Putnam
International
Fund
SEMIANNUAL REPORT
February 28, 1997
[LOGO: BOSTON * LONDON * TOKYO]
The following report contains a list of your fund's portfolio holdings and
complete financial statements for the six months ended 2/28/97. Additional
details, including fund strategy, performance, and managers' outlook, will be
provided in the annual report, which will cover the 12 months ended 8/31/97.
Portfolio of investments owned
February 28, 1997 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (99.3%) *
NUMBER OF SHARES VALUE
Australia (1.2%)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
15,000 Goodman Fielder Ltd. $ 18,210
4,000 Westpac Banking Corp. 22,723
--------------
40,933
Austria (0.5%)
- ---------------------------------------------------------------------------------------------------------
100 VA Technologies AG 15,096
Denmark (0.7%)
- ---------------------------------------------------------------------------------------------------------
400 Danisco A/S 24,218
France (8.4%)
- ---------------------------------------------------------------------------------------------------------
200 Chargeurs S.A. 10,097
600 Credit Locale de France S.A. 59,847
300 Lafarge Coppee 18,775
1,400 Michelin Corp. Class B 87,566
200 Peugeot Citroen S.A. 22,088
700 Societe Nationale Elf Aquitaine 66,877
400 Total Corp. ADR 15,850
--------------
281,100
Germany (10.4%)
- ---------------------------------------------------------------------------------------------------------
50 Altana AG 42,340
2,000 Bayer AG ADR 84,384
100 Bayerische Motoren Werke (BMW) AG 67,271
3,000 Deutsche Telekom AG + 57,737
100 Preussag AG 25,671
1,200 Veba (Vereinigte Elektrizitaets Bergwerks) AG 68,645
--------------
346,048
Hong Kong (3.7%)
- ---------------------------------------------------------------------------------------------------------
3,000 Amoy Properties Ltd. 3,584
15,000 Dao Heng Bank Group Ltd. 77,102
1,000 Guoco Group Ltd. 5,605
3,000 Hutchison Whampoa, Ltd. 22,859
1,500 Swire Pacific Ltd. Class A 12,883
--------------
122,033
Ireland (3.4%)
- ---------------------------------------------------------------------------------------------------------
8,000 Allied Irish Banks PLC 57,194
2,146 Bank of Ireland 21,826
3,169 CRH PLC 32,731
--------------
111,751
Italy (0.9%)
- ---------------------------------------------------------------------------------------------------------
6,000 Ente Nazionale Idrocarburi SPA (ENI) 29,592
Japan (21.9%)
- ---------------------------------------------------------------------------------------------------------
3,000 Bridgestone Corp. 53,987
3,000 Canon, Inc. 62,984
2,000 Daikin Industries Ltd. 15,763
3,000 Hokuriku Electric Power Co. 51,987
1,000 Ito-Yokado Co., Ltd. 45,655
1,100 Kurita Water Industries Ltd. 23,369
2,000 Marui Co., Ltd. 28,826
150 Mitsubishi Bank Ltd. 2,474
7,000 Mitsui & Co. Ltd. 52,137
5,000 NEC Corp. 58,319
1,000 Nippon Shinpan Co. 4,249
5 Nippon Telegraph and Telephone Corp. 35,783
2,000 Nippondenso Co., Ltd. + 38,657
1,000 Omron Corp. 15,829
2,100 Santen Pharmaceutical 41,990
2,000 Shin-Etsu Chemical Co. 38,824
1,000 TDK Corp. 67,317
2,000 Toyota Motor Corp. 51,487
1,000 Yamanouchi Pharmaceutical Co., Ltd. 20,995
2,000 Yamato Transport Co., Ltd. 19,828
--------------
730,460
Malaysia (0.5%)
- ---------------------------------------------------------------------------------------------------------
1,000 Malayan Banking Berhad 11,890
2,200 Sungei Way Holdings Berhad 6,385
--------------
18,275
Netherlands (9.9%)
- ---------------------------------------------------------------------------------------------------------
1,200 ABN AMRO Holding N.V. 86,102
200 Akzo-Nobel N.V. 28,796
1,776 Internationale Nederlanden Groep 68,718
1,500 K.L.M.-Royal Dutch Airlines 45,957
900 Philips Electronics N.V. 40,603
600 Royal PTT 21,478
200 Unilever N.V. 38,092
--------------
329,746
Norway (0.6%)
- ---------------------------------------------------------------------------------------------------------
1,500 Christiana Bank & Trust 5,614
1,000 Saga Petroleum ASA Class B 15,371
--------------
20,985
Singapore (0.6%)
- ---------------------------------------------------------------------------------------------------------
1,000 Development Bank of Singapore Ltd. 13,268
1,000 Overseas Union Bank Ltd. 7,792
--------------
21,060
Spain (1.8%)
- ---------------------------------------------------------------------------------------------------------
1,000 Banco de Bilbao Vizcaya 58,967
Sweden (7.0%)
- ---------------------------------------------------------------------------------------------------------
1,500 Astra AB 71,942
350 Electrolux AB 21,869
1,000 Pharmacia & Upjohn AB 36,970
1,800 Sandvik AB Class A 43,765
1,000 Skandia Forsakrings AB 30,376
1,300 Svenska Cellulosa AB Class B 28,837
--------------
233,759
Switzerland (7.5%)
- ---------------------------------------------------------------------------------------------------------
50 ABB AG 56,814
30 Baer Holdings AG 32,827
60 Nestle S.A. 65,329
53 Novartis AG 60,582
53 Novartis AG Rights expiration date 3/12/97 + 3,360
30 Swiss Reinsurance Co. 30,692
--------------
249,604
United Kingdom (20.3%)
- ---------------------------------------------------------------------------------------------------------
10,000 B A T Industries PLC + 87,450
5,000 Barclays Bank PLC 90,300
7,000 British Petroleum Co. PLC 77,460
3,500 Burmah Castrol PLC 58,907
9,000 General Electric Co. PLC 54,595
3,232 HSBC Holdings PLC 83,266
3,000 RTZ Corp. PLC 45,802
8,012 Scottish Power PLC 45,797
2,200 Shell Transportation & Trading 37,350
20,000 Vodafone Group PLC 94,941
--------------
675,868
- ---------------------------------------------------------------------------------------------------------
Total Investments (cost $3,095,775) *** $ 3,309,495
- ---------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $3,331,889.
*** The aggregate identified cost on a tax basis is $3,097,909, resulting in gross unrealized
appreciation and depreciation of $211,586 and $--, respectively, or net unrealized appreciation
