Putnam
Global Equity
Fund*
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
8-31-99
*formerly Putnam Diversified Equity Trust
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Putnam Global Equity Fund marked its fifth birthday by changing its name.
The fund, which began its life in July 1994 as Putnam Diversified Equity
Trust, assumed its new name this past July to provide a more accurate
reflection of its investment strategy.
Using a seamless global process driven by painstaking research and a
meticulous valuation approach, the fund's managers focus on investments in
the world's most attractive industries and countries. They make their
individual stock selections on the basis of each company's growth
prospects, returns on capital, and the ability to generate cash flow.
In the report that follows, your fund's managers discuss performance for
the fiscal year ended August 31, 1999, and offer their views on prospects
for fiscal 2000.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
October 20, 1999
Report from the Fund Managers
Paul C. Warren
Justin M. Scott
Michael Stack
Omid Kamshad
Michael K. Arends
Putnam Global Equity Fund, formerly Putnam Diversified Equity Trust, began
fiscal 2000 on a positive note and continued that momentum throughout the
six months ended August 31, 1999. Over the semiannual period, the world's
markets responded not only to regional influences but also to events that
occurred across the globe. The countries, industry sectors, and companies
in which we chose to invest reflected in full your fund's seamless
approach to investing in today's global economy.
Total return for 6 months ended 8/31/99
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- ------------------------------------------------------------------------
13.44% 6.92% 13.06% 8.06% 13.06% 12.06% 13.21% 9.23%
- ------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods begins on page 7.
*INDUSTRY FOCUS DROVE FUND PERFORMANCE
In managing your fund's portfolio, we take a global, three- dimensional
approach, targeting securities that offer both attractive valuations and
growth potential while investing in countries and industries that offer
the best opportunities for stocks to perform well. During the fiscal
year's first half, we believe the industries we emphasized contributed
most to your fund's performance. The technology sector was the portfolio's
best performer and largest industry weighting. We focused heavily on
technology, believing investors' Y2K concerns have been fully discounted
in the markets. In our opinion, most corporations in developed nations
have already addressed the Y2K issue and, therefore, it should not cause
any major disruptions for the companies in which we invest. Moreover,
demand for personal computers remains high throughout the world and that
is leading to strong demand for electronic components, such as
semiconductors and digital equipment. Consolidation in technology's
subsectors, such as media, cable, and telecommunications, is another
reason we believe technology issues, particularly those related to
hardware, are poised to outperform.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Telecommunications 12.1%
Electronics and
electrical equipment 11.2%
Oil and gas 7.9%
Financial services 7.7%
Pharmaceuticals and
biotechnology 5.6%
Footnote reads:
*Based on net assets as of 8/31/99. Holdings will vary over time.
As the period progressed, we increased your fund's exposure to the energy
and basic materials industries. Climbing crude oil prices and the
favorable supply/demand scenario for such basic materials as paper, along
with widespread consolidation, boosted the performance of these sectors.
We decreased your fund's exposure to the pharmaceutical industries. Our
research shows an impending slowdown in growth for many drug companies,
since it appears there are no revolutionary new drugs in the pipeline for
the next few years and the patents for many proprietary drugs are
approaching their expirations. We have trimmed back your fund's financial
weighting in the belief that operating margins of financial companies in
Europe and the United States could come under pressure should interest
rates begin to rise across the globe. The portfolio's exposure to
financial securities in Japan, however, remains high in light of the
current positive environment in the Asia-Pacific region.
* COUNTRY ALLOCATION PROVES REWARDING AS GROWTH OPPORTUNITIES STRENGTHEN IN
SEVERAL REGIONS
Our seamless global investment approach involves searching the world over
for attractive markets with good growth opportunities and attractive
valuations. Over the past six months, our analysis has led us to increase
the portfolio's weighting in certain countries, trim back positions in
others, and hold steady on a few.
Your fund's exposure to U.S. stocks served as its anchor weighting
throughout the period although it represented an underweight allocation
relative to the fund's peer group and industry benchmark. We chose to keep
the portfolio's U.S. market position at roughly 45% primarily because we
believe the U.S. economy has entered a period of rising interest rates
that could fan investors fears of an impending economic slowdown.
Furthermore, we believe U.S. stocks are in the very late stages of a bull
market and many valuations appear somewhat stretched. Having said that,
the fund's U.S. stake contributed substantially to performance as the
corporate earnings environment remained supportive, inflation was kept at
bay, and the economy continued to grow.
Morningstar, Inc., an independent rating agency, gave Putnam Global Equity
Fund's class A shares its highest rating of 5 stars for overall performance
based on the 3- and 5-year periods ended September 30, 1999. Of the 1025
international equity funds rated, the top 10% received 5 stars.*
*Past performance is not indicative of future results. Morningstar ratings
reflect risk-adjusted performance through 9/30/99 and are subject to change
every month. Morningstar ratings are calculated from a fund's 3-year return
(with fee adjustment) in excess of 90-day Treasury bill returns and a risk
factor that reflects performance below 90-day Treasury bill returns. For
3- and 5-year performance, the fund received 5 stars with 1025 and 565 funds
rated, respectively. The top 10% of the funds in an investment category
receive 5 stars. Performance of other share classes will vary.
In Europe, we eliminated positions in Spain and trimmed back your fund's
exposure to the markets of Switzerland, the Netherlands, Finland, and
Italy while maintaining a significant weighting in the United Kingdom and
France (12% and 6.5% of portfolio market value, respectively). The U.K.,
which is not a member of EMU, steadily recovered and seems to have
achieved a "soft landing". We emphasized France because we expect it to be
among the first EMU countries to recover and our research shows many
opportunities exist in the media sector. Both market positions represent
an overweighting relative to the fund's competition.
