,000 26,000 140,000 145,600
Cleveland Electric
Illuminating
9s, 2023 100,000 88,938 75,000 66,703 300,000 266,813
Commonwealth
Edison Co. 1st
mtge. 6s, 1998 450,000 428,344 100,000 95,188 400,000 380,750
First PV Funding
Corp. deb.
10.15s, 2016 90,000 88,200 75,000 73,500 300,000 294,000
GTE Corp. deb.
8 3/4s, 2021 500,000 519,375 110,000 114,263 450,000 467,438
Long Island
Lighting Co. Ser.
P, 5 1/4s, 1996 110,000 108,419 20,000 19,713 57,000 56,181
Long Island
Lighting Co.
deb. 9s, 2022 75,000 63,328 75,000 63,328 250,000 211,094
Midland Funding
Corp. II deb.
Ser. A,
11 3/4s, 2005 25,000 24,750 100,000 99,000 229,054 229,627
Midland Funding
Corp. II deb. Ser.
B, 13 1/4s, 2006100,000 103,500 53,000 54,855 200,000 207,000
Public Service
Co. of New Hampshire
deb. 15.23s, 2000100,000 117,000 65,000 76,050 300,000 351,000
Puget Sound
Power & Light
Co. 1st mtge.
7 7/8s, 1997 $60,000 $60,600 $10,000 $10,100 $25,000 $25,250
Puget Sound
Power & Light
Co. 1st mtge. 8 1/4s, 1995100,000 100,563 20,000 20,113 55,000
55,309
--------- --------- ---------
1,749,817 718,813 2,690,062
TOTAL CORPORATE BONDS
AND NOTES (cost $12,359,408,
$7,248,100 and $29,144,133) $12,418,448 $7,560,787
$29,891,417
- -------------------------------------------------------------------------
Conservative Growth Balanced
3.1% 0.4% 0.8%
ASSET BACKED Principal Principal Principal
SECURITIES* Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
Chase Manhattan
Credit Card Master
Trust, Ser. 91-1,
8 3/4s, 1999 $375,000 $381,797 $70,000 $71,269 $285,000 $290,166
Chase Manhattan
Credit Card Master
Trust, Ser. 91-2,
7.65s, 1998 565,000 566,413 130,000 130,325 505,000 506,263
Discover Card Trust
91-BA 8 5/8s, 1998455,000 462,109 95,000 96,484 400,000 406,250
First Deposit Master
Trust Ser. 93-2A,
5 3/4s, 2001 195,000 186,591 50,000 47,844 175,000 167,453
Green Tree Financial
Corp. Ser, 94-2A,
6.8s, 2026 325,000 324,086 100,000 99,719 300,000 299,156
Merrill Lynch
Mortgage Investors,
Inc. 88-RS
9.85, 2008 228,968 230,399 53,588 53,923 204,610 205,889
Standard Credit
Card Master Trust
91-1A, 8 1/2s, 1996455,000462,394 95,000 96,544 395,000 401,419
Standard Credit
Card Master Trust
91-4A 8s, 1997 285,000 288,206 50,000 50,563 160,000 161,800
--------- --------- ---------
TOTAL ASSET-BACKED
SECURITIES (cost $2,919,795,
$651,079 and $2,497,059) $2,901,995 $646,671 $2,438,396
- -------------------------------------------------------------------------
Conservative Growth Balanced
COLLATERALIZED 0.5% 0.1% 0.1%
MORTGAGE Principal Principal Principal
OBLIGATIONS* Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
Chase Mortgage
Finance Corp. 94-1
B-2 6.601s, 2025$196,124 $163,947 $ -- $ -- $196,124 $163,947
GE Capital
Mortgage Services,
Inc. Ser. 94-8A
6s, 2024 375,000 356,836 90,000 85,641 335,000 318,773
--------- --------- ---------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS
(cost $516,835, $84,178
and $479,423) $520,783 $85,641 $482,720
- -------------------------------------------------------------------------
Conservative Growth Balanced
0.8% 0.3% 0.3%
YANKEE BONDS Principal Principal Principal
AND NOTES* Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
CF Cable Tv, Inc.
sr. notes 11 5/8s,
2005 $100,000 $102,500 $75,000 $76,875 $300,000 $307,500
Eletson Holdings,
Inc. mtge. notes
9 1/4s, 2003 45,000 42,188 75,000 70,313 65,000 60,938
Fresh Del Monte
Produce Corp. sr.
notes, Ser. B,
10s, 2003 65,000 50,050 45,000 34,650 105,000 80,850
Grupo Industrial
Durango sr. notes
12s, 2001 100,000 84,625 100,000 84,625 -- --
Maxus Energy Corp.
global notes
9 7/8s, 2002 100,000 88,000 50,000 44,000 175,000 154,000
National Bank of
Canada sub. notes
8 1/8s, 2004 300,000 300,000 75,000 75,000 250,000 250,000
Sifto Canada, Inc.
sr. notes
8 1/2s, 2000 25,000 23,250 125,000 116,250 -- --
Videotron Groupe
LTEE sr. sub. notes
10 1/4s, 2002 75,000 75,750 50,000 50,500 125,000 126,250
--------- --------- ---------
TOTAL YANKEE BONDS
AND NOTES (cost $798,335,
$576,362 and $1,004,793) $766,363 $552,213 $979,538
- -------------------------------------------------------------------------
Conservative Growth Balanced
0.5% 0.4% 0.5%
Number of Number of Number of
UNITS* Units Value Units Value Units Value
- -------------------------------------------------------------------------
Celcaribe S.A.
144A units stepped-
coupon zero %
(13 1/2s, 3/15/98),
2004++ 2 $17,015 3 $25,523 22 $187,165
Echostar
Communication
Corp. units
stepped-coupon
zero % (12 7/8s,
6/1/99), 2004++ 310 148,800 200 96,000 575 276,000
Hollywood Casino
144A units
13 1/2s, 1998 100,000 104,000 75,000 78,000 200,000 208,000
ICF Kaiser
International,
Inc. sr. sub.
units 12s, 2003 10 9,075 5 4,538 10 9,075
Smithkline Beecham
PLC ADR 2,500 93,750 10,900 408,750 16,300 611,250
Total Renal Care
units stepped-
coupon zero %
(12s, 8/15/99),
2004++ 100 88,000 60 52,800 290 255,200
--------- --------- ---------
TOTAL UNITS (cost
$463,408, $683,242
and $1,553,444) $460,640 $665,611 $1,546,690
- -------------------------------------------------------------------------
Conservative Growth Balanced
0.2% 0.1% 0.2%
Principal Principal Principal
PREFERRED STOCKS*Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
California Federal
Bank Ser. B, $10.625,
exch. pfd. 1,650 $168,300 1,050 $107,100 4,100 $418,200
Pantry Pride Inc.
Ser. B, $14.875 pfd.500 50,000 152 15,200 800 80,000
--------- --------- ---------
TOTAL PREFERRED STOCKS
(cost $224,925, $126,951
and $515,370) $218,300 $122,300 $498,200
- -------------------------------------------------------------------------
PUT OPTIONS Conservative Growth Balanced
PURCHASED* 0.1% --% 0.1%
(cost $41,371,Expiration
$23,095 and Date/
$89,971) Strike PriceCurrency ValueCurrency Value Currency Value
- -------------------------------------------------------------------------
JPY Japanese Yen
in exchange
for U.S.
DollarsMay 95/10482,400,000$100,39646,000,000$56,046179,200,000$218,
337
- -------------------------------------------------------------------------
Conservative Growth Balanced
0.1% 0.1% 0.1%
Expiration
WARRANTS*+ Date Shares Value Shares Value Sharess Value
- -------------------------------------------------------------------------
County Seat
Holdings, Inc. 10/15/98 110 $2,200 65 $1,300 200 $4,000
Danieli & Co.
(Italy) 11/30/99 1,550 1,095 3,350 2,367 4,500 3,180
General Media
Corp. 144A 12/31/00 150 1,500 85 850 425 4,250
OSI Specialties
Corp. 144A 4/15/99 100 2,000 50 1,000 150 3,000
UCC Investor
Holding,
Inc. 144A 10/30/99 20 260 10 130 30 390
---- ---- ----
TOTAL WARRANTS
(cost $4,606,
$2,656 and $9,795) $7,055 $5,647 $14,820
- -------------------------------------------------------------------------
Conservative Growth Balanced
12.3% 13.1% 11.5%
Principal Principal Principal
PREFERRED STOCKS*Amount Value Amount Value Amount Value
- -------------------------------------------------------------------------
Federal Home
Loan Banks 5.89s,
April 5, 1995 $ -- $ --$5,000,000$4,996,728 $ -- $ --
Federal Home
Loan Mortgage
Corp. 5.92s,
April 20, 1995 -- -- 5,000,000 4,984,299 5,000,000 4,984,378
Federal Home
Loan Mortgage
Corp. 5.92s,
April 13, 19955,000,000 4,990,133 5,000,000 4,990,13313,000,00012,974,347
Federal National
Mortgage
Association
5.92s, April 18,
1995 -- -- 10,000,000 9,972,044
Interest in
$510,221,000
joint repurchase
agreement dated
March 31, 1995
with Goldman Sachs
& Co., due
April 3, 1995
with respect to
various U.S. Treasury
obligations --
maturity value of
$6,614,612,
$6,105,193 and
$7,509,928 for
an effective yield
of 6.28% 6,610,000 6,611,153 6,102,000 6,103,064 7,506,000 7,507,309
--------- --------- ---------
TOTAL SHORT-TERM
INVESTMENTS
(cost $11,601,286,
$21,074,224 and
$35,438,078) $11,601,286 $21,074,224 $35,438,07
8
- -------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $94,329,862,
$154,769,842 and
$295,532,336)*** $97,283,246 $163,786,217 $310,556,501
- -------------------------------------------------------------------------
<FN>
NOTES
* Percentages indicated are based on net as follows:
Net Assets Class A Class B Class C Class M Class Y
- -------------------------------------------------------------------------
Conservative$94,348,194 $8.41 $8.39 $8.37 8.39 $8.40
Growth 161,479,103 8.70 8.66 8.63 8.69 8.70
Balance 305,893,006 8.56 8.53 8.51 8.54 8.55
+ Non-income-producing security.
++ The interest rate and date shown parenthetically represent the new
interest rate to be paid and the date the fund will begin receiving
interest at this rate.
++++ Income may be received in cash or additional securities at the
discretion of the issuer.
+++ TBA's are mortgage backed securities traded under delayed delivery
commitments, settling after March 31, 1995. Although the unit price for
the trades has been established, the principal value has not been
finalized. However, the amount of the commitments will not fluctuate more
than 2% from the principal amount. Income on the securities will not be
earned until settlement date. The cost of TBA purchases held at March 31,
1995 was $1,254,750, $227,091 and $1,045,625.
SectionSection Principal Only (P.O.) Strips represent the right to
receive the monthly principal payments on an underlying pool of mortgage
loans. No payments of interest on the pool are passed through to the P.O.
holders.
*** The aggregate indentified cost on a tax basis is as follows:
Aggregate Gross Gross
Identified Unrealized Unrealized Unrealized
Cost Appreciation Depreciation Appreciation
- -------------------------------------------------------------------------
Conservative $94,375,524 $4,094,490 $1,186,768 $2,907,722
Growth 154,909,001 10,868,552 1,991,336 8,877,216
Balanced 295,745,948 17,589,884 2,779,331 14,810,553
- -------------------------------------------------------------------------
ADR or ADS after the name of a holding stands for American Depository
Receipt or American Depository Shares, respectively, representing
ownership of foreign securities on deposit with a domestic custodian
bank.
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.
