Putnam
Global
Growth and
Income Fund
ANNUAL REPORT
September 30, 1996
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* For the year ended September 30, 1996, the total return at net
asset value of Putnam Global Growth and Income Fund's class A shares
16.25% surpassed the fund's comparative benchmark, the Europe,
Australia and Far East (EAFE) component of the Morgan Stanley
Capital International World Index 8.61%.*
* "The big German conglomerates are talking about maximizing
shareholder value. And it seems like this change is really going to
be something that will take hold in Europe. So we think we're in the
early stages of change akin to the restructuring we saw in U.S.
companies over the last ten years, going on now in Europe."
-- Hugh H. Mullin, Fund Manager
CONTENTS
3 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
19 Financial statements
*MSCI (EAFE) is an unmanaged list of international equity
securities, excluding U.S., with all values expressed in U.S.
dollars. The Europe component of the World Index is an unmanaged
list of 639 companies representing 13 European countries, with
values expressed in U.S. dollars. Past performance is not indicative
of future results. For more performance information, please see page
8.
From the Chairman
Dear Shareholder:
Within the fund's first fiscal year under the name Putnam Global
Growth and Income Fund, a strong stock market and continuing
economic growth provided a remarkably hospitable environment for
positive results. The fund's total return at net asset value for the
12 months ended September 30, 1996, was 16.25%. Although this return
was somewhat less than the market average as measured by the
Standard & Poor's 500(registered trademark) Index, it surpassed the
fund's comparative benchmark, the Europe, Australia and Far East
(EAFE) component of the Morgan Stanley Capital International World
Index. Please see pages 8 and 9 for full performance details.
Average performance during the fund's fiscal year may be attributed
to two factors. First, international stocks lagged domestic stocks
in general and the fund was somewhat negatively affected. Second, in
markets worldwide, and most noticeably in the U.S., value stocks and
value-oriented investments underperformed growth stocks and growth-
oriented investments through much of the year. This combination of
factors was enough to result in lackluster, albeit positive, fund
performance.
As a result of a shareholder meeting held on December 28, 1995, the
fund underwent a name change (it was formerly Putnam Global
Utilities Fund) and a broadening of its strategy. Putnam Management
instituted these changes in order to allow the fund to take greater
advantage of opportunities outside the utilities industry. The fund
continues to be managed in a value investing style, seeking to
provide long-term growth potential with current income as a
secondary objective. Putnam analysts focus on established domestic
and international companies in diverse industry sectors, choosing
those that have undergone positive change. The stocks of these
companies also have attractive dividend yields and sell at low
price-to-earnings ratios -- otherwise known as bargain stocks.
Hugh Mullin manages the fund's domestic investments while Justin
Scott manages the fund's international portion. Throughout the
fiscal period, approximately two-thirds of the portfolio was
invested in stocks of U.S. companies with the remaining one-third
invested in stocks of foreign companies.
*CHEAPNESS AND CHANGE STRATEGY APPLIED GLOBALLY
As in one of Putnam's hallmark open-end funds, The Putnam Fund for
Growth and Income, this fund follows an investment discipline that
focuses on stocks with inexpensive valuations in companies where
senior management is striving to improve earnings over a 2- to 3-
year period.
Putnam Global Growth and Income takes a similar approach, on an
international level. It has been well documented that a similar
situation to what has occurred in corporate America in the past
decade -- restructurings, streamlining, new product development,
improved customer service, and a focus on maximizing shareholder
value -- is now taking place outside the U.S., particularly in
Europe. Putnam management believes this is particularly the case in
Germany where large-capitalization conglomerates with higher cost
structures than the rest of their global competitors have begun to
streamline their organizations and to lower costs. Consequently,
your fund's managers are keeping a watchful eye out for
attractively-valued stocks of companies that are undergoing positive
change as these opportunities surface worldwide.
*CAREFUL SECURITIES SELECTION IN DIVERSE SECTORS PROVED PROFITABLE
In the U.S. portion of the portfolio, fund management achieved
successful results with overweightings in the finance and financial
services sectors where they continued to find companies with very
strong fundamentals and undervalued stocks. The portfolio also had a
fairly large exposure to early cyclical stocks -- those in the
automotive, retail, and consumer products sectors. The fund's
managers purchased technology stocks in the summer months at
depressed prices at the same time as they reduced holdings in the
utilities sector. This proved an excellent move as the sale of some
technology and energy securities brought profits to the portfolio
while utilities, in general, underperformed the market throughout
the fiscal year.
Fund management also chose to underweight holdings in the consumer
nondurables sector -- in certain food, beverage, and health care
companies -- where positive change and quality was evident but where
valuations were fairly lofty.
*SUCCESSFUL HOLDINGS CONTRIBUTE TO POSITIVE RESULTS
Some of the stocks that contributed most to positive fund
performance during the period are as follows. Fund management
purchased stocks of Intel Corp., a large electronics and electrical
equipment corporation, early in the period at $55 per share. They
sold the stock in the final quarter of fiscal '96 in the $80 to $90
range, taking profits and applying them to other opportunities.