The Asian markets garnered our increased attention as the period
progressed in large part because of widespread economic recoveries, low
interest rates, and the relatively low value of the region's currencies.
The portfolio's stake in Japan was increased substantially from 4.7% to
13.4% of net assets by period's end. An increased awareness of the
importance of shareholder value, tangible corporate restructuring efforts,
and favorable government spending initiatives helped propel the Japanese
market and your fund's Japanese stocks upward.
New name fully reflects investment strategy
Renaming Putnam Diversified Equity Trust to Putnam Global Equity Fund on
July 30, 1999, was the final act in broadening the fund's former trisector
investment strategy -- a process that began in mid-1998. Today, the fund takes
a seamless approach to global investing, one that focuses on finding stocks
in markets around the world that offer attractive valuations relative to their
growth prospects. We prefer returns to come from a combination of underlying
growth and stock price recovery, rather than depending on either one alone.
In our search for portfolio candidates, we take a three-dimensional,
research-driven top-down, bottom-up approach. That is, we scrutinize investment
possibilities by country, industry, and then company. We first look at the
macro backdrop for country markets and industry sectors to determine whether or
not the outlook is favorable. Once we determine which regions and industries
are worth targeting, we then conduct in-depth company research to assess
financial strength, market leadership, and potential weaknesses. Our approach
is focused, disciplined, and designed to facilitate informed decisions.
We also bolstered the fund's exposure to an overweight position in
emerging Asian markets, particularly Korea, which performed exceedingly
well. Our research indicates a dramatic recovery underway in Korea on the
heels of a restructured economy and corporate arena. Stock valuations are
currently at extremely attractive levels, as well. Over the period, we
also introduced positions in Singapore and through American Depositary
Receipts small positions in Latin America, (Mexico and Brazil) were added.
* STRONG STOCK SELECTION FURTHER ENHANCED RETURNS
The third leg of our investment process involves purchasing the right
stocks and selling those that have either reached our target valuation or
no longer meet our investment criteria. A few highlights over the period
include top-performing Samsung Electronics (South Korea), Fujitsu, Nikko
Securities, and Sakura Bank (Japan), Texas Instruments and Motorola, and
Oracle Software (U.S.). We have sold or trimmed back your fund's positions
- -- and realized profits -- in Liberty Media and TCI Ventures (U.S.) as
well as Axa S.A. (France) and UBS (Switzerland), and Warner Lambert
(U.S.). Shell Transportation & Trading (U.K.) and Jefferson Smurfit
(Ireland) are newly purchased holdings and we have bolstered the fund's
stake in Elf Aquitane (France), which was acquired by fellow French oil
company TotalFina for a premium, following the close of the fund's
reporting period. Indeed, merger and acquisition activity grew at an
astounding pace around the globe with consolidations in the
telecommunications, media, and finance industries not only making
headlines but benefiting your fund as well. Within the past six months
your fund was a shareholder in Telecom Italia, which was won by Olivetti
after a long and often dramatic hostile takeover fight involving German
giant Deutsche Telecom. In this well publicized battle, fund holding
Mannesman of Germany was able to enhance its development of a formidable
fixed and cellular telecom franchise by purchasing Olivetti's fixed and
cellular business at the time of the Telecom Italia acquisition. The
merger between Banque Nationale de Paris (BNP) and Societe Generale was
another performance highlight for the fund.While these holdings, along
with others discussed in this report, were viewed favorably at the end of
the period, all are subject to review in accordance with the fund's
investment strategy and may vary in the future.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Microsoft Corp.
United States
Computer software
Tyco International Ltd.
United States
Conglomerates
Elf Aquitaine S.A.
France
Oil and gas
Citigroup, Inc.
United States
Financial services
Nikko Securities Co., Ltd.
Japan
Financial services
Mannesmann AG
Germany
Machinery
Lucent Technologies, Inc.
United States
Telecommunications
Electronic Data Systems Corp.
United States
Computer services
American Express Co.
United States
Financial services
Sony Corp.
Japan
Electronics and electrical equipment
Footnote reads:
These holdings represent 19.6% of the fund's net assets as of 8/31/99.
Portfolio holdings will vary over time.
* GLOBAL INTEREST-RATE PICTURE THE PRIMARY UNCERTAINTY
The fund enters the second half of fiscal 2000 with a watchful eye on
interest-rate activity around the world. We see economic growth either
gathering steam or remaining strong in various regions which, in turn,
could foster fears of rising inflation. Should inflation become a dominant
concern for the markets, an increase in interest rates could ensue. Bouts
of volatility would then be likely. No matter what the near future brings,
we are confident in the long-term benefits of our investment strategy of
targeting companies with the combination of growth and attractive
valuations. Our strategy is based on our belief that all companies, no
matter what they produce, have an underlying business worth. We assemble a
portfolio of stocks that we believe are selling significantly below that
business worth. We believe this investment approach allows us to cast as
wide a net as possible when seeking opportunities in the global markets
because it can encompass companies from the most rapidly growing
technology firms to century-old industrial manufacturers.
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 8/31/99, there is no guarantee the fund will
continue to hold these securities in the future. International investing
involves certain risks, such as currency fluctuations, economic
instability, and political developments.