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
Forward Currency Contracts Outstanding
at March 31, 1995 Conservative
- -------------------------------------------------------------------------
Unrealized
Aggregate Delivery Appreciation
Market Value Face Value Date (Depreciation)
- -------------------------------------------------------------------------
Australian Dollars (Sell)$292,600 $289,300 6/14/95 $(3,300)
Australian Dollars (Sell)182,825 185,550 6/19/95 2,725
Australian Dollars (Sell)274,237 278,168 6/19/95 3,931
Australian Dollars (Sell)219,450 216,615 6/14/95 (2,835)
British Pounds (Buy) 323,880 313,230 5/15/95 10,650
British Pounds (Buy) 161,920 158,200 5/22/95 3,720
British Pounds (Buy) 485,640 474,840 6/14/95 10,800
British Pounds (Sell) 153,824 147,454 5/22/95 (6,370)
British Pounds (Sell) 436,617 425,189 6/14/95 (11,428)
British Pounds (Sell) 1,133,650 1,136,625 5/9/95 2,975
British Pounds (Sell) 647,520 645,000 6/14/95 (2,520)
British Pounds (Sell) 161,950 159,022 5/9/95 (2,928)
Danish Krone (Sell) 275,250 247,717 4/18/95 (27,533)
Danish Krone (Sell) 128,310 126,628 5/22/95 (1,682)
Deutschemarks (Buy) 291,760 285,888 6/16/95 5,872
Deutschemarks (Buy) 458,829 447,594 5/15/95 11,235
Deutschemarks (Buy) 1,531,530 1,530,055 6/14/95 1,475
Deutschemarks (Sell) 363,900 333,333 5/2/95 (30,567)
Deutschemarks (Sell) 524,520 488,351 5/22/95 (36,169)
Deutschemarks (Sell) 510,3704 80,728 6/6/95 (29,642)
Deutschemarks (Sell) 801,1307 82,194 5/15/95 (18,936)
Deutschemarks (Sell) 729,300 711,506 6/14/95 (17,794)
Deutschemarks (Sell) 656,370 653,856 6/14/95 (2,514)
French Francs (Buy) 747,720 722,529 5/15/95 25,191
French Francs (Buy) 872,340 843,471 5/15/95 28,869
French Francs (Buy) 436,380 422,102 5/9/95 14,278
French Francs (Sell) 114,180 102,421 5/22/95 (11,759)
French Francs (Sell) 232,064 217,594 8/22/95 (14,470)
French Francs (Sell) 83,120 80,274 5/9/95 (2,846)
French Francs (Sell) 269,750 261,851 6/8/95 (7,899)
French Francs (Sell) 145,390 140,216 5/16/95 (5,174)
French Francs (Sell) 103,700 102,015 6/21/95 (1,685)
Japanese Yen (Buy) 808,318 712,119 4/10/95 96,199
Japanese Yen (Buy) 1,159,070 1,055,033 5/8/95 104,037
Japanese Yen (Sell) 1,599,372 1,429,280 8/22/95 (170,092)
Japanese Yen (Sell) 695,520 674,135 5/9/95 (21,385)
Netherland Guilders (Sell)91,098 80,469 5/22/95 (10,629)
Netherland Guilders (Sell)143,726 133,192 8/22/95 (10,534)
Swiss Francs (Buy) 354,0403 43,189 5/3/95 10,851
Swiss Francs (Buy) 354,0403 42,180 5/3/95 11,860
Swiss Francs (Sell) 79,785 69,284 5/22/95 (10,501)
Swiss Francs (Sell) 133,950 120,987 8/22/95 (12,963)
- -------------------------------------------------------------------------
($129,487)
- -------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C>
Forward Cross Currency Contracts Outstanding
at March 31, 1995: CONSERVATIVE
- -------------------------------------------------------------------------
In Unrealized
Market Exchange Market Delivery Appreciation
Contracts Value For Value Date(Depreciation)
- -------------------------------------------------------------------------
British Pounds (Buy)$645,600Deutschemarks$651,187 6/14/95 $(5,587)
British Pounds (Buy)483,990Deutschemarks 487,764 6/12/95 (3,774)
British Pounds (Sell)484,170Deutschemarks476,656 6/14/95 (7,514)
Deutschemarks (Buy)731,600Swiss Francs 747,285 6/1/95 (15,685)
Deutschemarks (Buy)656,190Spanish Pesetas630,676 4/28/95 25,514
Deutschemarks (Buy)803,000French Francs 824,580 5/22/95 (21,580)
Deutschemarks (Buy)293,040Italian Lira 301,548 5/22/95 (8,508)
Deutschemarks (Buy)798,930Swiss Francs 804,238 5/3/95 (5,308)
Deutschemarks (Sell)437,220French Francs 438,281 5/3/95 1,061
- -------------------------------------------------------------------------
$(41,381)
- -------------------------------------------------------------------------
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C>
WRITTEN CALL OPTIONS ON FOREIGN CURRENCY
at March 31, 1995 (Premium received $26,880)
- -------------------------------------------------------------------------
EXPIRATION DATE/
CURRENCY STRIKE PRICE VALUE
- -------------------------------------------------------------------------
Dem 1,344,000Deutschemarks in Exchange for U.S. DollarsApril 95/1.4125$42,470
</TABLE>
DIVERSIFICATION OF FOREIGN INVESTMENTS
at March 31, 1995 (as a percentage of net assets):
- -------------------------------------------------------------------------
<TABLE>
<S> <C> <S> <C>
Argentina --% Ireland 0.3%
Australia 1.4 Italy 1.7
Austria 0.2 Japan 4.7
Belgium 0.2 Malaysia 0.3
Canada 0.9 Netherlands 0.9
Denmark 1.6 Scotland 0.1
Finland 0.1 Singapore 0.5
Hong Kong 0.2 Spain 1.3
Norway -- Sweden 0.3
France 1.2 Switzerland 0.6
Germany 3.3 United Kingdom 4.3
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
FORWARD CURRENCY CONTRACTS OUTSTANDING
at March 31, 1995 GROWTH
- -------------------------------------------------------------------------
Unrealized
Aggregate Delivery Appreciation
Market Value Face Value Date (Depreciation)
- -------------------------------------------------------------------------
Australian Dollars (Sell)$146,300 $144,650 6/14/95 $(1,650)
Australian Dollars (Sell)146,260 148,440 6/19/95 2,180
Australian Dollars (Sell)109,695 111,272 6/19/95 1,577
Australian Dollars (Sell)146,300 144,410 6/14/95 (1,890)
British Pounds (Buy) 161,940 156,615 5/15/95 5,325
British Pounds (Buy) 161,920 158,200 5/22/95 3,720
British Pounds (Buy) 161,880 158,280 6/14/95 3,600
British Pounds (Sell) 364,320 349,234 5/22/95 (15,086)
British Pounds (Sell) 986,430 960,613 8/22/95 (25,817)
British Pounds (Sell) 647,800 649,500 5/9/95 1,700
British Pounds (Sell) 485,640 483,750 6/14/95 (1,890)
British Pounds (Sell) 80,975 79,516 5/9/95 (1,459)
Danish Krone (Sell) 293,600 264,079 4/18/95 (29,521)
Danish Krone (Sell) 91,650 90,449 6/14/95 (1,201)
Deutschemarks (Sell) 436,800 394,867 5/8/95 (41,933)
Deutschemarks (Buy) 364,150 355,233 5/15/95 8,917
Deutschemarks (Buy) 1,093,950 1,092,896 6/14/95 1,054
Deutschemarks (Buy) 291,200 277,617 5/8/95 13,583
Deutschemarks (Sell) 160,270 149,218 5/22/95 (11,052)
Deutschemarks (Sell) 109,290 101,626 5/23/95 (7,664)
Deutschemarks (Sell) 218,730 206,026 6/6/95 (12,704)
Deutschemarks (Sell) 436,980 426,652 8/22/95 (10,328)
Deutschemarks (Sell) 437,580 426,903 6/14/95 (10,677)
French Francs (Buy) 436,170 421,475 5/15/95 14,695
French Francs (Buy) 436,170 421,736 5/15/95 14,434
French Francs (Buy) 290,920 281,401 5/9/95 9,519
French Francs (Sell) 271,950 243,948 5/22/95 (28,002)
French Francs (Sell) 625,740 586,727 8/22/95 (39,013)
French Francs (Sell) 166,000 161,139 6/8/95 (4,861)
French Francs (Sell) 83,080 80,123 5/16/95 (2,957)
French Francs (Sell) 62,220 61,209 6/21/95 (1,011)
Japanese Yen (Buy) 461,896 406,925 4/10/95 54,971
Japanese Yen (Buy) 347,721 316,510 5/8/95 31,211
Japanese Yen (Sell) 3,819,960 3,413,928 8/2/95 (406,032)
Japanese Yen (Sell) 347,760 337,067 5/9/95 (10,693)
Netherland Guilders (Sell)214,730 189,677 5/22/95 (25,053)
Netherland Guilders (Sell)372,380 345,089 8/22/95 (27,291)
Swiss Francs (Buy) 177,020 171,594 5/3/95 5,426
Swiss Francs (Buy) 177,020 171,090 5/3/95 5,930
Swiss Francs (Sell) 190,590 165,512 5/22/95 (25,078)
Swiss Francs (Sell) 330,410 298,435 8/22/95 (31,975)
- -------------------------------------------------------------------------
$(596,996)
- -------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C>
Forward Cross Currency Contracts Outstanding
at March 31, 1995: GROWTH
- -------------------------------------------------------------------------
In Unrealized
Market Exchange Market Delivery Appreciation
Contracts Value For Value Date(Depreciation)
- -------------------------------------------------------------------------
British Pounds (Buy)$322,800Deutschemarks$325,743 6/14/95 $(2,943)
British Pounds (Buy)161,330Deutschemarks 162,588 6/12/95 (1,258)
British Pounds (Sell)161,390Deutschemarks158,886 6/14/95 (2,504)
Deutschemarks (Buy)365,800Swiss Francs 373,642 6/1/95 (7,842)
Deutschemarks (Buy)364,550Spanish Pesetas350,376 4/28/95 14,174
Deutschemarks (Buy)511,000French Francs 524,720 5/22/95 (13,720)
Deutschemarks (Buy)73,260 Italian Lira 75,387 5/22/95 (2,127)
Deutschemarks (Buy)508,410Swiss Francs 511,788 5/3/95 (3,378)
Deutschemarks (Sell)291,480French Francs 292,187 5/3/95 707
- -------------------------------------------------------------------------
$(18,891)
- -------------------------------------------------------------------------
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C>
Written Call Options On Foreign Currency
at March 31, 1995 (Premium received $14,840)
- -------------------------------------------------------------------------
EXPIRATION DATE/
CURRENCY STRIKE PRICE VALUE
- -------------------------------------------------------------------------
Dem 742,000Deutschemarks in Exchange for U.S. DollarsApril 95/1.412$23,447
</TABLE>
DIVERSIFICATION OF FOREIGN INVESTMENTS
at March 31, 1995 (as a percentage of net assets):
- -------------------------------------------------------------------------
<TABLE>
<S> <C> <S> <C>
Argentina --% Ireland 0.5%
Australia 0.5 Italy 0.6
Austria 0.4 Japan 4.2
Belgium 0.2 Malaysia 0.4
Canada 0.2 Netherlands 0.7
Denmark 0.5 Scotland --
Finland 0.2 Singapore 0.8
Hong Kong 0.4 Spain 0.7
Norway -- Sweden 0.5
France 1.5 Switzerland 0.9
Germany 1.5 United Kingdom 3.6
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
FORWARD CURRENCY CONTRACTS OUTSTANDING
at March 31, 1995 BALANCED
- -------------------------------------------------------------------------
Unrealized
Aggregate Delivery Appreciation
Market Value Face Value Date (Depreciation)
- -------------------------------------------------------------------------
- -------------
Australian Dollars (Sell)$658,350 $650,925 6/14/95 $(7,425)
Australian Dollars (Sell)475,340 482,430 6/19/95 7,090
Australian Dollars (Sell)530,190 537,791 6/19/95 7,601
Australian Dollars (Sell)438,900 433,230 6/14/95 (5,670)
British Pounds (Buy) 809,700 783,12 65/15/95 26,574
British Pounds (Buy) 323,840 316,400 5/22/95 7,440
British Pounds (Buy) 971,280 949,680 6/14/95 21,600