Xerox and Avon, portfolio holdings since the fund's inception,
continued to add to fund performance. In the financial services
sector, Bank America was noteworthy. Fund management instituted a
well-timed move into savings and loans this past summer with
Ahmanson & Co. being one example of a stock that increased
significantly in value over a brief 9-month period. In the health-
care arena, Warner-Lambert, Bristol-Myers Squibb, and American Home
Products, with significant positions in the portfolio, proved
rewarding for the fund.
[GRAPHIC OMITTED: horizontal bar chart ALLOCATIONS BY COUNTRY*]
United States 62.4%
Japan 8.9%
United Kingdom 5.8%
Netherlands 4.2%
France 3.5%
Germany 3.4%
Footnote reads:
*Based on net assets as of 9/30/96. Holdings will vary over time.
*OPTIMISTIC OUTLOOK FOR FISCAL '97
Fund management's outlook for the coming months reflects what has
been seen during much of this year: moderate economic growth,
subdued inflation, and stable interest rates that move within a
limited range. They believe corporate profits should continue to
grow at reasonably high levels given this point in the economic
cycle. They are very optimistic about the domestic portion of the
portfolio and see a tremendous amount of positive change beginning
in non-U.S. companies. For this reason, management may somewhat
increase the allocation to the fund's international portion in the
next fiscal year. They anticipate that the sectors and securities
that have served the fund well in recent months will continue to do
so into the beginning of fiscal 1997.
TOP 10 HOLDINGS 9/30/96
International Business Machines Corp.
Multinational computers, software, and information systems
Fleet Financial Group, Inc.
Banking
Societe Nationale Elf Aquitaine (France)
Oil and gas
General Electric Co. PLC (United Kingdom)
Electronics and electrical equipment
J.P. Morgan & Company, Inc.
Multinational banking and finance
Baxter International, Inc.
Medical supplies and devices
Sun Hung Kai Properties Ltd. (Hong Kong)
Real estate
Veba (Vereinigte Elektrizitaets Bergwerks) AG (Germany)
Combined utilities
Hokuriku Electric Power Co. (Japan)
Electric utilities
du Pont (E.I.) de Nemours & Company, Ltd.
Chemicals
Footnote reads:
These holdings represent 10.7% of the fund's net assets as of
9/30/96. Portfolio holdings will vary over time.
Respectfully yours,
/S/George Putnam
George Putnam
Chairman of the Trustees
November 20, 1996
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 9/30/96, there is no guarantee
the fund will continue to hold these securities in the future.
International investing involves certain risks including political
developments, economic uncertainty, and currency fluctuations.
Performance summary
Performance should always be considered in light of a fund's
investment strategy. Putnam Global Growth and Income Fund is
designed for investors seeking capital appreciation with current
income as a secondary objective through investments in common stocks
and will invest a significant portion of its assets in countries
outside the United States.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 9/30/96
Standard & MSCI
Poor's 500 EAFE
NAV POP Index Index
- --------------------------------------------------------------------
1 year 16.25% 9.55% 20.26% 8.61%
- --------------------------------------------------------------------
Life of fund
(since 1/3/95) 31.84 24.24 55.94 16.09
Annual average 17.22 13.29 29.09 8.90
- --------------------------------------------------------------------
Fund performance data do not take into account any adjustment for
taxes payable on reinvested distributions. Performance data
represent past results. Investment returns and net asset value will
fluctuate so an investor's shares, when sold, may be worth more or
less than their original cost. POP assumes maximum 5.75% sales
charge. Performance data represent past results and an expense
limitation currently in effect. Performance data prior to 12/28/95
do not reflect operation and the fund's current investment
objectives and policies. Without the expense limitation, the fund's
total return would have been lower. Investment returns and net asset
value will fluctuate so that an investor's shares, when sold, may be
worth more or less than their original cost. The short-term results
of a relatively new fund are not necessarily indicative of its long-
term prospects.
[GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
Cumulative total return of a $10,000 investment since 1/3/95
Starting value (Insert ending Total)
$9,425 Fund's shares at POP $12,424
$10,000 S&P 500 $15,594
$10,000 MSCI EAFE Index $11,609
(plot points for 10-year total return mountain chart)
Date/year Fund at POP S&P 500 MSCI EAFE Index
- --------- ----------- ------- ------------------
1/31/95 9,058 10,243 9,818
2/28/95 9,235 10,612 9,588
3/31/95 9,368 10,917 10,186
4/30/95 9,756 11,277 10,569
5/31/95 10,166 11,687 10,443
6/30/95 10,333 12,014 10,280
7/31/95 10,654 12,396 10,899
8/31/95 10,499 12,392 10,483
9/30/95 10,687 12,966 10,688
10/31/95 10,698 12,902 10,401
11/30/95 10,887 13,431 10,690
12/31/95 11,180 14,193 11,121
1/31/96 11,375 14,291 11,166
2/29/96 11,502 14,481 11,204
3/31/96 11,756 14,676 11,442
4/30/96 11,963 15,011 11,775
5/31/96 12,136 15,130 11,558
6/30/96 12,136 14,438 11,623
7/31/96 11,710 14,709 11,283
8/31/96 11,940 15,594 11,609
9/30/96 12,424 15,594 11,609
Footnote reads:
Past performance is no assurance of future results.