Performance summary
This section provides information about your fund's performance, which should
always be considered in light of its investment strategy. Putnam Global Equity
Fund is designed for investors seeking capital appreciation primarily through
a diversified portfolio consisting primarily of domestic and international
stocks.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 8/31/99
Class A Class B Class C Class M
(inception dates) (7/1/94) (7/1/94) (2/1/99) (7/3/95)
NAV POP NAV CDSC NAV CDSC NAV POP
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 months 13.44% 6.92% 13.06% 8.06% 13.06% 12.06% 13.21% 9.23%
- ----------------------------------------------------------------------------------------
1 year 42.06 33.85 41.03 36.03 41.37 40.37 41.51 36.54
- ----------------------------------------------------------------------------------------
5 years 146.82 132.56 139.62 137.62 139.40 139.40 142.78 134.19
Annual average 19.81 18.39 19.10 18.90 19.08 19.08 19.41 18.55
- ----------------------------------------------------------------------------------------
Life of fund 160.46 145.45 152.87 151.87 152.50 152.50 156.18 147.18
Annual average 20.34 18.97 19.65 19.56 19.62 19.62 19.96 19.13
- ----------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 8/31/99
MSCI
Standard & Poor's MSCI EAFE All-Country
500 Index Index World Index
- -----------------------------------------------------------------------
6 months 7.32% 10.40% 10.19%
- -----------------------------------------------------------------------
1 year 39.82 25.67 35.46
- -----------------------------------------------------------------------
5 years 206.52 48.36 97.06
Annual average 25.11 8.21 14.53
- -----------------------------------------------------------------------
Life of fund 229.57 53.33 108.94
Annual average 25.95 8.62 15.32
- -----------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Returns for class A and class M
shares reflect the current maximum initial sales charges of 5.75% and
3.50% respectively. Class B share returns for the 1-, 5-, and life-of-fund
periods reflect the applicable contingent deferred sales charge (CDSC),
which is 5% in the first year, declines to 1% in the sixth year, and is
eliminated thereafter. Returns shown for class M shares for periods prior
to its inception are derived from the historical performance of class A
shares, adjusted to reflect the initial sales charge currently applicable
to the class and the higher operating expenses applicable to such shares.
For class C shares, returns for periods prior to their inception are
derived from the historical performance of class A shares, adjusted to
reflect both the CDSC currently applicable to class C shares, which is 1%
for the first year and is eliminated thereafter, and the higher operating
expenses applicable to class C shares. All returns assume reinvestment of
distributions at NAV. Investment return and principal value will fluctuate
so that an investor's shares when redeemed may be worth more or less than
their original cost.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 8/31/99
Class A Class B Class C Class M
- -------------------------------------------------------------------------------
Distributions (number)* 0 0 0 0
- -------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- -------------------------------------------------------------------------------
2/28/99 $13.62 $14.45 $13.40 $13.63 $13.48 $13.97
- -------------------------------------------------------------------------------
8/31/99 15.45 16.39 15.15 15.41 15.26 15.81
- -------------------------------------------------------------------------------
*There were no distributions during the period.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 9/30/99 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (7/1/94) (7/1/94) (2/1/99) (7/3/95)
NAV POP NAV CDSC NAV CDSC NAV POP
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 months 10.13% 3.78% 9.81% 4.81% 9.79% 8.79% 9.96% 6.11%
- ----------------------------------------------------------------------------------------
1 year 42.94 34.73 41.96 36.96 42.07 41.07 42.42 37.45
- ----------------------------------------------------------------------------------------
5 years 152.83 138.32 145.63 143.63 145.11 145.11 148.57 139.93
Annual average 20.38 18.97 19.69 19.49 19.64 19.64 19.97 19.13
- ----------------------------------------------------------------------------------------
Life of fund 163.84 148.63 156.04 155.04 155.45 155.45 159.37 150.26
Annual average 20.30 18.94 19.61 19.52 19.56 19.56 19.91 19.09
- ----------------------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns may be more or
less than those shown. They do not take into account any adjustment for taxes payable
on reinvested distributions. Investment returns and principal value will fluctuate so
that an investor's shares when sold may be worth more or less than their original cost.
See first page of performance section for performance calculation method.
</TABLE>
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are subject
to a contingent deferred sales charge only if the shares are redeemed
during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the 5.75% maximum sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B or C shares and assumes redemption at the end of
the period. Your fund's class B CDSC declines from a 5% maximum during the
first year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies. The CDSC for class C shares is 1% for one year after
purchase.
Comparative benchmarks
Standard & Poor's 500 Index* is an unmanaged list of common stocks whose
performance assumes reinvestment of all distributions. It is frequently
used as a general measure of stock market performance.
Europe, Australia, and Far East (EAFE)* component of Morgan Stanley
Capital International (MSCI) World Index is an unmanaged list of
approximately 1,045 equity securities originating in 18 countries listed
on the stock exchanges of Europe, Australia, and the Far East, with all
values expressed in U.S. dollars. Performance figures reflect changes in
market prices and reinvestment of distributions net of withholding taxes.
Morgan Stanley Capital International (MSCI) All-Country World Index* is an
unmanaged list of global equity securities, with all values expressed in
U.S. dollars.
*Securities indexes assume reinvestment of all distributions and interest
payments and do not take in account brokerage fees or taxes. Securities in
the fund do not match those in the indexes and performance of the fund
will differ. It is not possible to invest directly in an index.
A guide to the financial statements
These sections of the report constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price is determined. All investment and non-investment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-ended funds, a separate
table is provided for each share class.