British Pounds (Sell) 704,350 675,185 5/22/95 (29,165)
British Pounds (Sell) 1,940,520 1,889,730 8/22/95 (50,790)
British Pounds (Sell) 2,267,300 2,273,250 5/9/95 5,950
British Pounds (Sell) 1,618,800 1,612,500 6/14/95 (6,300)
British Pounds (Sell) 566,820 556,577 5/9/95 (10,243)
Danish Krone (Sell) 532,150 478,919 4/18/95 (53,231)
Danish Krone (Sell) 422,050 379,670 4/18/95 (42,380)
Danish Krone (Sell) 384,930 379,884 6/14/95 (5,046)
Deutschemarks (Buy) 729,400 714,720 6/16/95 14,680
Deutschemarks (Buy) 1,238,110 1,207,794 5/15/95 30,316
Deutschemarks (Buy) 3,719,430 3,715,847 6/14/95 3,583
Deutschemarks (Sell) 473,070 433,333 5/2/95 (39,737)
Deutschemarks (Sell) 976,190 908,875 5/22/95 (67,315)
Deutschemarks (Sell) 218,580 203,252 5/23/95 (15,328)
Deutschemarks (Sell) 1,093,650 1,030,131 6/6/95 (63,519)
Deutschemarks (Sell) 1,675,090 1,635,497 5/15/95 (39,593)
Deutschemarks (Sell) 1,604,460 1,565,313 6/14/95 (39,147)
Deutschemarks (Sell) 2,042,040 2,034,218 6/14/95 (7,822)
French Francs (Buy) 1,620,060 1,565,479 5/15/95 54,581
French Francs (Buy) 1,910,840 1,847,603 5/15/95 63,237
French Francs (Buy) 789,640 763,804 5/9/95 25,836
French Francs (Sell) 529,380 474,860 5/22/95 (54,520)
French Francs (Sell) 1,067,080 1,000,544 8/22/95 (66,536)
French Francs (Sell) 166,240 160,547 5/9/95 (5,693)
French Francs (Sell) 622,500 604,272 6/8/95 (18,228)
French Francs (Sell) 311,550 300,463 5/16/95 (11,087)
French Francs (Sell) 186,660 183,627 6/21/95 (3,033)
Japanese Yen (Buy) 1,732,110 1,525,969 4/10/95 206,141
Japanese Yen (Buy) 1,159,070 1,055,033 5/8/95 104,037
Japanese Yen (Sell) 7,349,390 6,568,206 8/22/95 (781,184)
Japanese Yen (Sell) 1,391,040 1,348,269 5/9/95 (42,771)
Netherland Guilders (Sell)419,700 370,732 5/22/95 (48,968)
Netherland Guilders (Sell)699,030 647,798 8/22/95 (51,232)
Swiss Francs (Buy) 885,100 857,971 5/3/95 27,129
Swiss Francs (Buy) 796,590 769,905 5/3/95 26,685
Swiss Francs (Sell) 367,890 319,477 5/22/95 (48,413)
Swiss Francs (Sell) 741,190 669,463 8/22/95 (71,727)
- -------------------------------------------------------------------------
- -------------
$(1,053,623)
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C>
FORWARD CROSS CURRENCY CONTRACTS OUTSTANDING
at March 31, 1995: BALANCED
- -------------------------------------------------------------------------
- -------------
In Unrealized
Market Exchange Market Delivery Appreciation
Contracts Value For Value Date(Depreciation)
- -------------------------------------------------------------------------
- -------------
British Pounds
(Buy) $1,614,000Deutschemarks$1,628,717 6/14/95 $(14,717)
British Pounds
(Buy) 967,980Deutschemarks 975,529 6/12/95 (7,549)
British Pounds
(Sell) 1,291,120Deutschemarks 1,271,084 6/14/95 (20,036)
Deutschemarks (Buy)1,609,520Swiss Francs1,644,026 6/1/95 (34,506)
Deutschemarks (Buy)1,531,110Spanish Pesetas1,471,5784/28/95 59,532
Deutschemarks (Buy)1,606,000French Francs1,649,1215/22/95 (43,121)
Deutschemarks (Buy)586,080Italian Lira 603,097 5/22/95 (17,017)
Deutschemarks (Buy)1,670,490Swiss Francs1,681,589 5/3/95 (11,099)
Deutschemarks (Sell)874,440French Francs 876,562 5/3/95 2,122
- -------------------------------------------------------------------------
- -------------
$(86,391)
- -------------------------------------------------------------------------
- -------------
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C>
Written Call Options On Foreign Currency
at March 31, 1995 (Premium received $57,560)
- -------------------------------------------------------------------------
- -------------
EXPIRATION DATE/
CURRENCY STRIKE PRICE VALUE
- -------------------------------------------------------------------------
- -------------
Dem 2,787,000Deutschemarks in Exchange for U.S. DollarsApril 95/1.412$90,
944
</TABLE>
DIVERSIFICATION OF FOREIGN INVESTMENTS
at March 31, 1995 (as a percentage of net assets):
- -------------------------------------------------------------------------
- -------------
<TABLE>
<S> <C> <S> <C>
Argentina --% Ireland 0.5%
Australia 0.9 Italy 1.2
Austria 0.2 Japan 5.1
Belgium 0.3 Malaysia 0.4
Canada 0.5 Netherlands 1.1
Denmark 0.8 Scotland --
Finland 0.2 Singapore 0.8
Hong Kong 0.3 Spain 0.9
Norway -- Sweden 0.6
France 1.5 Switzerland 0.9
Germany 2.7 United Kingdom 4.3
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABLITIESO
March 31, 1995 (Unaudited)
PUTNAM ASSET ALLOCATION: CONSERVATIVE PORTFOLIO
<TABLE><CAPTION>
<S> <C>
ASSETS
- -------------------------------------------------------------------------
- -------------
Investments in securities, at value (identified cost $94,329,862) (Note
1) $97,283,246
- -------------------------------------------------------------------------
- -------------
Interest, dividends and other receivables 916,248
- -------------------------------------------------------------------------
- -------------
Receivable for securities sold 388,732
- -------------------------------------------------------------------------
- -------------
Receivable for shares of the fund sold 625,913
- -------------------------------------------------------------------------
- -------------
Receivable for open forward currency contracts 371,243
- -------------------------------------------------------------------------
- -------------
Receivable for closed forward currency contracts 154,840
- -------------------------------------------------------------------------
- -------------
Unamortized organization expenses (Note 1) 10,240
- -------------------------------------------------------------------------
- -------------
TOTAL ASSETS $99,750,462
- -------------------------------------------------------------------------
- -------------
LIABILITIES
- -------------------------------------------------------------------------
- -------------
Payable to subcustodian $4,005
- -------------------------------------------------------------------------
- -------------
Payable for securities purchased 4,173,528
- -------------------------------------------------------------------------
- -------------
Payable for shares of the fund repurchased 38,687
- -------------------------------------------------------------------------
- -------------
Payable for administrative services (Note 2) 1,183
- -------------------------------------------------------------------------
- -------------
Payable for compensation of Manager (Note 2) 105,610
- -------------------------------------------------------------------------
- -------------
Payable for compensation of Trustees (Note 2) 610
- -------------------------------------------------------------------------
- -------------
Payable for distributions to shareholders 10,906
- -------------------------------------------------------------------------
- -------------
Payable for investor servicing and custodian fees (Note 2) 69,684
- -------------------------------------------------------------------------
- -------------
Payable for distribution fees (Note 2) 67,921
- -------------------------------------------------------------------------
- -------------
Payable for organization expenses (Note 1) 13,263
- -------------------------------------------------------------------------
- -------------
Payable for open forward currency contracts 542,111
- -------------------------------------------------------------------------
- -------------
Payable for closed forward currency contracts 282,503
- -------------------------------------------------------------------------
- -------------
Written options outstanding end of period (premium received $26,880)42,
470
- -------------------------------------------------------------------------
- -------------
Other accrued expenses 49,787
- -------------------------------------------------------------------------
- -------------
TOTAL LIABILITIES 5,402,268
- -------------------------------------------------------------------------
- -------------
NET ASSETS $94,348,194
- -------------------------------------------------------------------------
- -------------
REPRESENTED BY
- -------------------------------------------------------------------------
- -------------
Paid-in capital (Note 1) $92,455,778
- -------------------------------------------------------------------------
- -------------
Undistributed net investment income (Note 1) 520,458
- -------------------------------------------------------------------------
- -------------
Accumulated net realized loss on investment transactions (Note 1)(1,399
,461)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation of investments, options, forward
currency contracts and foreign currency translation 2,771,419
- -------------------------------------------------------------------------
- -------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO CAPITAL SHARES OUTSTANDING
$94,348,194
- -------------------------------------------------------------------------
- -------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- -------------------------------------------------------------------------
- -------------
Net asset value and redemption price of class A shares
($36,918,905 divided by 4,389,330 shares) $8.41
- -------------------------------------------------------------------------
- -------------
Offering price per share (100/94.25 of $8.41)* $8.92
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class B shares
($52,186,600 divided by 6,220,738 shares)+ $8.39
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class C shares
($3,997,074 divided by 477,683 shares)+ $8.37
- -------------------------------------------------------------------------
- -------------
Net asset value and redemption price of class M shares
($462,000 divided by 55,075 shares) $8.39
- -------------------------------------------------------------------------
- -------------
Offering price per share (100/96.50 of $8.39) $8.69
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class Y shares
($783,615 divided by 93,258 shares)+ $8.40
- -------------------------------------------------------------------------
- -------------
<FN>
* 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.