TERMS AND DEFINITIONS
Net asset value (NAV) is the value of all your fund's assets, minus
any liabilities, divided by the number of outstanding shares, not
including any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus
the maximum sales charge levied at the time of purchase. POP
performance figures shown here assume the maximum 5.75% sales
charge.
COMPARATIVE BENCHMARKS
The Europe, Australia and the Far East (EAFE) component of the
Morgan Stanley Capital International World Index is an unmanaged
list of international equity securities, excluding U.S., with all
values expressed in U.S. dollars. The Europe component of the World
Index is an unmanaged list of 639 companies representing 13 European
countries, with values expressed in U.S. dollars.
Standard & Poor's 500 Index is an unmanaged list of common stocks
that is frequently used as a general measure of stock market
performance.
Footnote reads:
Both indexes assume reinvestment of all distributions and do not
take into account brokerage commissions or other costs. The fund's
portfolio contains securities that differ from those in the indexes.
You cannot invest in an index.
Report of independent accountants
For the fiscal year ended September 30, 1996
To the Trustees and Shareholders of
Putnam Global Growth & Income Fund
We have audited the accompanying statement of assets and liabilities
of Putnam Global Growth and Income Fund, formerly Putnam Global
Utilities Fund, including the portfolio of investments owned, as of
September 30, 1996, and the related statement of operations for the
year then ended, the statements of changes in net assets for the
year then ended and for the period January 3, 1995 (commencement of
operations) to September 30, 1995, and the financial highlights for
each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of
September 30, 1996, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Putnam Global Growth and Income Fund, formerly
Putnam Global Utilities Fund, as of September 30, 1996, the results
of its operations for the year then ended, the changes in its net
assets for the year then ended and for the period January 3, 1995
(commencement of operations) to September 30, 1995, and the
financial highlights for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
November 11, 1996
<TABLE>
<CAPTION>
Portfolio of investments owned
September 30, 1996
<S> <C> <C>
COMMON STOCKS (97.2%) *
NUMBER OF SHARES VALUE
Aerospace and Defense (0.7%)
- -----------------------------------------------------------------------------------------
150 Lockheed Martin Corp. 13,519
Airlines (1.3%)
- -----------------------------------------------------------------------------------------
130 Delta Air Lines, Inc. 9,360
270 K.L.M.-Royal Dutch Airlines (Netherlands) 7,232
1,000 Singapore Airlines Ltd. (Singapore) 10,089
---------
26,681
Alcoholic Beverages (0.6%)
- -----------------------------------------------------------------------------------------
330 Anheuser-Busch Cos., Inc. 12,416
Appliances (0.9%)
- -----------------------------------------------------------------------------------------
150 Electrolux AB (Sweden) 8,442
200 Whirlpool Corporation 10,125
---------
18,567
Automotive (3.5%)
- -----------------------------------------------------------------------------------------
350 Chrysler Corp. 10,019
305 Ford Motor Co. 9,531
375 General Motors Corp. 18,000
3,000 Jardine International Motor Holdings Ltd. (Hong Kong) 3,802
1,000 Mitsubishi Motors Corp. (Japan) 8,454
50 Peugeot Citroen S A (France) 5,514
185 TRW, Inc. 17,205
---------
72,525
Banks (10.6%)
- -----------------------------------------------------------------------------------------
1,900 Allied Irish Banks PLC (Ireland) 11,110
10 Baer Holdings AG (Switzerland) 10,419
360 Banc One Corp. 14,760
921 Bank of Ireland (Ireland) 7,258
150 BankAmerica Corp. 12,319
250 Bankers Trust New York Corp. 19,656
1,000 Barclays Bank PLC (United Kingdom) 14,700
160 Comerica, Inc. 8,240
325 CoreStates Financial Corp. 14,056
540 Fleet Financial Group, Inc. 24,030
315 Great Western Financial Corp. 8,348
900 HSBC Holdings PLC (United Kingdom) 17,272
305 National City Corp. 12,848
140 NationsBank Corp. 12,163
1,000 Overseas Union Bank Ltd. (Singapore) 6,998
490 PNC Bank Corp. 16,354
2,000 Westpac Banking Corp. (Australia) 10,345
---------
220,876
Basic Industrial Products (0.9%)
- -----------------------------------------------------------------------------------------
205 General Signal Corp. 9,020
1,000 Mitsui Fudoscan Co. (Japan) 8,705
---------
17,725
Building Products (2.4%)
- -----------------------------------------------------------------------------------------
150 Armstrong World Industries, Inc. 9,356
1,000 CRH PLC (Ireland) 10,141
200 Lafarge Coppee (France) 11,802
1,000 Marui Co., Ltd. (Japan) 19,315
---------
50,614
Building and Construction (0.8%)
- -----------------------------------------------------------------------------------------
2,000 Obayashi Corp. (Japan) 16,423
Business Services (0.9%)
- -----------------------------------------------------------------------------------------
1,000 Dai Nippon Printing Co., Ltd. (Japan) 18,687
Chemicals (5.0%)
- -----------------------------------------------------------------------------------------
50 Akzo-Nobel N.V. (Netherlands) 6,065
500 Bayer AG ADR (Germany) 18,361
155 Dow Chemical Co. 12,439
230 du Pont (E.I.) de Nemours & Co., Ltd. 20,298
175 Eastman Chemical Co. 10,216
350 Hoechst AG (Germany) 12,779
1,000 KAO Corp. (Japan) 12,488
330 Witco Chemical Corp. 10,849
---------
103,495
Combined Utilities (1.0%)
- -----------------------------------------------------------------------------------------
400 Veba (Vereinigte Elektrizitaets Bergwerks) AG (Germany) 20,957
Computers (1.2%)
- -----------------------------------------------------------------------------------------
200 IBM Corp. 24,900
Conglomerates (2.5%)
- -----------------------------------------------------------------------------------------