<TABLE>
<CAPTION>
The fund's portfolio
August 31, 1999 (Unaudited)
COMMON STOCKS (99.3%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Advertising (1.2%)
- --------------------------------------------------------------------------------------------------------------------------
11,600 Havas Advertising SA (France) $ 2,748,068
811,681 WPP Group PLC (United Kingdom) 7,599,753
--------------
10,347,821
Aerospace and Defense (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
79,890 Aerospatiale Matra (France) (NON) 1,799,672
6,300 Aerospatiale Matra 144A (France) 141,919
128,600 Boeing Co. 5,827,188
416,149 Smiths Industries PLC (United Kingdom) 6,225,543
--------------
13,994,322
Banks (5.4%)
- --------------------------------------------------------------------------------------------------------------------------
38,169 Banque Nationale de Paris (France) 2,922,609
240,009 Barclays PLC (United Kingdom) 7,130,907
836,197 Development Bank of Singapore Ltd. (Singapore) 9,584,631
9,000 Industrial Bank Of Japan (Japan) 91,661
519 Julius Baer Holdings AG (Switzerland) 1,601,407
489,689 National Westminster Bancorp Inc. (United Kingdom) 10,058,574
1,335,000 Sakura Bank, Ltd. (Japan) 7,072,526
24,984 Societe Generale (France) 4,896,196
172,300 Toronto-Dominion Bank (Canada) (NON) 3,375,603
--------------
46,734,114
Broadcasting (4.6%)
- --------------------------------------------------------------------------------------------------------------------------
238,678 AT&T Corp. Liberty Media, Class A(NON) 7,637,696
142,900 CBS Corp. (NON) 6,716,300
117,000 Grupo Televisa S.A.GDR (Mexico) (NON) 4,255,875
146,725 News Corp. Ltd. ADR (Australia) 4,300,877
19,160 Nippon Television Network Corp. (Japan) 10,500,550
26,136 Television Francaise I (France) 6,523,378
--------------
39,934,676
Building and Construction (1.2%)
- --------------------------------------------------------------------------------------------------------------------------
43,546 Acciona S.A. (Spain) 2,246,987
29,761 Bouygues S.A. (France) 8,215,036
--------------
10,462,023
Building Products (1.2%)
- --------------------------------------------------------------------------------------------------------------------------
309,734 CRH PLC (Ireland) (NON) 6,944,583
436,107 Hanson PLC (United Kingdom) (NON) 3,705,052
--------------
10,649,635
Business Services (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
338,600 Cendant Corp. (NON) 6,073,638
Cable Television (1.5%)
- --------------------------------------------------------------------------------------------------------------------------
200,800 MediaOne Group Inc. (NON) 13,202,600
Chemicals (3.9%)
- --------------------------------------------------------------------------------------------------------------------------
230,659 Akzo-Nobel N.V. (Netherlands) (NON) 10,745,775
8,809 Clariant AG (Switzerland) 4,237,167
341,109 Hoechst AG (Germany) (NON) 14,430,275
77,700 Union Carbide Corp. 4,419,188
--------------
33,832,405
Computer Services (1.8%)
- --------------------------------------------------------------------------------------------------------------------------
273,700 Electronic Data Systems Corp. 15,361,413
Computer Software (5.1%)
- --------------------------------------------------------------------------------------------------------------------------
30,601 Adobe Systems, Inc. 3,048,625
158,400 Dell Computer Corp. (NON) 7,731,900
70,000 Fuji Soft AB, Inc. (Japan) 4,859,336
220,949 Microsoft Corp. (NON) 20,451,592
113,700 Oracle Corp. (NON) 4,150,050
40,300 Trans Cosmos Inc. (Japan) 4,104,358
--------------
44,345,861
Computers (2.3%)
- --------------------------------------------------------------------------------------------------------------------------
247,000 Fujitsu Ltd. (Japan) (NON) 7,242,146
97,300 IBM Corp. 12,119,931
--------------
19,362,077
Conglomerates (4.5%)
- --------------------------------------------------------------------------------------------------------------------------
26,200 Corning Inc. 1,742,300
1,186,730 Granada Group PLC (United Kingdom) 10,587,210
71,100 Minnesota Mining & Manufacturing Co. 6,718,950
192,869 Tyco International Ltd. 19,540,041
--------------
38,588,501
Cosmetics (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
425,000 Shiseido Co., Ltd. (Japan) (NON) 5,939,442
Electric Utilities (0.7%)
- --------------------------------------------------------------------------------------------------------------------------
157,400 Companhia Energetica de Minas Gerais ADR (Brazil) 2,400,350
101,400 Korea Electric Power Corp. (South Korea) 3,781,028
--------------
6,181,378
Electronics and Electrical Equipment (11.2%)
- --------------------------------------------------------------------------------------------------------------------------
176,813 Applied Materials, Inc. (NON) 12,564,774
83,500 Hewlett-Packard Co. 8,798,813
25,000 Matsushita Electric Industrial Co. (Japan) 493,241
159,500 Motorola, Inc. 14,713,875
60,600 Philips Electronics N.V. (Netherlands) (NON) 6,252,034
88,400 Rockwell International Corp. 5,226,650
56,400 Samsung Electronics Co. (South Korea) 10,706,471
116,100 Sony Corp. (Japan) 15,037,434
186,000 Taiyo Yuden Co., Ltd. (Japan) 3,992,511
147,000 Tandy Corp. 6,945,750
1,366,000 Toshiba Corp. (Japan) 12,140,283
--------------
96,871,836
Entertainment (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
208,100 Viacom, Inc. Class B (NON) 8,753,206
Financial Services (7.7%)
- --------------------------------------------------------------------------------------------------------------------------
80,624 ABN AMRO Holding N.V. (Netherlands) 1,965,426
110,700 American Express Co. 15,221,250
4,392 Cie Finance Richemont (Switzerland) 8,357,423
376,060 Citigroup, Inc. 16,711,166
40,300 Merrill Lynch & Co., Inc. 3,007,388