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
Six months ended March 31, 1995 (Unaudited)
PUTNAM ASSET ALLOCATION: CONVSERVATIVE PORTFOLIO
<TABLE>
<S> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------
- -------------
Interest $1,959,112
- -------------------------------------------------------------------------
- -------------
Dividends (net of foreign tax of $13,035) 280,499
- -------------------------------------------------------------------------
- -------------
Total investment income $2,239,611
- -------------------------------------------------------------------------
- -------------
EXPENSES:
- -------------------------------------------------------------------------
- -------------
Compensation of Manager (Note 2) $278,909
- -------------------------------------------------------------------------
- -------------
Investor servicing and custodian fees (Note 2) 146,850
- -------------------------------------------------------------------------
- -------------
Compensation of Trustees (Note 2) 3,246
- -------------------------------------------------------------------------
- -------------
Auditing 18,306
- -------------------------------------------------------------------------
- -------------
Report to shareholders 29,450
- -------------------------------------------------------------------------
- -------------
Legal 3,489
- -------------------------------------------------------------------------
- -------------
Postage 3,285
- -------------------------------------------------------------------------
- -------------
Amortization of organization expenses (Note 1) 1,323
- -------------------------------------------------------------------------
- -------------
Administrative services (Note 2) 2,396
- -------------------------------------------------------------------------
- -------------
Registration fee 8,712
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class A (Note 2) 39,814
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class B (Note 2) 227,569
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class C (Note 2) 8,251
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class M (Note 2) 435
- -------------------------------------------------------------------------
- -------------
Other expenses 1,570
- -------------------------------------------------------------------------
- -------------
Fees waived by the Manager (Note 2) (132,951)
- -------------------------------------------------------------------------
- -------------
TOTAL EXPENSES 640,654
- -------------------------------------------------------------------------
- -------------
NET INVESTMENT INCOME 1,598,957
- -------------------------------------------------------------------------
- -------------
Net realized loss on investments (Notes 1 and 3) (235,899)
- -------------------------------------------------------------------------
- -------------
Net realized loss on written options (Notes 1 and 3) (42,846)
- -------------------------------------------------------------------------
- -------------
Net realized loss on forward currency contracts and translation
of foreign currency (Notes 1 and 3) (471,241)
- -------------------------------------------------------------------------
- -------------
Net realized loss on futures contracts (Notes 1 and 3) (59,782)
- -------------------------------------------------------------------------
- -------------
Net unrealized depreciation of forward currency contracts and
foreign currency translation during the period (120,605)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation of investments and options during the period
2,763,058
- -------------------------------------------------------------------------
- -------------
NET GAIN ON INVESTMENT TRANSACTIONS 1,832,685
- -------------------------------------------------------------------------
- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,431,642
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
PUTNAM ASSET ALLOCATION: CONSERVATIRE PORTFOLIO
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 7, 1994
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS) TO
MARCH 31 SEPTEMBER 30
------------ ----------------
1995* 1994
- -------------------------------------------------------------------------
- -------------
Increase in net assets
- -------------------------------------------------------------------------
- -------------
Operations:
- -------------------------------------------------------------------------
- -------------
Net investment income $1,598,957 $735,376
- -------------------------------------------------------------------------
- -------------
Net realized loss on investments, futures,
options, forward currency contracts and
currency translation (809,768) (715,262)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation of investments, options,
futures, forward currency contracts, foreign
currency translation and TBA sale commitments2,642,453 128,966
- -------------------------------------------------------------------------
- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 3,431,642 149,080
- -------------------------------------------------------------------------
- -------------
Distributions from net investment income
- -------------------------------------------------------------------------
- -------------
Class A (593,011) (174,402)
- -------------------------------------------------------------------------
- -------------
Class B (678,850) (193,082)
- -------------------------------------------------------------------------
- -------------
Class C (35,755) (141)
- -------------------------------------------------------------------------
- -------------
Class Y (10,106) (981)
- -------------------------------------------------------------------------
- -------------
Class M (2,708) --
- -------------------------------------------------------------------------
- -------------
Increase from capital share transactions (Note 5)27,308,721 65,114,454
- -------------------------------------------------------------------------
- -------------
TOTAL INCREASE IN NET ASSETS 29,419,933 64,894,928
NET ASSETS
- -------------------------------------------------------------------------
- -------------
Beginning of period 64,928,261 33,333
- -------------------------------------------------------------------------
- -------------
END OF PERIOD (including undistributed net
investment income of $520,458 and $241,931,
respectively) $94,348,194 $64,928,261
- -------------------------------------------------------------------------
- -------------
<FN>
* Unaudited.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS*
(For a share outstanding throughout the period)
PUTNAM ASSET ALLOCATION: CONSERVATIVE PORTFOLIO
<TABLE><CAPTION>
<S> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD
SIX JULY 14, 1994FEBRUARY 7, 1995
MONTHS (COMMENCEMENT (COMMENCEMENT
ENDEDOF OPERATIONS) TOOF OPERATIONS)
TO
MARCH 31 SEPTEMBER 30 MARCH 31
- -------------------------------------------------------------------------
- -------------
1995+ 1994 1995+
- -------------------------------------------------------------------------
- -------------
Class Y Class M
- -------------------------------------------------------------------------
- -------------
NET ASSET VALUE, BEGINNING OF PERIOD$8.23 $8.23 $8.21
- -------------------------------------------------------------------------
- -------------
INVESTMENT OPERATIONS
Net investment income(a) .18 .07* .05
Net realized and unrealized gain (loss)
on investments .15 -- .19
- -------------------------------------------------------------------------
- -------------
TOTAL FROM INVESTMENTS OPERATIONS .33 .07 .24
- -------------------------------------------------------------------------
- -------------
LESS DISTRIBUTIONS FROM:
Net investment income (.16) (.07) (.06)
- -------------------------------------------------------------------------
- -------------
NET ASSET VALUE, END OF PERIOD $8.40 $8.23 $8.39
- -------------------------------------------------------------------------
- -------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(b)(c) 4.0 9.80 2.93
- -------------------------------------------------------------------------
- -------------
NET ASSETS, END OF PERIOD (in thousands) $784 $163
$462
- -------------------------------------------------------------------------
- -------------
Ratio of expenses to average
net assets (%)(a)(c) .43 .21 .20
- -------------------------------------------------------------------------
- -------------
Ratio of net investment income to average
net assets (%)(a)(c) 2.44 1.04 .62
- -------------------------------------------------------------------------
- -------------
Portfolio turnover (%)(c) 73.85 59.27 73.85
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE><CAPTION>
<C> <C> <C> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
SIXSEPTEMBER 1, 1994 SIXFEBRUARY 18, 1994 SIX FEBRUARY 7, 1994
MONTHS (COMMENCEMENT MONTHS (COMMENCEMENT MONTHS (COMMENCEMENT
ENDEDOF OPERATIONS) TO ENDEDOF OPERATIONS) TO ENDEDOF OPERATIONS) TO
MARCH 31 SEPTEMBER 30MARCH 31 SEPTEMBER 30MARCH 31 SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
1995+ 1994 1995+ 1994 1995+ 1994
- -------------------------------------------------------------------------
- -------------
CLASS C CLASS B CLASS A
- -------------------------------------------------------------------------
- -------------
$8.22 $8.33 $8.22 $8.50 $8.23 $8.50
.13 .03* .14 .15* .16 .18*
.16 (.10) .15 (.39) .17 (.39)
- -------------------------------------------------------------------------
- -------------
.29 (.07) .29 (.24) .33 (.21)
- -------------------------------------------------------------------------
- -------------
(.14) (.04) (.12) (.04) (.15) (.06)
- -------------------------------------------------------------------------
- -------------
$8.37 $8.22 $8.39 $8.22 $8.41 $8.23
- -------------------------------------------------------------------------
- -------------
3.60 (.80) 3.60 (2.79) 4.09 (2.47)
- -------------------------------------------------------------------------
- -------------
$3,997 $273 $52,187 $38,711 $36,919 $25,782
- -------------------------------------------------------------------------
- -------------
.84 .16 .96 1.21 .58 .75
- -------------------------------------------------------------------------
- -------------
1.9 7.48 1.90 1.92 2.15 2.41
- -------------------------------------------------------------------------
- -------------
73.85 59.27 73.85 59.27 73.85 59.27
- -------------------------------------------------------------------------
- -------------
<FN>
+ Unaudited.
* Per share net investment income for the period ended September 30,
1994, have been determined on the basis of the weighted average
number of shares outstanding during the period.
(a) Reflects a voluntary absorption of expenses incurred by the fund. As
a result of this limitation, expenses for the period ended September
30, 1994, reflect a reduction of $0.05, $0.04, none and $0.01 for
class A, class B, class C and class Y shares, respectively. Expenses
for the period ended March 31, 1995 reflect a reduction of $0.01,
$0.01, $0.01, none and $0.01 for class A, class B, class C, class M
and class Y shares, respectively. See Note 2.
(b) Total Investment Return assumes dividends reinvestment and does not
reflect the effect of sales charges.
(c) Not annualized.
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1995 (Unaudited)
PUTNAM ASSET ALLOCATION: GROWTH PORTFOLIO
<TABLE>
<S> <C>
ASSETS
- -------------------------------------------------------------------------
- -------------
Investments in securities, at value
(identified cost $154,769,842) (Note 1) $163,786,217
- -------------------------------------------------------------------------
- -------------
Cash 166
- -------------------------------------------------------------------------
- -------------
Interest, dividends and other receivables 668,381
- -------------------------------------------------------------------------
- -------------
Receivable for securities sold 1,479,794
- -------------------------------------------------------------------------
- -------------
Receivable for shares of the fund sold 1,744,603
- -------------------------------------------------------------------------
- -------------
Unamortized organization expenses (Note 1) 10,240
- -------------------------------------------------------------------------
- -------------
Receivable for open forward currency contracts 192,723
- -------------------------------------------------------------------------
- -------------
Receivable for closed forward currency contracts 81,234
- -------------------------------------------------------------------------
- -------------
TOTAL ASSETS $167,963,358
- -------------------------------------------------------------------------
- -------------
LIABILITIES
- -------------------------------------------------------------------------
- -------------
Payable for securities purchased $4,736,742
- -------------------------------------------------------------------------
- -------------
Payable for shares of the fund repurchased 257,200
- -------------------------------------------------------------------------
- -------------
Payable for administrative services (Note 2) 1,242
- -------------------------------------------------------------------------
- -------------
Payable for compensation of Manager (Note 2) 250,580
- -------------------------------------------------------------------------
- -------------
Payable for compensation of Trustees (Note 2) 372
- -------------------------------------------------------------------------
- -------------
Payable for investor servicing and custodian fees (Note 2) 124,692
- -------------------------------------------------------------------------
- -------------
Payable for distribution fees (Note 2) 110,333
- -------------------------------------------------------------------------
- -------------
Payable for organization expenses (Note 1) 13,264
- -------------------------------------------------------------------------
- -------------
Payable for open forward currency contracts 808,610
- -------------------------------------------------------------------------
- -------------
Payable for closed forward currency contracts 86,366
- -------------------------------------------------------------------------
- -------------
Payable for written options outstanding (premium received $14,840)23,447
- -------------------------------------------------------------------------
- -------------
Other accrued expenses 71,407
- -------------------------------------------------------------------------
- -------------
TOTAL LIABILITIES 6,484,255
- -------------------------------------------------------------------------
- -------------
NET ASSETS $161,479,103
- -------------------------------------------------------------------------
- -------------
REPRESENTED BY
- -------------------------------------------------------------------------
- -------------
Paid-in capital (Note 1) $154,255,521
- -------------------------------------------------------------------------
- -------------
Undistributed net investment income (Note 1) 607,541
- -------------------------------------------------------------------------
- -------------
Accumulated net realized loss on investment transactions (Note 1)(1,77
9,881)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation on investments, options, futures,
forward currency contracts and foreign currency translation 8,395,922
- -------------------------------------------------------------------------
- -------------
Total -- Representing net assets applicable to capital shares
outstanding $161,479,103
- -------------------------------------------------------------------------
- -------------
Computation of net asset value and offering price
- -------------------------------------------------------------------------
- -------------
Net asset value and redemption price of class A shares
($75,005,431 divided by 8,617,503 shares) $8.70
- -------------------------------------------------------------------------
- -------------
Offering price per share (100/94.25 of $8.70)* $9.23
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class B shares
($78,641,604 divided by 9,085,689 shares)+ $8.66
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class C shares
($4,914,473 divided by 569,443 shares)+ $8.63
- -------------------------------------------------------------------------
- -------------
Net asset value and redemption price of class M shares
($424,778 divided by 48,892 shares) $8.69
- -------------------------------------------------------------------------
- -------------
Offering price per share (100/96.5 of $8.69) $9.01
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class Y shares
($2,492,817 divided by 286,450 shares)+ $8.70
- -------------------------------------------------------------------------
- -------------
<FN>
* 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.