20 Degussa AG (Germany) 7,291
360 ITT Industries, Inc. 8,685
205 Minnesota Mining & Manufacturing Co. 14,324
40 Preussag AG (Germany) 9,980
105 United Technologies Corp. 12,613
---------
52,893
Consumer Products (1.8%)
- -----------------------------------------------------------------------------------------
230 Kimberly-Clark Corp. 20,269
100 Unilever N.V. (Netherlands) 15,797
---------
36,066
Containers (0.8%)
- -----------------------------------------------------------------------------------------
255 Chesapeake Corp. 7,013
190 Temple Inland, Inc. 10,023
---------
17,036
Cosmetics (0.6%)
- -----------------------------------------------------------------------------------------
250 Avon Products, Inc. 12,406
Electric Utilities (4.1%)
- -----------------------------------------------------------------------------------------
250 Cinergy Corp. 7,719
395 Edison International 7,061
1,000 Hokuriku Electric Power Co. (Japan) 20,933
3,500 Hong Kong Electric Holdings Ltd. (Hong Kong) 11,315
370 Northeast Utilities Co. 4,579
210 Potomac Electric Power Co. 5,329
175 Public Service Co. of Colorado 6,213
275 Public Service Enterprise Group, Inc. 7,356
1,700 Scottish Power PLC (United Kingdom) 8,130
190 Union Electric Co. 7,006
---------
85,641
Electronics and Electrical Equipment (4.4%)
- -----------------------------------------------------------------------------------------
5 BBC Brown Boveri & Cie AG (Switzerland) 6,114
205 Eaton Corp. 12,377
100 Emerson Electric Co. 9,013
3,700 General Electric Co. PLC (United Kingdom) 22,909
100 General Electric Co. 9,100
1,000 Hitachi, Ltd. (Japan) 9,703
140 Philips Electronics N.V. (Netherlands) 5,060
1,000 Sharp Corp. (Japan) 16,620
---------
90,896
Energy-Related (0.3%)
- -----------------------------------------------------------------------------------------
50 VA Technolgies AG (Austria) 6,527
Environmental Control (0.6%)
- -----------------------------------------------------------------------------------------
375 WMX Technologies, Inc. 12,328
Farm Equipment (0.5%)
- -----------------------------------------------------------------------------------------
260 Deere (John) & Co. 10,920
Finance (3.9%)
- -----------------------------------------------------------------------------------------
300 ABN AMRO Holding N.V. (Netherlands) 16,651
245 Beneficial Corp. 14,088
50 Credit Locale de France S.A. (France) 4,264
265 Federal National Mortgage Association 9,242
320 Keycorp 14,080
255 Morgan (J.P.) & Co., Inc. 22,663
---------
80,988
Financial Services (0.5%)
- -----------------------------------------------------------------------------------------
255 Norwest Corp. 10,423
Food (1.4%)
- -----------------------------------------------------------------------------------------
200 General Mills, Inc. 12,075
5,600 Goodman Fielder Ltd. ADR (Australia) 5,713
330 Heinz (H.J.) Co. 11,138
---------
28,926
Food and Beverages (2.9%)
- -----------------------------------------------------------------------------------------
1,500 Argyll Group PLC (United Kingdom) 7,714
1,800 Guinness PLC (United Kingdom) 12,892
15 Nestle S.A. (Switzerland) 16,717
355 Sara Lee Corp. 12,691
405 Whitman Corporation 9,366
---------
59,380
Gas Pipelines (0.4%)
- -----------------------------------------------------------------------------------------
210 Enron Corp. 8,558
Household Products (0.8%)
- -----------------------------------------------------------------------------------------
100 Clorox Co. 9,588
900 Tate & Lyle PLC (United Kingdom) 6,587
---------
16,175
Insurance (5.2%)
- -----------------------------------------------------------------------------------------
100 Aegon N.V. (Netherlands) 4,942
305 American General Corp. 11,514
255 AON Corp. 13,834
90 CIGNA Corp. 10,789
304 Internationale Nederlanden Groep (Netherlands) 9,494
1,200 Jardine Matheson Holdings Ltd. (Singapore) 7,500
135 Lincoln National Corp. 5,923
1,250 QBE Insurance Group Ltd. (Australia) 6,723
10 Swiss Reinsurance Co. (Switzerland) 10,539
1,000 Tokio Marine & Fire Insurance Co. Ltd. (The) (Japan) 11,859
800 USF&G Corp. 14,800
---------
107,917
Insurance and Finance (0.5%)
- -----------------------------------------------------------------------------------------
600 Banco Totta & Accores S.A. (Portugal) 10,502
Machinery (0.9%)
- -----------------------------------------------------------------------------------------
1,000 Daikin Industries Ltd. (Japan) 9,792
400 Sandvik AB Class B, (Sweden) 9,488
---------
19,280
Medical Supplies and Devices (1.0%)
- -----------------------------------------------------------------------------------------
465 Baxter International, Inc. 21,739
Metals and Mining (0.8%)
- -----------------------------------------------------------------------------------------
360 Freeport-McMoRan Copper & Gold Co., Inc. Class A 10,620
180 Freeport-McMoRan Copper & Gold Co., Inc. Class B 5,625
---------
16,245
Office & Industrial (0.4%)
- -----------------------------------------------------------------------------------------
4,000 Hang Lung Development Co. (Hong Kong) 7,656
Office Equipment (0.5%)
- -----------------------------------------------------------------------------------------
210 Xerox Corp. 11,261
Oil and Gas (7.5%)
- -----------------------------------------------------------------------------------------
170 Amoco Corp. 11,985
110 British Petroleum PLC ADR (United Kingdom) 13,750
500 Burmah Oil PLC (United Kingdom) 8,951
150 Chevron, Inc. 9,394
3,000 Cosmo Oil Co. Ltd. (Japan) 17,087
185 Exxon Corp. 15,401
70 Mobil Corp. 8,103
510 Occidental Petroleum Corp. 11,921
200 Repsol S.A. (Spain) 6,576
90 Royal Dutch Petroleum Co. PLC ADR (Netherlands) 14,051
300 Societe Nationale Elf Aquitaine (France) 23,483
306 Total Corp. ADR (France) 11,972
50 Total SA Class B, (France) 3,939
---------
156,613
Paper (1.5%)
- -----------------------------------------------------------------------------------------
600 Svenska Cellulosa AB Class B, (Sweden) 12,328