1,850,000 Nikko Securities Co. Ltd. (Japan) (NON) 16,019,376
61,400 Promise Co., Ltd. (Japan) 5,103,581
--------------
66,385,610
Food and Beverages (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
451,913 Diageo PLC (United Kingdom) 4,572,365
10,590 Groupe Danone (France) 2,623,036
2,242,328 Tesco PLC (United Kingdom) (NON) 6,635,172
--------------
13,830,573
Insurance (2.6%)
- --------------------------------------------------------------------------------------------------------------------------
126,000 American General Corp. 8,946,000
38,432 Axa S.A. (France) 4,788,061
160,595 Internationale Nederlanden Groep (ING) (Netherlands) 8,814,970
--------------
22,549,031
Investment Companies (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
347,906 Investor AB (Sweden) 4,243,631
Machinery (2.8%)
- --------------------------------------------------------------------------------------------------------------------------
103,880 Mannesmann AG (Germany) (NON) 15,952,178
1,517,309 Siebe PLC (United Kingdom) 7,736,834
--------------
23,689,012
Metals and Mining (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
62,000 Alcoa Inc. 4,002,875
Oil and Gas (8.0%)
- --------------------------------------------------------------------------------------------------------------------------
328,200 Conoco, Inc. 8,779,350
108,890 Elf Aquitaine S.A. (France) 19,116,903
1,507,893 Ente Nazionale Idrocarburi (ENI) SpA (Italy) 9,074,184
116,900 Royal Dutch Petroleum Co. PLC ADR (Netherlands) 7,233,188
130,300 Schlumberger Ltd. 8,697,525
1,144,725 Shell Transportation & Trading (United Kingdom) (NON) 9,118,605
155,200 Unocal Corp. 6,499,000
--------------
68,518,755
Packaging and Containers (0.6%)
- --------------------------------------------------------------------------------------------------------------------------
88,800 Sealed Air Corp. (NON) 5,217,000
Paper (1.7%)
- --------------------------------------------------------------------------------------------------------------------------
2,597,966 Jefferson Smurfit Group PLC (Ireland) 7,384,859
79,200 Weyerhaeuser Co. 4,455,000
79,800 Willamette Industries, Inc. 3,162,075
--------------
15,001,934
Pharmaceuticals and Biotechnology (5.6%)
- --------------------------------------------------------------------------------------------------------------------------
81,514 Amgen Inc. (NON) 6,780,946
2,862 Ares-Serono Group Class B, (Switzerland) 4,330,347
43,100 Bristol-Myers Squibb Co. 3,033,163
129,400 Elan Corp. PLC ADR (Ireland) (NON) 4,148,888
109,400 Merck & Co., Inc. 7,350,313
4,678 Novartis AG ADR (Switzerland) 6,738,051
163,118 Pharmacia & Upjohn, Inc. 8,522,966
43,989 Sanofi-Synthelabo SA (France) (NON) 1,832,997
126,000 Yamanouchi Pharmaceutical Co., Ltd. (Japan) 5,616,369
--------------
48,354,040
Photography (--%)
- --------------------------------------------------------------------------------------------------------------------------
200 Canon, Inc. (Japan) (NON) 5,846
Retail (1.3%)
- --------------------------------------------------------------------------------------------------------------------------
30 Circle K Japan Co. Ltd. (Japan) 1,280
348,982 Coles Myer Ltd. (Australia) (NON) 1,951,679
84,500 Federated Department Stores, Inc. (NON) 3,887,000
109,000 Kojima Co Ltd. (Japan) 5,147,334
--------------
10,987,293
Semiconductors (3.6%)
- --------------------------------------------------------------------------------------------------------------------------
80,300 Ase Test Limited (Taiwan) (NON) 1,846,900
173,200 Intel Corp. 14,234,875
400 Rohm Co. Ltd. (Japan) 79,649
178,000 Texas Instruments, Inc. 14,607,125
--------------
30,768,549
Telecommunications (12.1%)
- --------------------------------------------------------------------------------------------------------------------------
660 BCE, Inc. (Canada) (NON) 30,768
981,167 British Telecommunications PLC (United Kingdom) 15,016,938
1,987,000 China Telecom Ltd. (Hong Kong) (NON) 6,179,947
1,396 DDI Corp. (Japan) 8,798,321
36,504 KDD Corp. (Japan) 2,850,834
47,600 Korea Telecom Corp. (South Korea) (NON) 1,547,000
240,046 Lucent Technologies, Inc. 15,377,948
162,469 Oyj Nokia AB Class A, (Finland) 13,574,350
82,129 Portugal Telecom S.A. (Portugal) 3,438,773
294,000 Sprint Corp. (PCS Group) 13,046,250
231,375 Telfonica de Espana (Spain) (NON) 3,695,003
74,900 Telefonos de Mexico S.A. ADR Class L, (Mexico) 5,570,688
278,200 Telesp Participacoes S.A. ADR (Brazil) 4,538,138
53,226 Vodafone AirTouch PLC (United Kingdom) 10,675,140
--------------
104,340,098
Telecommunications Equipment (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
66,200 Nortel Networks Corp. (Canada) 2,718,338
Transportation (0.5%)
- --------------------------------------------------------------------------------------------------------------------------
258,276 Peninsular and Oriental Steam Navigation Co.
(United Kingdom) 4,232,945
Utilities (1.3%)
- --------------------------------------------------------------------------------------------------------------------------
179,000 Bell Atlantic Corp. 10,963,750
--------------
Total Common Stocks (cost $729,064,480) $ 856,444,228
WARRANTS (0.3%) (a) (NON) (cost $1,181,661) EXPIRATION
NUMBER OF WARRANTS DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------
17,100 Pohang Iron & Steel Company, Ltd. (issued by
Lehman Brothers Finance S.A.) (South Korea) 4/17/00 $ 2,281,995
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $730,246,141) (b) $ 858,726,223
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $862,082,617.
(b) The aggregate identified cost on a tax basis is $731,981,442, resulting in gross unrealized appreciation and
depreciation of $141,385,546 and $14,640,765, respectively, or net unrealized appreciation of $126,744,781.
(NON) Non-income-producing security.