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
Six months ended March 31, 1995 (Unaudited)
PUTNAM ASSET ALLOCATION: GROWTH PORTFOLIO
<TABLE>
<S> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------
- -------------
Interest $1,131,391
- -------------------------------------------------------------------------
- -------------
Dividends (net of foreign tax of $19,072) 1,044,740
- -------------------------------------------------------------------------
- -------------
TOTAL INVESTMENT INCOME $2,176,131
- -------------------------------------------------------------------------
- -------------
EXPENSES:
- -------------------------------------------------------------------------
- -------------
Compensation of Manager (Note 2) $447,875
- -------------------------------------------------------------------------
- -------------
Investor servicing and custodian fees (Note 2) 232,660
- -------------------------------------------------------------------------
- -------------
Compensation of Trustees (Note 2) 2,895
- -------------------------------------------------------------------------
- -------------
Auditing 21,061
- -------------------------------------------------------------------------
- -------------
Reports to shareholders 25,348
- -------------------------------------------------------------------------
- -------------
Legal 5,439
- -------------------------------------------------------------------------
- -------------
Postage 11,377
- -------------------------------------------------------------------------
- -------------
Amortization of organization expenses (Note 1) 1,323
- -------------------------------------------------------------------------
- -------------
Administrative services (Note 2) 2,549
- -------------------------------------------------------------------------
- -------------
Registration fee 24,602
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class A (Note 2) 74,756
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class B (Note 2) 318,421
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class C (Note 2) 11,201
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class M (Note 2) 280
- -------------------------------------------------------------------------
- -------------
Other expenses 3,578
- -------------------------------------------------------------------------
- -------------
Fees waived by the Manager (Note 2) (94,394)
- -------------------------------------------------------------------------
- -------------
TOTAL EXPENSES 1,088,971
- -------------------------------------------------------------------------
- -------------
NET INVESTMENT INCOME 1,087,160
- -------------------------------------------------------------------------
- -------------
Net realized loss on investments (Notes 1 and 3) (634,347)
- -------------------------------------------------------------------------
- -------------
Net realized loss on written options (Notes 1 and 3) (23,673)
- -------------------------------------------------------------------------
- -------------
Net realized loss on futures (Notes 1 and 3) (83,873)
- -------------------------------------------------------------------------
- -------------
Net realized depreciation on forward currency contracts and
translation of foreign currency (Notes 1 and 3) (288,528)
- -------------------------------------------------------------------------
- -------------
Net unrealized loss on forward currency contracts and
foreign currency translation during the period (583,131)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation of investments and options
during the period 6,791,650
- -------------------------------------------------------------------------
- -------------
NET GAIN ON INVESTMENT TRANSACTIONS 5,178,098
- -------------------------------------------------------------------------
- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,265,258
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
PUTNAM ASSET ALLOCATION: GROWTH PORTFOLIO
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 7, 1994
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS) TO
MARCH 31 SEPTEMBER 30
------------ ----------------
1995* 1994
- -------------------------------------------------------------------------
- -------------
INCREASE IN NET ASSETS
- -------------------------------------------------------------------------
- -------------
Operations:
- -------------------------------------------------------------------------
- -------------
Net investment income $1,087,160 $464,501
- -------------------------------------------------------------------------
- -------------
Net realized loss on investments, options,
futures, forward currency contracts and
foreign currency translation (1,030,421) (794,749)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation of investments,
options, futures, forward currency contracts
and foreign currency translation 6,208,519 2,187,403
- -------------------------------------------------------------------------
- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 6,265,258 1,857,155
- -------------------------------------------------------------------------
- -------------
Distributions to shareholders from net investment income:
- -------------------------------------------------------------------------
- -------------
Class A (496,426) --
- -------------------------------------------------------------------------
- -------------
Class B (367,240) --
- -------------------------------------------------------------------------
- -------------
Class C (17,618) --
- -------------------------------------------------------------------------
- -------------
Class Y (16,310) --
- -------------------------------------------------------------------------
- -------------
Increase from capital share
transactions (Note 4) 60,618,415 93,602,535
- -------------------------------------------------------------------------
- -------------
Total increase in net assets 65,986,079 95,459,690
NET ASSETS
- -------------------------------------------------------------------------
- -------------
Beginning of period $95,493,024 33,334
- -------------------------------------------------------------------------
- -------------
END OF PERIOD (including undistributed net
investment income of $607,541 and $417,975,
respectively) $161,479,103 $95,493,024
- -------------------------------------------------------------------------
- -------------
<FN>
* Unaudited.
<PAGE>
FINANCIAL HIGHLIGHTS*
(For a share outstanding throughout the period)
PUTNAM ASSET ALLOCATION: GROWTH PORTFOLIO
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD
SIX JULY 14, 1994FEBRUARY 3, 1995
MONTHS (COMMENCEMENT (COMMENCEMENT
ENDEDOF OPERATIONS) TOOF OPERATIONS)
TO
MARCH 31 SEPTEMBER 30 MARCH 31
- -------------------------------------------------------------------------
- -------------
1995+ 1994 1995+
- -------------------------------------------------------------------------
- -------------
Class Y Class M
- -------------------------------------------------------------------------
- -------------
NET ASSET VALUE, BEGINNING OF PERIOD$8.43 $8.22 $8.39
- -------------------------------------------------------------------------
- -------------
INVESTMENT OPERATIONS
Net investment income(a) .09 .03* .01
Net realized and unrealized
gain (loss) on investments .26 .18 .29
- -------------------------------------------------------------------------
- -------------
TOTAL FROM INVESTMENT OPERATIONS .35 .21 .30
- -------------------------------------------------------------------------
- -------------
LESS DISTRIBUTIONS FROM:
Net investment income (.08) -- --
- -------------------------------------------------------------------------
- -------------
TOTAL DISTRIBUTIONS (.08) -- --
- -------------------------------------------------------------------------
- -------------
NET ASSET VALUE, END OF PERIOD $8.70 $8.43 $8.69
- -------------------------------------------------------------------------
- -------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(b)(c) 4.28 2.55 3.58
- -------------------------------------------------------------------------
- -------------
NET ASSETS, END OF PERIOD (in thousands) $2,493 $775
$425
- -------------------------------------------------------------------------
- -------------
Ratio of expenses to average
net assets (%)(a)(c) .54 .20 .31
- -------------------------------------------------------------------------
- -------------
Ratio of net investment income to
average net assets (%)(a)(c) 1.16 .50 .31
- -------------------------------------------------------------------------
- -------------
Portfolio turnover (%)(c) 37.8 39.9 37.8
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE><CAPTION>
<C> <C> <C> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
SIXSEPTEMBER 1, 1994 SIXFEBRUARY 16, 1994 SIX FEBRUARY 7, 1994
MONTHS (COMMENCEMENT MONTHS (COMMENCEMENT MONTHS (COMMENCEMENT
ENDEDOF OPERATIONS) TO ENDEDOF OPERATIONS) TO ENDEDOF OPERATIONS) TO
MARCH 31 SEPTEMBER 30MARCH 31 SEPTEMBER 30MARCH 31 SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
1995+ 1994 1995+ 1994 1995+ 1994
- -------------------------------------------------------------------------
- -------------
CLASS C CLASS B CLASS A
- -------------------------------------------------------------------------
- -------------
$8.39 $8.46 $8.39 $8.50 $8.43 $8.50
- -------------------------------------------------------------------------
- -------------
.07 .01* .05 .06* .07 .10*
.25 (.08) .27 (.17) .28 (.17)
- -------------------------------------------------------------------------
- -------------
.32 (.07) .32 (.11) .35 (.07)
- -------------------------------------------------------------------------
- -------------
(.08) -- (.05) -- (.08) --
- -------------------------------------------------------------------------
- -------------
(.08) -- (.05) -- (.08) --
- -------------------------------------------------------------------------
- -------------
$8.63 $8.39 $8.66 $8.39 $8.70 $8.43
- -------------------------------------------------------------------------
- -------------
3.82 (.83) 3.86 (1.29) 4.16 (.82)
- -------------------------------------------------------------------------
- -------------
$4,914 $385 $78,642 $50,664 $75,005 $43,669
- -------------------------------------------------------------------------
- -------------
.98 .15 1.03 1.21 .66 .78
- -------------------------------------------------------------------------
- -------------
.76 .14 .67 .80 1.04 1.31
- -------------------------------------------------------------------------
- -------------
37.8 39.9 37.8 39.9 37.8 39.9
- -------------------------------------------------------------------------
- -------------
<FN>
+ Unaudited.
* Per share net investment income for the period ended September 30,
1994, has been determined on the basis of the weighted average
number of shares outstanding during the period.
(a) Reflects an absorption of expenses incurred by the fund. As a result
of this limitation, expenses for the period ended September 30,
1994, reflect a reduction of $0.05, $0.05, $0.01 and $0.01 for class
A, class B, class C and class Y shares, respectively. Expenses for
the period ended March 31, 1995 reflect a reduction of less than
$0.01 per share for class A, class B, class C, class M and class Y
shares, respectively. See Note 2.
(b) Total Investment Return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(c) Not annualized.
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1995 (Unaudited)
PUTNAM ASSET ALLOCATION: BALANCED PORTFOLIO
<TABLE>
<S> <C>
ASSETS
- -------------------------------------------------------------------------
- -------------
Investments in securities, at value (identified cost $295,532,336) (Note
1) $310,556,501
- -------------------------------------------------------------------------
- -------------
Cash 949
- -------------------------------------------------------------------------
- -------------
Interest, dividends and other receivables 1,922,417
- -------------------------------------------------------------------------
- -------------
Receivable for securities sold 2,049,962
- -------------------------------------------------------------------------
- -------------
Receivable for shares of the fund sold 2,679,237
- -------------------------------------------------------------------------
- -------------
Receivable for open forward currency contracts 694,134
- -------------------------------------------------------------------------
- -------------
Receivable for closed forward currency contracts 348,659
- -------------------------------------------------------------------------
- -------------
Unamortized organization expenses (Note 1) 9,898
- -------------------------------------------------------------------------
- -------------
TOTAL ASSETS $318,261,757
LIABILITIES
- -------------------------------------------------------------------------
- -------------
Payable for securities purchased $8,612,075
- -------------------------------------------------------------------------
- -------------
Payable for shares of the fund repurchased 348,649
- -------------------------------------------------------------------------
- -------------
Payable for administrative services (Note 2) 2,098
- -------------------------------------------------------------------------
- -------------
Payable for compensation of Manager (Note 2) 487,484
- -------------------------------------------------------------------------
- -------------
Payable for compensation of Trustees (Note 2) 425
- -------------------------------------------------------------------------
- -------------
Payable for investor servicing and custodian fees (Note 2) 94,773
- -------------------------------------------------------------------------
- -------------
Payable for distribution fees (Note 2) 167,779
- -------------------------------------------------------------------------
- -------------
Payable for open forward currency contracts 1,834,148
- -------------------------------------------------------------------------
- -------------
Payable for closed forward currency contracts 596,153
- -------------------------------------------------------------------------
- -------------
Income dividends payable 42,879
- -------------------------------------------------------------------------
- -------------
Payable for organizational expenses (Note 1) 13,263
- -------------------------------------------------------------------------
- -------------
Payable for written options outstanding (premium received $57,560) 90,944
- -------------------------------------------------------------------------
- -------------
Other accrued expenses 78,081
- -------------------------------------------------------------------------
- -------------
TOTAL LIABILITIES 12,368,751
- -------------------------------------------------------------------------
- -------------
NET ASSETS $305,893,006
- -------------------------------------------------------------------------
- -------------
REPRESENTED BY
- -------------------------------------------------------------------------
- -------------
Paid-in capital (Note 1) $294,108,789
- -------------------------------------------------------------------------
- -------------
Undistributed net investment income (Note 1) 1,106,224
- -------------------------------------------------------------------------
- -------------
Accumulated net realized loss on investment transactions (Note 1)(3,184,1
36)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation on investments, options,
forward currency contracts and foreign currency translation1 3,862,129
- -------------------------------------------------------------------------
- -------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO CAPITAL SHARES OUTSTANDING
$305,893,006
- -------------------------------------------------------------------------
- -------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- -------------------------------------------------------------------------
- -------------
Net asset value and redemption price of class A shares
($113,489,338 divided by 13,256,199 shares) $8.56
- -------------------------------------------------------------------------
- -------------
Offering price per share (100/94.25 of $8.56)* $9.08
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class B shares
($119,094,153 divided by 13,956,406 shares)+ $8.53
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class C shares
($7,372,611 divided by 865,880 shares)+ $8.51
- -------------------------------------------------------------------------
- -------------
Net asset value and redemption price of class M shares
($437,194 divided by 51,222 shares) $8.54
- -------------------------------------------------------------------------
- -------------
Offering price per share (100/96.5 of $8.54) $8.85
- -------------------------------------------------------------------------
- -------------
Net asset value and offering price of class Y shares
($65,499,710 divided by 7,659,646 shares)+ $8.55
- -------------------------------------------------------------------------
- -------------
<FN>
* 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.