of $211,586.
+ 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>
Statement of assets and liabilities
February 28,1997 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $3,095,775) (Note 1) $3,309,495
- ---------------------------------------------------------------------------------------------------
Cash 30,616
- ---------------------------------------------------------------------------------------------------
Dividends receivable 7,424
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 25
- ---------------------------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 3,596
- ---------------------------------------------------------------------------------------------------
Total assets 3,351,156
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 3,262
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 74
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 157
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 7
- ---------------------------------------------------------------------------------------------------
Payable for organization expenses (Note 1) 3,662
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 12,105
- ---------------------------------------------------------------------------------------------------
Total liabilities 19,267
- ---------------------------------------------------------------------------------------------------
Net assets $3,331,889
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $3,243,521
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (2,773)
- ---------------------------------------------------------------------------------------------------
Distributions in excess of gains on investments and
foreign currency transactions (Note 1) (122,419)
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 213,560
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $3,331,889
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value per share ($3,331,889 divided by 381,115 shares) $8.74
- ---------------------------------------------------------------------------------------------------
Offering price per share (100/94.25 of $8.74)* $9.27
- ---------------------------------------------------------------------------------------------------
* 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
Six months ended February 28,1997 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $2,757) $ 19,063
- --------------------------------------------------------------------------------------------------
Interest 416
- --------------------------------------------------------------------------------------------------
Total investment income 19,479
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 13,012
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 2,594
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 923
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 20
- --------------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 43
- --------------------------------------------------------------------------------------------------
Reports to shareholders 2,932
- --------------------------------------------------------------------------------------------------
Auditing 8,659
- --------------------------------------------------------------------------------------------------
Legal 2,178
- --------------------------------------------------------------------------------------------------
Postage 19
- --------------------------------------------------------------------------------------------------
Fees waived by Manager (Note 2) (6,765)
- --------------------------------------------------------------------------------------------------
Total expenses 23,615
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (2,415)
- --------------------------------------------------------------------------------------------------
Net expenses 21,200
- --------------------------------------------------------------------------------------------------
Net investment loss (1,721)
- --------------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (119,859)
- --------------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (25)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 261,950
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities in
foreign currencies during the period (261)
- --------------------------------------------------------------------------------------------------
Net gain on investments 141,805
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $140,084
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
For the Period
December 28
(commencement
Six months ended of operations) to
February 28, August 31,
1997* 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (1,721) $ 30,489
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions (119,884) 45,808
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments and assets and liabilities
in foreign currencies 261,689 (48,129)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 140,084 28,168
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income (31,476) --
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (48,509) --
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 127,714 115,908
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 187,813 144,076
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 3,144,076 3,000,000
- ----------------------------------------------------------------------------------------------------------------------
End of period (including distributions in excess
of net investment income and undistributed
net investment income of $2,773
and $30,424, respectively) $3,331,889 $3,144,076
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
Six months
ended For the period
Per-share Feb. 28 Dec. 28, 1995+
operating performance (Unaudited) to August 31
- --------------------------------------------------------------------------------------------------------------
1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $8.58 $8.50
- --------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (c) (.01) .08