144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional
buyers.
ADR or GDR after the name of a foreign holding stands for American Depositary Receipts or Global Depositary
Receipts, respectively, representing ownership of foreign securities on deposit with a domestic custodian bank.
DIVERSIFICATION BY COUNTRY
Distribution of investments by country of issue at August 31, 1999: (as percentage of Market Value)
Finland 1.6%
France 6.5
Germany 3.5
Ireland 2.2
Italy 1.1
Japan 13.4
Mexico 1.2
Netherlands 4.1
Singapore 1.1
South Korea 2.1
Switzerland 2.9
United Kingdom 12.0
United States 43.6
Other 4.7
-----
Total 100.0%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
August 31, 1999 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $730,246,141) (Note 1) $858,726,223
- -----------------------------------------------------------------------------------------------
Dividends and other receivables 1,636,859
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,999,315
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 22,305,001
- -----------------------------------------------------------------------------------------------
Total assets 884,667,398
Liabilities
- -----------------------------------------------------------------------------------------------
Payable to subcustodian 10,711,089
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 7,817,660
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,686,796
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,390,908
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 234,941
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 21,577
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,813
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 648,628
- -----------------------------------------------------------------------------------------------
Other accrued expenses 71,369
- -----------------------------------------------------------------------------------------------
Total liabilities 22,584,781
- -----------------------------------------------------------------------------------------------
Net assets $862,082,617
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $616,495,076
- -----------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (574,614)
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions (Note 1) 117,699,068
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 128,463,087
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $862,082,617
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($371,176,486 divided by 24,019,152 shares) $15.45
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $15.45)* $16.39
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($447,128,542 divided by 29,508,206 shares)** $15.15
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($6,695,634 divided by 434,595 shares)** $15.41
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($37,081,955 divided by 2,429,861 shares) $15.26
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $15.26)* $15.81
- -----------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales, the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent
deferred sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended August 31, 1999 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $457,537) $6,014,975
- -----------------------------------------------------------------------------------------------
Interest 157,634
- -----------------------------------------------------------------------------------------------
Total investment income 6,172,609
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 2,672,912
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 715,122
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 13,124
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 5,575
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 582,893
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 2,123,923
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 16,161
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 130,061
- -----------------------------------------------------------------------------------------------
Reports to shareholders 27,477
- -----------------------------------------------------------------------------------------------
Registration fees 7,406
- -----------------------------------------------------------------------------------------------
Auditing 29,959
- -----------------------------------------------------------------------------------------------
Legal 4,892
- -----------------------------------------------------------------------------------------------
Postage 62,468
- -----------------------------------------------------------------------------------------------
Other 48,566
- -----------------------------------------------------------------------------------------------
Total expenses 6,440,539
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (52,506)
- -----------------------------------------------------------------------------------------------
Net expenses 6,388,033
- -----------------------------------------------------------------------------------------------
Net investment loss (215,424)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 78,349,127
- -----------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (216,458)
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities in
foreign currencies during the period (Note 1) (461,828)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 17,673,871
- -----------------------------------------------------------------------------------------------
Net gain on investments 95,344,712
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $95,129,288
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
August 31 February 28
1999* 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (215,424) $ (1,365,696)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign
currency transactions 78,132,669 84,241,208
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments and assets and liabilities in foreign currencies 17,212,043 (3,737,132)
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 95,129,288 79,138,380
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (26,234,811)
- ---------------------------------------------------------------------------------------------------------------
Class B -- (33,206,052)
- ---------------------------------------------------------------------------------------------------------------
Class C -- --
- ---------------------------------------------------------------------------------------------------------------
Class M -- (2,470,012)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 57,437,571 62,966,169
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 152,566,859 80,193,674
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 709,515,758 629,322,084
- ---------------------------------------------------------------------------------------------------------------
End of period (including accumulated net investment
losses of $574,614 and $359,190, respectively) $862,082,617 $709,515,758
- ---------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share August 31 Year ended July 1, 1994+
operating performance (Unaudited) Year ended February 28 Feb. 29 to Feb. 28
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.62 $13.18 $11.85 $11.02 $8.83 $8.50
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .02(c) .02(c) .03(c) .06(c) .06 .03(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.81 1.66 3.06 1.77 2.60 .32
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.83 1.68 3.09 1.83 2.66 .35
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income -- -- (.05) (.12) (.08) --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (1.24) (1.66) (.83) (.39) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- (.05) (.05) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- -- -- (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.24) (1.76) (1.00) (.47) (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.45 $13.62 $13.18 $11.85 $11.02 $8.83
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 13.44* 13.08 27.74 16.92 30.58 4.13*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $371,176 $302,556 $270,536 $199,305 $142,513 $93,144
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .62* 1.26 1.37 1.43 1.56 1.12*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) .16* .17 .20 .48 .60 .37*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 113.41* 241.46 97.77 82.07 72.00 46.52*
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended February 29, 1996 and thereafter includes amounts paid
through brokerage service and expense offset arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share August 31 Year ended July 1, 1994+
operating performance (Unaudited) Year ended February 28 Feb. 29 to Feb. 28
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.40 $13.07 $11.77 $10.97 $8.80 $8.50
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.03)(c) (.07)(c) (.06)(c) (.01)(c) .01 --(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.78 1.64 3.05 1.76 2.60 .32
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.75 1.57 2.99 1.75 2.61 .32