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
Six months ended March 31, 1995 (Unaudited)
PUTNAM ASSET ALLOCATION: BALANCED PORTFOLIO
<TABLE>
<S> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------
- -------------
Interest $3,832,940
- -------------------------------------------------------------------------
- -------------
Dividends (net of foreign tax of $35,890) 1,608,186
- -------------------------------------------------------------------------
- -------------
TOTAL INVESTMENT INCOME $5,441,126
- -------------------------------------------------------------------------
- -------------
EXPENSES:
- -------------------------------------------------------------------------
- -------------
Compensation of Manager (Note 2) $886,764
- -------------------------------------------------------------------------
- -------------
Investor servicing and custodian fees (Note 2) 252,029
- -------------------------------------------------------------------------
- -------------
Compensation of Trustees (Note 2) 3,270
- -------------------------------------------------------------------------
- -------------
Auditing 15,971
- -------------------------------------------------------------------------
- -------------
Report to shareholders 15,367
- -------------------------------------------------------------------------
- -------------
Legal 6,398
- -------------------------------------------------------------------------
- -------------
Postage 11,867
- -------------------------------------------------------------------------
- -------------
Amortization of organization expenses (Note 1) 1,323
- -------------------------------------------------------------------------
- -------------
Administrative services (Note 2) 5,090
- -------------------------------------------------------------------------
- -------------
Registration fee 23,315
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class A (Note 2) 107,702
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class B (Note 2) 498,779
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class C (Note 2) 13,848
- -------------------------------------------------------------------------
- -------------
Distribution fees -- class M (Note 2) 324
- -------------------------------------------------------------------------
- -------------
Fees waived by Manager (Note 2) (64,532)
- -------------------------------------------------------------------------
- -------------
TOTAL EXPENSES 1,777,515
- -------------------------------------------------------------------------
- -------------
NET INVESTMENT INCOME 3,663,611
- -------------------------------------------------------------------------
- -------------
Net realized loss on investments (Notes 1 and 3) (699,091)
- -------------------------------------------------------------------------
- -------------
Net realized loss on written options (Notes 1 and 3) (91,911)
- -------------------------------------------------------------------------
- -------------
Net realized loss on futures (Notes 1 and 3) (193,674)
- -------------------------------------------------------------------------
- -------------
Net realized loss on forward currency contracts and
translation of foreign currency (Notes 1 and 3) (1,053,562)
- -------------------------------------------------------------------------
- -------------
Net unrealized depreciation of forward currency contracts and translation
of foreign currency during the period (1,022,424)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation of investments and
options during the period 11,081,088
- -------------------------------------------------------------------------
- -------------
NET GAIN ON INVESTMENT TRANSACTIONS 8,020,426
- -------------------------------------------------------------------------
- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $11,684,037
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
PUTNAM ASSET ALLOCATION: BALANCED PORTFOLIO
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 7, 1994
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS) TO
MARCH 31 SEPTEMBER 30
------------ ----------------
1995* 1994
- -------------------------------------------------------------------------
- -------------
INCREASE IN NET ASSETS
- -------------------------------------------------------------------------
- -------------
Operations:
- -------------------------------------------------------------------------
- -------------
Net investment income $3,663,611 $1,536,209
- -------------------------------------------------------------------------
- -------------
Net realized loss on investments (2,038,238) (1,318,719)
- -------------------------------------------------------------------------
- -------------
Net unrealized appreciation of investments,
options futures, forward currency contracts,
and foreign currency translation and
TBA sale commitments 10,058,664 3,803,465
- -------------------------------------------------------------------------
- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 11,684,037 4,020,955
- -------------------------------------------------------------------------
- -------------
Distributions to shareholders from
net investment income to:
- -------------------------------------------------------------------------
- -------------
Class A (1,112,155) (271,581)
- -------------------------------------------------------------------------
- -------------
Class B (944,792) (258,746)
- -------------------------------------------------------------------------
- -------------
Class C (46,899) (191)
- -------------------------------------------------------------------------
- -------------
Class Y (876,474) (406,388)
- -------------------------------------------------------------------------
- -------------
Class M (1,163) --
- -------------------------------------------------------------------------
- -------------
Increase from capital share transactions (Note 4)95,092,346198,980,724
- -------------------------------------------------------------------------
- -------------
TOTAL INCREASE IN NET ASSETS 103,794,900 202,064,773
NET ASSETS
- -------------------------------------------------------------------------
- -------------
Beginning of year 202,098,106 33,333
- -------------------------------------------------------------------------
- -------------
END OF YEAR (including undistributed net
investment income of $1,106,224 and
$424,096, respectively) $305,893,006 $202,098,106
- -------------------------------------------------------------------------
- -------------
<FN>
* Unaudited.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS*
(For a share outstanding throughout the period)
PUTNAM ASSET ALLOCATION: BALANCED PORTFOLIO
<TABLE><CAPTION>
<S> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD
SIX JULY 5, 1994FEBRUARY 6, 1995
MONTHS (COMMENCEMENT (COMMENCEMENT
ENDEDOF OPERATIONS) TOOF OPERATIONS)
TO
MARCH 31 SEPTEMBER 30 MARCH 31
- -------------------------------------------------------------------------
- -------------
1995+ 1994 1995+
- -------------------------------------------------------------------------
- -------------
Class Y Class M
- -------------------------------------------------------------------------
- -------------
NET ASSET VALUE, BEGINNING OF PERIOD$8.33 $8.11 $8.34
- -------------------------------------------------------------------------
- -------------
INVESTMENT OPERATIONS
Net investment income(a) .15 .05* .04
Net realized and unrealized gain (loss)
on investments .18 .22 .21
- -------------------------------------------------------------------------
- -------------
TOTAL FROM INVESTMENT OPERATIONS .33 .27 .25
- -------------------------------------------------------------------------
- -------------
LESS DISTRIBUTIONS FROM:
Net investment income (.11) (.05) (.05)
- -------------------------------------------------------------------------
- -------------
NET ASSET VALUE, END OF PERIOD $8.55 $8.33 $8.54
- -------------------------------------------------------------------------
- -------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(b)(c) 4.08 3.34 2.95
- -------------------------------------------------------------------------
- -------------
NET ASSETS, END OF PERIOD (in thousands) $65,500 $66,081
$4.37
- -------------------------------------------------------------------------
- -------------
Ratio of expenses to average
net assets (%)(a)(c) .46 .23 .27
- -------------------------------------------------------------------------
- -------------
Ratio of net investment income to average
net assets (%)(a)(c) 1.77 .62 .54
- -------------------------------------------------------------------------
- -------------
Portfolio turnover (%)(c) 42.09 52.62 42.09
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE><CAPTION>
<C> <C> <C> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
SIXSEPTEMBER 1, 1994 SIXFEBRUARY 11, 1994 SIX FEBRUARY 7, 1994
MONTHS (COMMENCEMENT MONTHS (COMMENCEMENT MONTHS (COMMENCEMENT
ENDEDOF OPERATIONS) TO ENDEDOF OPERATIONS) TO ENDEDOF OPERATIONS) TO
MARCH 31 SEPTEMBER 30MARCH 31 SEPTEMBER 30MARCH 31 SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
1995+ 1994 1995+ 1994 1995+ 1994
- -------------------------------------------------------------------------
- -------------
CLASS C CLASS B CLASS A
- -------------------------------------------------------------------------
- -------------
$8.31 $8.41 $8.31 $8.50 $8.33 $8.50
- -------------------------------------------------------------------------
- -------------
.09 .01* .09 .11* .10 .16*
.21 (.08) .21 (.27) .24 (.28)
- -------------------------------------------------------------------------
- -------------
.30 (.07) .30 (.16) .34 (.12)
- -------------------------------------------------------------------------
- -------------
(.10) (.03) (.08) (.03) (.11) (.05)
- -------------------------------------------------------------------------
- -------------
$8.51 $8.31 $8.53 $8.31 $8.56 $8.33
- -------------------------------------------------------------------------
- -------------
3.63 (.84) 3.61 (1.89) 4.08 (1.47)
- -------------------------------------------------------------------------
- -------------
$7,373 $441$119,094 $81,093$113,489 $54,483
- -------------------------------------------------------------------------
- -------------
.86 .16 .96 1.23 .58 0.83
- -------------------------------------------------------------------------
- -------------
1.20 (.11) 1.19 1.41 1.50 2.13
- -------------------------------------------------------------------------
- -------------
42.09 52.62 42.09 52.62 42.09 52.62
- -------------------------------------------------------------------------
- -------------
<FN>
+ Unaudited.
* Per share net investment income for the period ended September 30,
1994, have been determined on the basis of the weighted average
number of shares outstanding during the period.
(a) Reflects an absorption of expenses incurred by the fund. As a result
of this limitation, expenses for the period ended September 30,
1994, reflect a reduction of $0.05, $0.03, $0.01 and none for class
A, class B, class C and class Y shares, respectively. Expenses for
the period March 31, 1995 reflect a reduction of less than $0.01 per
share for class A, class B, class C, class M and class Y shares,
respectively. See Note 2.
(b) Total Investment Return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(c) Not annualized.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1995 (Unaudited)
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
Putnam Asset Allocation Funds (the "trust") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company which consists of a series of investment
portfolios (the "funds"), each of which is represented by a separate
series of shares of beneficial interest. The trust currently offers three
funds: Conservative Portfolio, Growth Portfolio and Balanced Portfolio,
whose objectives are to seek capital appreciation, total return and total
return consistent with preservation of capital, respectively.
Each series of the trust offers class A, class B, class C, class Y and
class M shares. The trust commenced its public offering of class M shares
as follows:
<TABLE><CAPTION>
<S> <C>
Fund Date
- -------------------------------------------------------------------------
- -------------
Conservative Portfolio February 7, 1995
Growth Portfolio February 3, 1995
Balanced Portfolio February 6, 1995
- -------------------------------------------------------------------------
- -------------
</TABLE>
Class A shares are sold with a maximum front-end sales charge of 5.75%.
Class B shares do not pay a front-end sales charge but pay a higher
ongoing distribution fee than class A shares, and may be subject to a
contingent deferred sales charge, if those shares are redeemed within six
years of purchase. Class C shares are subject to the same fees and
expenses as class B shares, except that class C shares have a one-year
1.00% contingent deferred sales charge and do not convert to class A
shares. Class Y shares, which are sold at net asset value, are generally
subject to the same expenses as class A shares and class B shares, but do
not bear a distribution fee. Class Y shares are sold to defined
contribution plans that initially invest at least $250 million in a
combination of Putnam Funds. Class M shares are sold with a maximum front
end sales charge of 3.50%. Class M shares pay a lower front end sales
charge than class A shares but pay higher ongoing distribution fee than
class A shares but lower than class B and class C shares.