410 Weyerhaeuser Co. 18,911
---------
31,239
Pharmaceuticals and Biotechnology (3.4%)
- -----------------------------------------------------------------------------------------
200 American Home Products Corp. 12,750
150 Bristol-Myers Squibb Co. 14,456
5 Ciba-Geigy AG (Switzerland) 6,393
430 Pharmacia & Upjohn, Inc. 17,738
295 Warner-Lambert Co. 19,470
---------
70,807
Photography (1.4%)
- -----------------------------------------------------------------------------------------
225 Eastman Kodak Co. 17,663
255 Polaroid Corp. 11,220
---------
28,883
Publishing (1.6%)
- -----------------------------------------------------------------------------------------
260 Deluxe Corp. 9,815
250 McGraw-Hill, Inc. 10,656
310 Times Mirror Co. Class A 13,795
---------
34,266
Railroads (1.5%)
- -----------------------------------------------------------------------------------------
365 Canadian National Railway Co. (Canada) 7,483
145 Conrail, Inc. 10,494
75 Norfolk Southern Corp. 6,853
100 Union Pacific Corp. 7,325
---------
32,155
Real Estate (1.1%)
- -----------------------------------------------------------------------------------------
1,000 Hong Kong Land Holdings Ltd. (Hong Kong) 2,330
2,000 Sun Hung Kai Properties Ltd. (Hong Kong) 21,273
---------
23,603
Retail (4.0%)
- -----------------------------------------------------------------------------------------
500 Dayton Hudson Corporation 16,500
1,360 Kmart Corp. 13,940
255 May Department Stores Co. 12,399
230 Penney (J.C.) Co., Inc. 12,449
430 Rite Aid Corp. 15,588
255 Sears, Roebuck & Co. 11,411
---------
82,287
Savings and Loans (0.6%)
- -----------------------------------------------------------------------------------------
420 Ahmanson (H.F.) & Co. 11,760
Semiconductors (1.2%)
- -----------------------------------------------------------------------------------------
200 SGS-Thomson Microelectronics ADR (France) + 9,475
280 Texas Instruments, Inc. 15,435
---------
24,910
Shipping (0.3%)
- -----------------------------------------------------------------------------------------
2,000 Malaysia International Shipping Berhad (Malaysia) 6,145
Telecommunication (0.3%)
- -----------------------------------------------------------------------------------------
205 Royal PTT Nederland N.V. ADR (Netherlands) 7,073
Telephone Services (1.9%)
- -----------------------------------------------------------------------------------------
240 GTE Corp. 9,240
260 NYNEX Corp. 11,310
210 Pacific Telesis Group 7,061
300 Sprint Corp. 11,663
---------
39,274
Telephone Utilities (1.7%)
- -----------------------------------------------------------------------------------------
235 Bell Atlantic Corp. 14,071
260 BellSouth Corp. 9,620
220 SBC Communications, Inc. 10,588
---------
34,279
Textiles (0.7%)
- -----------------------------------------------------------------------------------------
50 Chargeurs S.A. (France) 1,851
2,000 Toray Industries Inc. (Japan) 12,685
---------
14,536
Tobacco (3.3%)
- -----------------------------------------------------------------------------------------
285 American Brands, Inc. 12,041
1,100 B A T Industries PLC (United Kingdom) 7,327
225 Philip Morris Cos., Inc. 20,194
2,305 RJR Nabisco Holdings Corp. 13,594
100 Tabacalera S.A. (Spain) 4,270
405 Universal Corp. 10,328
---------
67,754
Trucking (0.6%)
- -----------------------------------------------------------------------------------------
405 Ryder System, Inc. 11,998
---------
Total Common Stocks (cost $1,871,878) 2,018,730
SHORT-TERM INVESTMENTS (2.0%) * (cost $42,007)
PRINCIPAL AMOUNT VALUE
- -----------------------------------------------------------------------------------------
$42,000 Interest in $365,453,000 joint repurchase agreement dated
September 30, 1996 with Goldman, Sachs & Co. due
October 1, 1996 with respect to various U.S. Treasury
obligations-maturity value of $42,007 for an effective
yield of 5.625% 42,007
- -----------------------------------------------------------------------------------------
Total Investments (cost $1,913,885)*** 2,060,737
- -----------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $2,076,887.
*** The aggregate identified cost on a tax basis is
$1,913,885, resulting in gross unrealized appreciation and
depreciation of $167,360 and $20,508, respectively,
or net unrealized appreciation of $146,852.
+ Non-income-producing security.
ADR after the name of a foreign holding
stands for American Depository Receipts,
representing ownership of foreign
securities on deposit with a domestic custodian bank.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Forward Currency Contracts to Sell at September 30, 1996
(Aggregate Face Value $255,804)
Unrealized
Market Aggregate Face Delivery Appreciation/
Value Value Date (Depreciation)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
British Pounds $ 15,334 $ 14,868 11/12/96 $ (466)
Deutschemarks 28,275 28,926 11/12/96 651
French Francs 44,678 44,578 11/12/96 (100)
Japanese Yen 135,638 137,644 1/6/97 2,006
Netherlands Guilders 29,334 29,788 11/12/96 454
- ---------------------------------------------------------------------------------------------
2,545
- ---------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
September 30, 1996
<S> <C>
Assets
Investments in securities, at value (identified cost $1,913,885) (Note 1) $2,060,737
- ------------------------------------------------------------------------------------------------------
Cash 488
- ------------------------------------------------------------------------------------------------------
Dividends and other receivables 7,736
- ------------------------------------------------------------------------------------------------------
Receivable for securities sold 54,639
- ------------------------------------------------------------------------------------------------------
Receivable for open forward currency contracts 3,111
- ------------------------------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 5,441