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income -- -- (.01) (.09) (.05) --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (1.24) (1.66) (.83) (.39) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- (.02) (.03) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- -- -- (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.24) (1.69) (.95) (.44) (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.15 $13.40 $13.07 $11.77 $10.97 $8.80
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 13.06* 12.33 26.98 16.19 30.05 3.77*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $447,129 $377,386 $333,642 $232,117 $150,679 $75,998
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .95* 1.92 2.00 2.02 2.09 1.45*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.17)* (.49) (.44) (.12) .05 .05*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 113.41* 241.46 97.77 82.07 72.00 46.52*
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended February 29, 1996 and thereafter includes amounts paid
through brokerage service and expense offset arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share August 31 Feb. 1, 1999+
operating performance (Unaudited) to Feb. 28
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $13.63 $14.15
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)(c) (.03) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.81 (.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.78 (.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.41 $13.63
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 13.06* (3.68)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $6,696 $190
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .95* .15*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.17)* (.05)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 113.41* 241.46
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended February 29, 1996 and thereafter includes amounts paid
through brokerage service and expense offset arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share August 31 July 3, 1995+
operating performance (Unaudited) Year ended February 28 to Feb. 29
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $13.48 $13.11 $11.80 $11.01 $9.76
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (c) (.01) (.03) (.03) .01 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.79 1.64 3.07 1.78 1.72
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.78 1.61 3.04 1.79 1.72
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income -- -- (.03) (.12) (.08)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (1.24) (1.66) (.83) (.39)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- (.04) (.05) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
realized gain on investments -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.24) (1.73) (1.00) (.47)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.26 $13.48 $13.11 $11.80 $11.01
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 13.21* 12.61 27.36 16.51 17.95*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $37,082 $29,384 $25,145 $14,791 $3,901
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .82* 1.67 1.75 1.77 1.23*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.05)* (.25) (.22) .05 --*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 113.41* 241.46 97.77 82.07 72.00
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended February 29, 1996 and thereafter includes amounts paid
through brokerage service and expense offset arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
</TABLE>
Notes to financial statements
August 31, 1999 (Unaudited)
Note 1
Significant accounting policies
Putnam Global Equity Fund (formerly known as Diversified Equity Trust)
("the fund") is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The
fund seeks capital appreciation primarily through a diversified portfolio
consisting of domestic growth, domestic value, and international stocks.
The fund offers class A, class B, class C and class M shares. Class A
shares are sold with a maximum front-end sales charge of 5.75%. Class B
shares, which convert to class A shares after approximately eight years,
do not pay a front-end sales charge, but pay a higher ongoing distribution
fee than class A shares, and are subject to a contingent deferred sales
charge, if those shares are redeemed within six years of purchase. Class C
shares are subject to the same fees and expenses as class B shares, except
that class C shares have a one-year 1.00% contingent deferred sales charge
and do not convert to class A shares. Class M shares are sold with a
maximum front-end sales charge of 3.50% and pay an ongoing distribution
fee that is higher than class A shares but lower than class B shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
votes as a class only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by the
Trustees. Shares of each class would receive their pro-rata share of the
net assets of the fund, if the fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price, or, if no sales are reported -- as in the case of
some securities traded over the counter -- the last reported bid price.
Short-term investments having remaining maturities of 60 days or less are
stated at amortized cost, which approximates market value, and other
investments are stated at fair value following procedures approved by the
Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Investment Management, Inc. ("Putnam Management"), the fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the market
value of which at the time of purchase is required to be in an amount at
least equal to the resale price, including accrued interest. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. Putnam Management is responsible for determining that the
value of these underlying securities is at all times at least equal to the
resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis.
Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date except that certain dividends from
foreign securities are recorded as soon as the fund is informed of the
ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The fund
does not isolate that portion of realized or unrealized gains or losses
resulting from changes in the foreign exchange rate on investments from
fluctuations arising from changes in the market prices of the securities.
Such gains and losses are included with the net realized and unrealized
gain or loss on investments. Net realized gains and losses on foreign
currency transactions represent net realized exchange gains or losses on
closed forward currency contracts, disposition of foreign currencies and
the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized appreciation
and depreciation of assets and liabilities in foreign currencies arise
from changes in the value of open forward currency contracts and assets
and liabilities other than investments at the period end, resulting from
changes in the exchange rate.
F) Forward currency contracts The fund may engage in forward currency
contracts, which are agreements between two parties to buy and sell
currencies at a set price on a future date, to protect against a decline
in value relative to the U.S. dollar of the currencies in which its
portfolio securities are denominated or quoted (or an increase in the
value of a currency in which securities a fund intends to buy are
denominated, when a fund holds cash reserves and short-term investments).
The U.S. dollar value of forward currency contracts is determined using
current forward currency exchange rates supplied by a quotation service.
The market value of the contract will fluctuate with changes in currency
exchange rates. The contract is "market to market" daily and the change in
market value is recorded as an unrealized gain or loss. When the contract
is closed, the fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and
the value at the time it was closed. The fund could be exposed to risk if
the value of the currency changes unfavorably, if the counterparties to
the contracts are unable to meet the terms of their contracts or if the
fund is unable to enter into a closing position.
G) Line of credit The fund has entered into a committed line of credit
with certain banks. This line of credit agreement includes restrictions
that the fund maintain an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the six months
ended August 31, 1999, the fund had no borrowings against the line of
credit.
H) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies. It is also the intention of the fund to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the
Internal Revenue Code of 1986, as amended. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held nor for excise tax on income and capital
gains.
I) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid at least annually. The amount and character of income and gains
to be distributed are determined in accordance with income tax
regulations, which may differ from generally accepted accounting
principles. Reclassifications are made to the fund's capital accounts to
reflect income and gains available for distribution (or available capital
loss carryovers) under income tax regulations.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 0.70% of the first $500
million of average net assets, 0.60% of the next $500 million, 0.55% of
the next $500 million, 0.50% of the next $5 billion, 0.475% of the next $5
billion, 0.455% of the next $5 billion, 0.44% of the next $5 billion, and
0.43% thereafter.