- --------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments .39 --
- --------------------------------------------------------------------------------------------------------------
Total from
investment operations .38 .08
- --------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------
From net
investment income (.09) --
- --------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.13) --
- --------------------------------------------------------------------------------------------------------------
Total distributions (.22) --
- --------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.74 $8.58
- --------------------------------------------------------------------------------------------------------------
Ratios and suplemental data
- --------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 4.39* 0.94*
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $3,332 $3,144
- --------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b)(c) .72* .98*
- --------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(c) (.05)* .96*
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 40.57* 48.18*
- --------------------------------------------------------------------------------------------------------------
Average commission
rate paid $.0455 $.0538
- --------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return does not reflect the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements (Note 2).
(c) Reflects an expense limitation in effect during the period (Note 2). As a result of such limitation,
expenses for the fund for the period ended February 28, 1997, and August 31, 1996, reflect a
reduction of $0.02 and $0.05 per share, respectively.
</TABLE>
Notes to financial statements
February 28, 1997 (Unaudited)
Note 1
Significant accounting policies
Putnam International Fund (the "fund") is one of a series of Putnam Investment
Funds (the "trust") which is registered under the Investment Company Act of
1940, as amended, as a diversified, open-ended management investment company.
The objective of the fund is to seek long-term capital appreciation by
investing primarily in equity securities of issues which have a principal
place of business located outside of the United States or whose securities are
principally traded on foreign markets.
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 following procedures approved
by the Trustees. Foreign securities quoted in foreign currencies are
translated in U.S. dollars at the current exchange rates.
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 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 assets and liabilities other
than investments at the period end, resulting from changes in the exchange
rate.
F) 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.
G) 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. 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.
H) 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.
I) Unamortized organization expenses 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 $3,662. 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: 0.80% 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% of any excess
thereafter.
Putnam Management has agreed to limit its compensation (and, to the extent
necessary, bear other expenses) through June 30, 1997, to the extent that
expenses of the fund (exclusive of brokerage, interest, taxes, deferred
organizational and extraordinary expense, 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.
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. Investor
servicing agent functions are provided by Putnam Investor Services, a division
of PFTC.
For the six months ended February 28, 1997, fund expenses were reduced by
$2,415 under expense offset arrangements with PFTC. 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 has 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 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 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 Trustees have approved payment by the
fund at an annual rate of 0.35% of the average net assets. The fund is not
currently making any payments pursuant to the Plan.
For the six months ended February 28, 1997, 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 six months ended February 28, 1997, purchases and sales of
investment securities other than short-term investments aggregated $1,462,258
and $1,283,591, 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 February 28, 1997, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
February 28, 1997
- ------------------------------------------------------------
Shares Amount
- ------------------------------------------------------------
Shares sold 6,162 $53,859
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 9,185 79,910
- ------------------------------------------------------------
15,347 133,769
Shares
repurchased (683) (6,055)
- ------------------------------------------------------------
Net increase 14,664 $127,714
- ------------------------------------------------------------
For the period
December 28, 1995
(commencement of
operations) to
August 31, 1996
- ------------------------------------------------------------
Shares Amount
- ------------------------------------------------------------
Shares sold 14,177 $121,749
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- ------------------------------------------------------------
14,177 121,749
Shares
repurchased (667) (5,841)
- ------------------------------------------------------------
Net increase 13,510 $115,908
- ------------------------------------------------------------
At February 28, 1997, Putnam Management owned 361,704 shares
of the fund (94.91% of shares outstanding), valued at $3,161,293.
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
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
Anthony W. Regan
Vice President
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 International
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 principal amount invested.
32134-2AX 4/97