- ------------------------------------------------------------------------------------------------------
Total assets 2,132,152
Liabilities
- ------------------------------------------------------------------------------------------------------
Payable for securities purchased 41,951
- ------------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 2,632
- ------------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 457
- ------------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 10
- ------------------------------------------------------------------------------------------------------
Payable for organization expenses (Note 1) 6,425
- ------------------------------------------------------------------------------------------------------
Payable for open forward currency contracts 566
- ------------------------------------------------------------------------------------------------------
Payable for closed forward currency contracts 276
- ------------------------------------------------------------------------------------------------------
Other accrued expenses 2,948
- ------------------------------------------------------------------------------------------------------
Total liabilities 55,265
- ------------------------------------------------------------------------------------------------------
Net assets $2,076,887
Represented by
- ------------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $1,647,013
- ------------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 33,002
- ------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency
transactions (Note 1) 247,645
- ------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets
and liabilities in foreign currencies 149,227
- ------------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $2,076,887
Computation of net asset value and offering price
- ------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share
($2,076,887 divided by 192,811 shares) $10.77
- ------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25 of 10.77)* $11.43
- ------------------------------------------------------------------------------------------------------
*On single retail sales of less than $50,000. On sales of $50,000
or more and on group sales the offering price is reduced.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended September 30, 1996
<S> <C>
Investment Income:
- --------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $2,441) $ 57,590
- --------------------------------------------------------------------------------------------
Interest 1,169
- --------------------------------------------------------------------------------------------
Total investment income 58,759
Expenses:
- --------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 15,378
- --------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 4,597
- --------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 1,638
- --------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 191
- --------------------------------------------------------------------------------------------
Reports to shareholders 4,477
- --------------------------------------------------------------------------------------------
Administrative services (Note 2) 40
- --------------------------------------------------------------------------------------------
Auditing 11,749
- --------------------------------------------------------------------------------------------
Legal 3,526
- --------------------------------------------------------------------------------------------
Other 202
- --------------------------------------------------------------------------------------------
Fees waived by Manager (Note 2) (17,391)
- --------------------------------------------------------------------------------------------
Total expenses 24,407
- --------------------------------------------------------------------------------------------
Expense reduction (Note 2) (4,617)
- --------------------------------------------------------------------------------------------
Net expenses 19,790
- --------------------------------------------------------------------------------------------
Net investment income 38,969
- --------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 257,648
- --------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) 9,451
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in foreign
currencies during the year 2,415
- --------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the year (22,111)
- --------------------------------------------------------------------------------------------
Net gain on investments 247,403
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $286,372
- --------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
January 3, 1995
Statement of changes in net assets (commencement
Year ended of operations)
September 30 to September 30
1996 1995
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Increase in net assets
- ------------------------------------------------------------------------------------------------------------------
Operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income $38,969 $49,705
- ------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions 267,099 (6,302)
- ------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies (19,696) 168,923
- ------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 286,372 212,326
- ------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ------------------------------------------------------------------------------------------------------------------
From net investment income (66,094) --
- ------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (3,672) --
- ------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 89,170 1,538,785
- ------------------------------------------------------------------------------------------------------------------
Total increase in net assets 305,776 1,751,111