As part of the subcustodian contract between the subcustodian bank and
Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments,
the subcustodian bank has a lien on the securities of the fund to the
extent permitted by the fund's investment restrictions to cover any
advances made by the subcustodian bank for the settlement of securities
purchased by the fund. At August 31, 1999, the payable to the subcustodian
bank represents the amount due for cash advance for the settlement of a
security purchased.
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by PFTC. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended August 31, 1999, fund expenses were reduced by
$52,506 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the
Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the
expense-offset arrangements in an income-producing asset if it had not
entered into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $1,060
has been allocated to the fund, and an additional fee for each Trustee's
meeting attended. Trustees who are not interested persons of Putnam
Management and who serve on committees of the Trustees receive additional
fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
in the fund and are invested in certain Putnam funds until distribution in
accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension Plan
are equal to 50% of the Trustee's average total retainer and meeting fees
for the three years preceding retirement. Pension expense for the fund is
included in Compensation of Trustees in the Statement of operations.
Accrued pension liability is included in payable for compensation of
Trustees in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B, class C and class M shares pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the Plans is to
compensate Putnam Mutual Funds Corp., a wholly owned subsidiary of Putnam
Investments Inc., for services provided and expenses incurred by it in
distributing shares of the fund. The Plans provide for payments by the
fund to Putnam Mutual Funds Corp. at an annual rate up to 0.65%, 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 currently limit
payment by the fund to an annual rate of 0.75% of the average net assets
attributable to class M shares. The Trustees currently limit payment by
the fund to an annual rate of 0.50% of the average net assets attributable
to class A for shares outstanding as of July 1, 1995 (except for class A
shares for which Putnam Mutual Funds is dealer of record) and 0.25% of
such average net asset value of shares acquired after that date (including
shares acquired through reinvestment of distributions).
For the six months ended August 31, 1999, Putnam Mutual Funds Corp.,
acting as underwriter, received net commissions of $132,553 and $14,315
from the sale of class A and class M shares, respectively, and received
$215,502 and $117 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. For the six months ended August 31,
1999, Putnam Mutual Funds Corp., acting as underwriter received $2,012 on
class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended August 31, 1999, purchases and sales of
investment securities other than short-term investments aggregated
$965,984,118 and $894,348,589, respectively. There were no purchases and
sales of U.S. government obligations.
Note 4
Capital shares
At August 31, 1999, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended August 31, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 4,900,291 $ 73,355,200
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
4,900,291 73,355,200
Shares
repurchased (3,093,188) (46,125,099)
- -----------------------------------------------------------------------------
Net increase 1,807,103 $ 27,230,101
- -----------------------------------------------------------------------------
Year ended February 28, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 6,334,545 $ 86,668,517
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,863,995 24,474,124
- -----------------------------------------------------------------------------
8,198,540 111,142,641
Shares
repurchased (6,508,215) (87,307,056)
- -----------------------------------------------------------------------------
Net increase 1,690,325 $ 23,835,585
- -----------------------------------------------------------------------------
Six months ended August 31, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 6,211,994 $ 91,676,329
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
6,211,994 91,676,329
Shares
repurchased (4,857,906) (71,442,543)
- -----------------------------------------------------------------------------
Net increase 1,354,088 $ 20,233,786
- -----------------------------------------------------------------------------
Year ended February 28, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 7,834,152 $ 106,056,611
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 2,419,026 31,277,908
- -----------------------------------------------------------------------------
10,253,178 137,334,519
Shares
repurchased (7,619,210) (101,800,083)
- -----------------------------------------------------------------------------
Net increase 2,633,968 $ 35,534,436
- -----------------------------------------------------------------------------
Six months ended August 31, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 447,343 $6,706,374
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
447,343 6,706,374
- -----------------------------------------------------------------------------
Shares
repurchased (26,666) (403,567)
- -----------------------------------------------------------------------------
Net increase 420,677 $6,302,807
- -----------------------------------------------------------------------------
For the period February 1, 1999
(commencement of operations)
to February 28, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 13,918 $191,352
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
13,918 191,352
- -----------------------------------------------------------------------------
Shares
repurchased -- --
- -----------------------------------------------------------------------------
Net increase 13,918 $191,352
- -----------------------------------------------------------------------------
Six months ended August 31, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 481,353 $ 7,090,671
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
481,353 7,090,671
Shares
repurchased (230,920) (3,419,794)
- -----------------------------------------------------------------------------
Net increase 250,433 $ 3,670,877
- -----------------------------------------------------------------------------
Year ended February 28, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 570,399 $ 7,693,217
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 185,652 2,412,397
- -----------------------------------------------------------------------------
756,051 10,105,614
Shares
repurchased (495,014) (6,700,818)
- -----------------------------------------------------------------------------
Net increase 261,037 $ 3,404,796
- -----------------------------------------------------------------------------
The Putnam family of funds
The following is a complete list of Putnam's open-end mutual funds. Please call
your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus for
any Putnam fund. It contains more complete information, including charges and
expenses. Please read it carefully before you invest or send money.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government
Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund *
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund**
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Diversified Income Trust II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply. Contact
Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at www.putnaminv.com.
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Paul C. Warren
Vice President and Fund Manager
Justin M. Scott
Vice President and Fund Manager
Michael Stack
Vice President and Fund Manager
Omid Kamshad
Vice President and Fund Manager
Michael K. Arends
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam Global Equity
Fund. It may also be used as sales literature when preceded or accompanied
by the current prospectus, which gives details of sales charges,
investment objectives, and operating policies of the fund, and the most
recent copy of Putnam's Quarterly Performance Summary. For more
information or to request a prospectus, call toll free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
SA003-55083 522/525/2AF 10/99