Expenses of the trust 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 that fund, if that fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies followed by
the trust 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 last reported bid and asked prices. Securities quoted in
foreign currencies are translated into U.S. dollars at the current
exchange rate. Short-term investments having remaining maturities of 60
days or less are stated at amortized cost which approximates market, and
other investments, including restricted securities, are stated at fair
value following procedures approved by the Trustees. Market quotations
are not considered to be readily available for long-term corporate bonds
and notes; such investments are stated at fair value on the basis of
valuations furnished by a pricing service, approved by the Trustees,
which determines valuations for normal, institutional-size trading units
of such securities using methods based on market transactions for
comparable securities and various relationships between securities that
are generally recognized by institutional traders. (See Sections F, G, H
and I of Note 1 with respect to valuation of TBA sale and purchase
commitments, options and futures contracts and forward currency
contracts.)
B JOINT TRADING ACCOUNT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account, along with the cash of other
registered investment companies managed by Putnam Investment Management,
Inc. (Putnam Management), the fund's Manager, a wholly-owned subsidiary
of Putnam Investments, Inc., and certain other accounts. These balances
may be invested in one or more repurchase agreements and/or short-term
money market instruments.
C REPURCHASE AGREEMENTS The funds, or any joint trading account,
through their 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 funds' 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.
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.
Discount on zero coupon bonds, original issue discount bonds and step-up
bonds is accreted according to the effective yield method.
E FOREIGN CURRENCY TRANSLATION The accounting records of the trust are
maintained in U.S. dollars. The market values of foreign securities,
currency holdings, other assets and liabilities are recorded in the books
and records of the trust after translation to U.S. dollars based on the
exchange rate 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 and 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 fluctuations are included with the net realized and unrealized gain
or loss on investments. Net realized gains and losses on foreign currency
transactions represent net exchange gains or losses on closed forward
currency contracts, disposition of foreign currencies and the difference
between the amount of investment income and foreign withholding taxes
recorded on the fund's books and the U.S. dollar equivalent amounts
actually received or paid.
F TBA PURCHASE COMMITMENTS Each fund may enter into "TBA" (to
beannounced) purchase commitments to purchase securities for a fixed
price at a future date beyond customary settlement time if that fund
holds, and maintains until the settlement date in a segregated account,
cash or high- grade debt obligations in an amount sufficient to meet the
purchase price, or if that fund enters into offsetting contracts for the
forward sale of other securities it owns. TBA purchase commitments may be
considered securities in themselves, and involve a risk of loss if the
value of the security to be purchased declines prior to the settlement
date, which risk is in addition to the risk of decline in the value of
the funds' other assets. Unsettled TBA purchase commitments are valued at
the current market value of the underlying securities, generally
according to the procedures described under "Security valuation" above.
Although the funds will generally enter into TBA purchase commitments
with the intention of acquiring securities for its portfolio or for
delivery pursuant to options contracts it has entered into, a fund may
dispose of a commitment prior to settlement if Putnam Management deems it
appropriate to do so.
TBA SALE COMMITMENTS
Each fund may enter into TBA sale commitments to hedge its portfolio
positions or to sell mortgage-backed securities it owns under delayed
delivery arrangements. Proceeds of TBA sale commitments are not received
until the contractual settlement date. During the time a TBA sale
commitment is outstanding, equivalent deliverable securities, or an
offsetting TBA purchase commitment deliverable on or before the sale
commitment date, are held as "cover" for the transaction.
Unsettled TBA sale commitments are valued at the current market value of
the underlying securities, generally according to the procedures
described under "Security valuation" above. The contract is "marked-to-
market" daily and the change in market value is recorded by a fund as an
unrealized gain or loss. If the TBA sale commitment is closed through the
acquisition of an offsetting purchase commitment, a fund realizes a gain
or loss on the underlying security. If a fund delivers securities under
the commitment, that fund realizes a gain or loss from the sale of the
securities based upon the unit price established at the date the
commitment was entered into.
G OPTION ACCOUNTING PRINCIPLES Each fund may, to the extent consistent
with its investment objective and policies, seek to increase its current
returns by writing covered call and put options on securities it owns or
in which it may invest. When a fund writes a call or put option, an
amount equal to the premium received by that fund is included in that
fund's "Statement of assets and liabilities" as an asset and an
equivalent liability. The amount of the liability is subsequently "marked-
to- market" to reflect the current market value of an option written. The
current market value of an option is the last sale price or, in the
absence of a sale, the last offering price. If an option expires on its
stipulated expiration date, or if a fund enters into a closing purchase
transaction, that fund realizes a gain (or loss if the closing purchase
transaction exceeds the premium received when the option was written)
without regard to any unrealized gain or loss on the underlying security,
and the liability related to such option is extinguished. If a written
call option is exercised, the amount of the premium originally received
reduces the cost of the security that the fund purchases upon exercise of
the option.
The risk in writing a call option is that a fund relinquishes the
opportunity to profit if the market price of the underlying security
increases and theoption is exercised. In writing a put option, a fund
assumes the risk of incurring a loss if the market price of the
underlying security decreases and the option is exercised. In addition,
there is the risk a fund may not be able to enter into a closing
transaction because of an illiquid secondary market.
Each fund may also, to the extent consistent with its investment
objectives and policies, buy put options to protect its portfolio
holdings in an underlying security against a decline in market value. A
fund may buy call options to hedge against an increase in the price of
the securities that that fund ultimately wants to buy. The funds may also
buy and sell combinations of put and call options on the same underlying
security to earn additional income. The premium paid by a fund for the
purchase of a put or call option is included in the fund's "Statement of
assets and liabilities" as an investment and is subsequently "marked-to-
market" to reflect the current market value of the option. If an option a
fund has purchased expires on the stipulated expiration date, that fund
realizes a loss in the amount of the cost of the option. If a fund enters
into a closing sale transaction, that fund realizes a gain or loss,
depending on whether proceeds from the closing sale transaction are
greater or less than the cost of the option. If a fund exercises a call
option, the cost of securities acquired by exercising the call is
increased by the premium paid to buy the call. If a fund exercises a put
option, it realizes a gain or loss from the sale of the underlying
security and the proceeds from such sale are decreased by the premium
originally paid. The risk associated with purchasing options is limited
to the premium originally paid.
OPTIONS ON FOREIGN CURRENCIES Each of the funds, to the extent
consistent with its investment objectives and policies, may write and
purchase put and call options on foreign currencies. The investment
objectives, accounting principles and risks involved are similar to those
described above relating to options on securities. The amount of
potential loss to the funds upon exercise of a written call option is the
value (in U.S. dollars) of the currency sold or received, converted at
the spot price, less the value of U.S. dollars received or paid in
exchange.
I FUTURES A futures contract is an agreement between two parties to buy
and sell a security at a set price on a future date. Upon entering into
such a contract, a fund is required to pledge to the broker an amount of
cash or tax- exempt securities equal to the minimum "initial margin"
requirements of the exchange. Pursuant to the contract, the funds agree
to receive from or pay to the broker the daily fluctuation in value of
the contract. Such receipts or payments are known as variation margin,
and are recorded by the funds as unrealized gains or losses. When the
contract is closed, the funds record 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 potential risk to the funds
is that the change in value of the underlying securities may not
correspond to the change in value of the futures contracts. In addition,
there is a risk that the funds may not be able to close out its futures
positions due to an illiquid secondary market.
J FORWARD CURRENCY CONTRACTS Each 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 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. In addition, the fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their
contracts or if the fund is unable to enter a closing position. The
maximum potential loss from forward currency contracts is the aggregate
face value in U.S. dollars at the time the contract was opened; however,
management believes the likelihood of such a loss to be remote.
K FEDERAL 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.
L 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 wash sales,
capital loss carry over and foreign currency gains and losses.
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.
M EXPENSES OF THE TRUST Expenses directly charged or attributable to
any fund will be paid from the assets of that fund. Generally, expenses
of the trust will be allocated among and charged to the assets of each
fund on a basis that the Trustees deem fair and equitable, which may be
based on the relative assets of each fund or the nature of the services
performed and relative applicability to each fund.
N UNAMORTIZED ORGANIZATION EXPENSES Expenses incurred by the trust in
connection with its organization, its registration with the Securities
and Exchange Commission and with various states, and the initial public
offering of its shares aggregated $39,790 allocated as follow:
<TABLE><CAPTION>
<S> <C>
FUND AMOUNT
- -------------------------------------------------------------------------
- -------------
Conservative Portfolio $13,263
Growth Portfolio 13,264
Balanced Portfolio 13,263
- -------------------------------------------------------------------------
- -------------
</TABLE>
These expenses are being amortized by each fund on a straight-line basis
over a five-year period.
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Management, the trust's Manager, 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:
0.70% of the first $500 million of average net assets of a fund, 0.60% of
the next $500 million, 0.55% of the next $500 million, 0.50% of any
amount over $1.5 billion.
Until December 31, 1994, the Manager agreed to reduce its compensation
and, to the extent necessary, limit expenses of the Growth and Balanced
Portfolios and until September 30, 1995, for the Conservative Portfolio
(exclusive of brokerage, interest, taxes, deferred organizational and
extraordinary expenses, if any, and expenses incurred under the trust's
distribution plans described below) to an annual rate of 1.00% of each
fund's average net assets. This limitation was accomplished by a
reduction of the compensation payable under the management contract to
the Manager and, to the extent necessary, by the Manager's assumption of
additional trust expenses.
The trust also reimburses the Manager for the compensation and related
expenses of certain officers of the trust and their staff who provide
administrative services to the trust. The aggregate amount of all such
reimbursements is approved by the Trustees.
Trustees of the Trust receive an annual Trustee's fee as follows:
<TABLE><CAPTION>
<S> <C>
FUND AMOUNT
- -------------------------------------------------------------------------
- -------------
Conservative Portfolio $530
Growth Portfolio 780
Balanced Portfolio 830
- -------------------------------------------------------------------------
- -------------
</TABLE>
Trustees receive 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 each of the funds' assets are provided by Putnam
Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc.
Investor servicing and custodian fees reported in the Statement of
operations for the period ended March 31, 1995, have been reduced by
credits allowed by PFTC.
Each fund has adopted distribution plans (the "Plans") with respect to
its class A, B, C and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam
Investments Inc., for services provided and expenses incurred by it in
distributing shares of each fund. The Plans provide for payments by the
funds to Putnam Mutual Funds Corp. at an annual rate of up to 0.35%,
1.00%, 1.00% and 1.00% of the average net assets attributable to class A,
class B, class C and class M shares, respectively. The Trustees have
approved payment by each fund at an annual rate of 0.25%, 1.00%, 1.00%
and 0.75% of the average net assets attributable to class A, class B,
class C and class M shares, respectively.