- ------------------------------------------------------------------------------------------------------------------
Net assets
- ------------------------------------------------------------------------------------------------------------------
Beginning of year 1,771,111 20,000
- ------------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $33,002 and $50,435 respectively) $2,076,887 $1,771,111
- ------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
For the period
January 3, 1995
(commencement
Year ended of operations)
September 30 to September 30
1996 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $9.64 $8.50
- ---------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------
Net investment income (a) .21 .27
- ---------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 1.30 .87
- ---------------------------------------------------------------------------------------------------
Total from investment operations 1.51 1.14
- ---------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------
From net investment income (.36) --
- ---------------------------------------------------------------------------------------------------
From net realized gain on investments (.02) --
- ---------------------------------------------------------------------------------------------------
Total distributions (.38) --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $10.77 $9.94
- ---------------------------------------------------------------------------------------------------
Total investment return at net asset value (%) (b) 16.25 13.41*
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,077 $1,771
- ---------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) (a) (c) 1.27 .49*
- ---------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) (a) 2.03 3.04*
- ---------------------------------------------------------------------------------------------------
Portfolio turnover (%) 222.89 21.68*
- ---------------------------------------------------------------------------------------------------
Average commission rate paid (d) $0.0374 --
- ---------------------------------------------------------------------------------------------------
Effective December 28, 1995, the fund expanded its investment flexibility to
include securities outside of the utilities sector. Information in the table
prior to December 28, 1995, may not reflect those that could have been achieved
under the fund's current investment policies. (Note 1)
* Not annualized.
(a) Reflects an expense limitation during the period (See Note 2). As a result of
such limitation, expenses of the fund for the periods ended September 30, 1996 and
September 30, 1995 reflect a reduction of approximately $.09 and $.20 per share,
respectively.
(b) Total investment return assumes dividend reinvestment
and does not reflect the effect of sales charges.
(c) Includes amounts paid through
expense offset and brokerage service arrangements. (See Note 2).
(d) Average commission rate paid is required for fiscal periods beginning
September 1, 1995.
</TABLE>
Notes to financial statements
September 30, 1996
Note 1
Significant accounting policies
The fund formerly Putnam Global Utilities Fund, is a series of
Putnam Investment Funds (the "Trust") which is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-
end management investment company. The objective of the fund is to
seek capital appreciation and current income as a secondary
objective by investing primarily in common stocks with significant
portion of its asset in countries outside the United States.
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 fair market value, which is
determined using the last reported sale price, or, if no sales are
reported--as is the case of some securities traded over-the-counter-
- -the last reported sale price. Market quotations are not considered
to be readily available for long term corporate bonds and notes;
such investments are stated at fair market value on the basis of
valuations furnished by a pricing service, approved by the Trustees.
Short-term investments having remaining maturities of 60 days or
less are stated at amortized cost, which approximates market value.
All 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. Putnam Management is responsible for
determining that the value of these underlying securities is at all
times at least equal to the resale price, including accrued
interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to
buy or sell is executed). Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date except
that certain dividends from foreign securities are recorded as soon
as the fund is informed of the ex-dividend date.
E) Foreign currency translation The accounting records of the fund
are maintained in U.S. dollars. The market value of foreign
securities, currency holdings, 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 fluctuations
are included with the net realized and unrealized gain or loss on
investments. Net realized gains and losses on foreign currency
transactions represent net exchange gains or losses on closed
forward currency contracts, disposition of foreign currencies and
the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized gains
and losses on foreign currency transactions 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 forward currency
exchange rates supplied by a quotation service. The market value of
the contract will fluctuate with changes in currency exchange rates.
The contract is "marked to market" daily and the change in market
value is recorded as an unrealized gain or loss. When the contract
is closed, the fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was
opened and the value at the time it was closed. The fund could be
exposed to risk if the value of the currency changes unfavorably, if
the counterparties to the contracts are unable to meet the terms of
their contracts or if the fund is unable to enter into a closing
position.