For the period ended March 31, 1995, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $194,292 and $3,308 from the sale
of class A and M shares and $255,817 and $2,010 in contingent deferred
sales charges from redemptions of class B and C shares. A deferred sales
charge of up to 1% is assessed on certain redemptions of class A shares
purchased as part of an investment of $1 million or more. For the period
ended March 31, 1995, Putnam Mutual Funds Corp., acting as underwriter
received $73 on class A redemptions.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the period ended March 31, 1995, aggregate purchases and sales of
investment securities other than short- term investments were as follows:
<TABLE><CAPTION>
<S> <C> <C>
PERIOD ENDED MARCH 31
- -------------------------------------------------------------------------
- -------------
U.S. GOVERNMENT OBLIGATIONS
PURCHASES SALES
- -------------------------------------------------------------------------
- -------------
Conservative Portfolio $33,475,591 $26,856,128
Growth Portfolio 8,379,311 6,372,993
Balanced Portfolio 29,657,140 23,023,806
- -------------------------------------------------------------------------
- -------------
</TABLE>
<TABLE><CAPTION>
<S> <C> <C>
PERIOD ENDED MARCH 31
- -------------------------------------------------------------------------
- -------------
OTHER SECURITIES
- -------------------------------------------------------------------------
- -------------
PURCHASES SALES
- -------------------------------------------------------------------------
- -------------
Conservative Portfolio $45,623,473 $20,473,914
Growth Portfolio 85,766,311 35,639,050
Balanced Portfolio1 56,619,825 80,036,381
- -------------------------------------------------------------------------
- -------------
</TABLE>
In determining the net gain or loss on securities sold, the cost of
securities has been determined on the identified cost basis.
Written option transactions during the period are summarized as follows:
<TABLE><CAPTION>
<S> <C>
CONSERVATIVE PORTFOLIO
- -------------------------------------------------------------------------
- -------------
PREMIUMS RECEIVED
- -------------------------------------------------------------------------
- -------------
Contracts outstanding at the beginning of the year: $ --
Options opened 48,480
Options expired --
Options closed 21,600
- -------------------------------------------------------------------------
- -------------
WRITTEN OPTIONS OUTSTANDING AT THE END OF THE PERIOD $26,880
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO
- -------------------------------------------------------------------------
- -------------
PREMIUMS RECEIVED
- -------------------------------------------------------------------------
- -------------
Contracts outstanding at the beginning of the year: $ --
Options opened 26,534
Options expired --
Options closed 11,694
- -------------------------------------------------------------------------
- -------------
WRITTEN OPTIONS OUTSTANDING AT THE END OF THE PERIOD $14,840
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO
- -------------------------------------------------------------------------
- -------------
PREMIUMS RECEIVED
- -------------------------------------------------------------------------
- -------------
Contracts outstanding at the beginning of the year: $ --
Options opened 102,978
Options expired --
Options closed 45,418
- -------------------------------------------------------------------------
- -------------
WRITTEN OPTIONS OUTSTANDING AT THE END OF THE PERIOD $57,560
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
NOTE 4
CAPITAL SHARES
At March 31, 1995 there was an unlimited number of shares of beneficial
interest authorized, divided into five classes of shares, Class A, Class
B, Class C, Class M and Class Y shares. Transactions in capital shares
were as follows:
<TABLE><CAPTION>
<S> <C> <C>
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS A 1995
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 2,988,579 $24,394,260
Shares purchased in connection with reinvestment
of distributions 63,673 516,646
- -------------------------------------------------------------------------
- -------------
Shares repurchased (1,793,827) (14,606,881)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 1,258,425 $10,304,025
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
FEBRUARY 7, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS A 1994
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 3,273,121 $27,077,525
Shares purchased in connection with reinvestment of
distributions 18,502 152,276
- -------------------------------------------------------------------------
- -------------
Shares repurchased (162,678) (1,344,819)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 3,128,945 $25,884,982
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS B 1995
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 2,165,415 $17,657,046
Shares purchased in connection with reinvestment of
distributions 72,644 587,573
- -------------------------------------------------------------------------
- -------------
Shares repurchased (726,119) (5,931,917)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 1,511,940 $12,312,702
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 18, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS B 1994
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 5,077,331 $41,833,950
Shares purchased in connection with reinvestment of
distributions 19,4801 59,936
- -------------------------------------------------------------------------
- -------------
Shares repurchased (389,973) (3,201,104)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 4,706,838 $38,792,782
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS C 1995
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 458,385 $3,744,745
Shares purchased in connection with reinvestment of
distributions 4,027 32,808
- -------------------------------------------------------------------------
- -------------
Shares repurchased (17,932) (146,342)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 444,480 $3,631,211
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
SEPTEMBER 1, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
Class C 1994
- -------------------------------------------------------------------------
- -------------
Conservative Portfolio Shares Amount
- -------------------------------------------------------------------------
- -------------
Shares sold 33,186 $272,913
Shares purchased in connection with reinvestment of
distributions 17 141
- -------------------------------------------------------------------------
- -------------
Shares repurchased -- --
- -------------------------------------------------------------------------
- -------------
Net increase 33,203 $273,054
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 7, 1995
(COMMENCEMENT OF
OPERATIONS) TO
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS M 1995
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 56,277 465,431
Shares repurchased (1,202) (10,000)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 55,075 $455,431
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS Y 1995
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 76,138 $627,663
Shares purchased in connection with reinvestment of
distributions 1,140 9,274
Shares repurchased (3,821) (31,585)
- -------------------------------------------------------------------------
- -------------
Net increase 73,457 $605,352
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
FEBRUARY 14, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS Y 1994
- -------------------------------------------------------------------------
- -------------
CONSERVATIVE PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 21,200 $175,327
Shares purchased in connection with reinvestment of
distributions 119 981
- -------------------------------------------------------------------------
- -------------
Shares repurchased (1,518) (12,672)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 19,801 $163,636
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS A 1995
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 4,508,020 $37,782,272
Shares purchased in connection with reinvestment of
distributions 59,223 507,085
- -------------------------------------------------------------------------
- -------------
Shares repurchased (1,132,751) (9,503,497)
- -------------------------------------------------------------------------
- -------------
Net increase 3,434,492 $28,785,860
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
FEBRUARY 8, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS A 1994
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 5,390,875 $44,610,117
Shares repurchased (209,824) (1,732,275)
- -------------------------------------------------------------------------
- -------------
Net increase 5,181,051 $42,877,842
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS B 1995
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 3,657,006 $30,522,861
Shares purchased in connection with reinvestment of
distributions 41,820 352,236
- -------------------------------------------------------------------------
- -------------
Shares repurchased (652,634) (5,442,843)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 3,046,192 $25,432,254
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 16, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS B 1994
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 6,391,750 $52,522,856
- -------------------------------------------------------------------------
- -------------
-- --
- -------------------------------------------------------------------------
- -------------
Shares repurchased (354,213) (2,954,048)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 6,037,537 $49,568,808
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS C 1995
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 542,009 $4,515,216
Shares purchased in connection with reinvestment of
distributions 2,359 18,978
- -------------------------------------------------------------------------
- -------------
Shares repurchased (20,830) (176,301)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 523,538 $4,357,893
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
SEPTEMBER 1, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS C 1994
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 45,905 $386,020
- -------------------------------------------------------------------------
- -------------
Shares repurchased -- --
- -------------------------------------------------------------------------
- -------------
Net increase 45,905 $386,020
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 3, 1995
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS M 1995
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 49,120 $418,840
- -------------------------------------------------------------------------
- -------------
Shares repurchased (228) (1,938)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 48,892 $416,902
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS Y 1995
- -------------------------------------------------------------------------
- -------------
GROWTH PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 217,973 $1,825,014
Shares purchased in connection with reinvestment of
distributions 2,0261 6,312
- -------------------------------------------------------------------------
- -------------
Shares repurchased (25,469) (215,820)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 194,530 $1,625,506
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
JULY 14, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS Y 1994
- -------------------------------------------------------------------------
- -------------
Growth Portfolio Shares Amount
- -------------------------------------------------------------------------
- -------------
Shares sold 96,440 $808,146
- -------------------------------------------------------------------------
- -------------
Shares repurchased (4,520) (38,281)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 91,920 $769,865
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS A 1995
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 7,634,071 $63,154,432
Shares purchased in connection with reinvestment of
distributions1 30,355 1,069,835
- -------------------------------------------------------------------------
- -------------
Shares repurchased (1,049,343) (8,702,041)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 6,715,083 $55,522,226
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
FEBRUARY 7, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS A 1994
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 7,003,873 $57,906,621
Shares purchased in connection with reinvestment of
distributions 30,878 256,597
- -------------------------------------------------------------------------
- -------------
Shares repurchased (495,595) (4,114,466)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 6,539,156 $54,048,752
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS B 1995
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 4,967,337 $41,079,323
Shares purchased in connection with reinvestment of
distributions 106,342 866,862
- -------------------------------------------------------------------------
- -------------
Shares repurchased (876,694) (7,260,086)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 4,196,985 $34,686,099
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 11, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS B 1994
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 10,093,884 $82,996,850
Shares purchased in connection with reinvestment of
distributions 28,250 234,196
- -------------------------------------------------------------------------
- -------------
Shares repurchased (364,673) (2,993,135)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 9,757,461 $80,237,911
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS C 1995
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 823,393 $6,822,243
Shares purchased in connection with reinvestment of
distributions 1,810 14,986
- -------------------------------------------------------------------------
- -------------
Shares repurchased (12,421) (103,632)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 812,782 $6,733,597
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
SEPTEMBER1, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS C 1994
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 53,074 $440,831
Shares purchased in connection with reinvestment of
distributions 24 199
- -------------------------------------------------------------------------
- -------------
Shares repurchased -- --
- -------------------------------------------------------------------------
- -------------
Net increase 53,098 $441,030
- -------------------------------------------------------------------------
- -------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
FOR THE PERIOD
FEBRUARY 6, 1995
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS M 1995
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 51,222 $432,133
- -------------------------------------------------------------------------
- -------------
Shares repurchased -- --
- -------------------------------------------------------------------------
- -------------
Net increase 51,222 $432,133
- -------------------------------------------------------------------------
- -------------
SIX MONTHS ENDED
MARCH 31
- -------------------------------------------------------------------------
- -------------
CLASS Y 1995
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 267,319 $2,221,018
Shares purchased in connection with reinvestment of
distributions 107,289 876,483
- -------------------------------------------------------------------------
- -------------
Shares repurchased (648,239) (5,379,210)
- -------------------------------------------------------------------------
- -------------
NET DECREASE (273,631) $(2,281,709)
- -------------------------------------------------------------------------
- -------------
FOR THE PERIOD
JULY 5, 1994
(COMMENCEMENT
OF OPERATIONS) TO
SEPTEMBER 30
- -------------------------------------------------------------------------
- -------------
CLASS Y 1994
- -------------------------------------------------------------------------
- -------------
BALANCED PORTFOLIO SHARES AMOUNT
- -------------------------------------------------------------------------
- -------------
Shares sold 8,070,025 $65,392,334
Shares purchased in connection with reinvestment of
distributions 48,904 406,388
- -------------------------------------------------------------------------
- -------------
Shares repurchased (185,652) (1,545,691)
- -------------------------------------------------------------------------
- -------------
NET INCREASE 7,933,277 $64,253,031
- -------------------------------------------------------------------------
- -------------
<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
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
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President and Fund Manager
Gary N. Coburn
Vice President and Fund Manager
William J. Landes
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
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 Asset
Allocation Funds. 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.
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 PRINCIPAL
AMOUNT INVESTED.
<PAGE>
PUTNAM INVESTMENTS
THE PUTNAM FUNDS
One Post Office Square
Boston, Massachusetts 02109
BULK RATE
U.S. POSTAGE
PAID
PUTNAM
INVESTMENTS
17777
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS.
(1) Rule lines for tables are omitted.
(2) Italic typefaces is displayed in normal type.
(3) Boldface type is displayed in capital letters.
(4) Headers (e.g. the names of the fund) and footers (e.g. page numbers
and OThe accompanying notes are an integral part of these financial
statementsO) are omitted.
(5) Because the printed page breaks are not reflected, certain tabular
and columnar headings and symbols are displayed differently in this
filing.
(6) Bullet points and similar graphic symbols are omitted.
(7) Page numbering is different.
</TABLE>