G) 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.
Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation on securities held and for
excise tax on income and capital gains.
H) 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 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. These differences include treatment of realized and
unrealized gains and losses on forward foreign currency contracts,
and organization expenses. Reclassifications are made to the fund's
capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations. For the year ended September 30, 1996, the fund
reclassified $9,692 to increase undistributed net investment income
and $241 to decrease paid-in-capital, with a decrease to accumulated
net realized gain on investments of $9,451. The calculation of net
investment income per share in the financial highlights table
excludes these adjustments.
I) Expenses of the trust Expenses directly charged or attributable
to any fund will be paid from the assets of that fund. Generally,
expenses of the trust will be allocated among and charged to the
assets of each fund on a basis that the Trustees deem fair and
equitable, which may be based on the relative assets of each fund or
the nature of the services performed and relative applicability to
each fund.
J) Unamortized organization expenses incurred by the fund in
connection with its organization, its registration with the
Securities and Exchange Commission and with various states and the
initial public offering of its shares were $6,425. These expenses
are being amortized on projected net asset levels over a five-year
period. The fund will reimburse Putnam Management for the payment of
these expenses.
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: .80%
of the first $500 million of average net assets, 0.70% of the next
$500 million, 0.65% of the next $500 million, 0.60% of the next $5
billion, 0.575% of the next $5 billion. 0.555% of the next $ 5
billion, 0.54% of the next $5 billion, and 0.53% thereafter,
subject, under current law, to reduction in any year by the amount
of certain brokerage commissions and fees (less expenses) received
by affiliates of Putnam Management on the fund's portfolio
transactions.
Putnam Management has agreed to limit its compensation (and, to the
extent necessary, bear other expenses) through December 31, 1996, to
the extent that expenses of the fund (exclusive of brokerage,
interest, taxes, deferred organizational and extraordinary expenses,
credits from Putnam Fiduciary Trust Company (PFTC), a wholly-owned
subsidiary of Putnam Investments, Inc. and payments under the
Trust's distribution plan) would exceed an annual rate of 1.45% of
the fund's average net assets. Prior to January 1, 1996 the expenses
were limited to .60% of the fund's average net assets.
The fund reimburses Putnam Management 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, a
wholly-owned subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services,
a division of PFTC.
For the year ended September 30, 1996, fund expenses were reduced by
$4,617 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.
Trustees of the fund receive an annual Trustees fee of $100 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 adopted a Trustee Fee Deferral Plan (the "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 Plan.
The fund has adopted a distribution plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940, The purpose of
the Plan 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 Plan
provides for payment by the fund to Putnam Mutual Funds Corp. at an
annual rate of up to 0.35% of the fund's average net assets. The
fund is not currently making any payments pursuant to the plan.
For the year ended September 30, 1996, Putnam Mutual Funds Corp.,
acting as underwriter received no commissions from the sale of
shares of the fund.
Note 3
Purchase and sales of securities
During the year ended September 30, 1996, purchases and sales of
investment securities other than short-term investments aggregated
$4,437,085 and $4,405,154, respectively. There were no purchases and
sales of U.S. government obligations. In determining the net gain or
loss on securities sold, the cost of securities has been determined
on the identified cost basis.
Note 4
Capital shares
At September 30, 1996, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were
as follows:
Year ended
September 30, 1996
- ----------------------------------------------------
Shares Amount
- ----------------------------------------------------
Shares sold 1,972 $20,241
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 7,267 69,765
- ----------------------------------------------------
9,239 90,006
Shares
repurchased (85) (836)
- ----------------------------------------------------
Net increase 9,154 $89,170
- ----------------------------------------------------
For the period
January 3, 1995
(commencement of
operations) to
September 30, 1995
- ----------------------------------------------------
Shares Amount
- ----------------------------------------------------
Shares sold 181,635 $1,541,857
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- ----------------------------------------------------
181,635 1,541,857
Shares
repurchased (331) (3,072)
- ----------------------------------------------------
Net increase 181,304 $1,538,785
- ----------------------------------------------------
At September 30, 1996, Putnam Investment Management, Inc. owned
183,456 shares of the fund (95.10% of shares outstanding) valued at
$1,975,821.
Federal tax information
(Unaudited)
The fund has designated 11.84% of the distributions from net
investment income as qualifying for the dividends received deduction
for corporations.
The Form 1099 you receive in January 1997 will show the tax status
of all distributions paid to your account in calendar 1996.
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT
ACCOUNTANTS
Coopers & Lybrand L.L.P.
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
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
Anthony W. Regan
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
Gary N. Coburn
Vice President
Hugh H. Mullin
Vice President and Fund Manager
Justin M. Scott
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Global
Growth and Income 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' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or
guaranteed or endorsed by, any financial institution; are not
insured by the Federal Deposit Insurance Corporation (FDIC), the
Federal Reserve Board or any other agency; and involve risk,
including the possible loss of the principal amount invested.
28352-197 11/96
