Putnam
International
Voyager
Fund
SEMIANNUAL REPORT
February 28, 1998
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* Putnam International Voyager Fund has delivered impressive returns
for the past year, as evidenced by the fund's class A shares top decile
ranking (10 out of 458 funds) among all international funds tracked by
Lipper Analytical Services as of March 31, 1998.*
* "Some of the benefits of investing in smaller international
companies can be seen in the changes taking place around the world. For
example, Europe is beginning to experience the development of an equity
culture. European investors are becoming more interested in investing in
their own stock markets and that demand may become apparent in the smaller
segments of the equity market."
-- Omid Kamshad, fund manager
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
15 Financial statements
*Lipper is an industry research firm whose rankings are based on total
return performance, vary over time, and do not reflect the effects of
sales charges. Performance of other share classes will vary. Past
performance is not indicative of future results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Putnam International Voyager Fund's strategy of targeting small and midsize
companies located outside the United States served it well during the first
half of fiscal 1998. Using what they call a core investment style -- a blend
of growth and value investing -- your fund's managers seek out companies that
offer reasonably dependable earnings growth rates and what they see as
compelling valuations.
Results for the six months ended February 28, 1998, certainly speak well not
only of the strategy but of the expertise with which it was applied. For the
period, the fund's performance at net asset value exceeded its benchmark MSCI
Europe, Australia, and Far East Index (see page 8), its Lipper peer group (as
shown on the facing page), and its internal benchmarks.
In the following report, the management team reviews performance and strategy
during the fiscal year's first half and discusses prospects for the second
half and beyond.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
April 15, 1998
Report from the Fund Managers
Justin M. Scott
Omid Kamshad
Joshua Byrne
Nigel Hart
Throughout the considerable volatility in the international markets in the
second half of 1997, Putnam International Voyager Fund's focus on dependable
earnings and compelling valuations has continued to produce solid performance.
The fund's portfolio of small and midsize companies located outside the United
States delivered a total return of 11.50% for class A shares at net asset
value (5.10% at public offering price). That return compared favorably to the
7.50% six-month return of the Morgan Stanley Capital International EAFE Index.
For more performance information, including results for other share classes,
please turn to page 8.
* EMPHASIS ON EUROPE PAYS OFF
With each passing month bringing us closer to Europe's Economic and Monetary
Union (EMU) in January 1999, the Continent has enjoyed low or falling interest
rates and reasonably steady growth -- all despite stubbornly high unemployment
rates. The so-called peripheral countries of Ireland, Spain, Portugal, and
Italy have particularly benefited from this economic environment; their growth
rates have led the region and their interest rates have fallen more into line
with those of the core countries of France and Germany. This convergence
effect has occurred because interest rates and monetary policy will be unified
under EMU.
Spanish holdings made up an increasingly significant part of the fund's
portfolio over the semiannual period, chiefly smaller companies participating
in the country's economic recovery. Corp. Financiera Reunida (Cofir), one of
the fund's most successful investments, was originally a diversified holding
company but has now restructured to focus on business hotels and wine
production. Because Cofir owns hotels across Spain, the company has been able
to take advantage of increased business activity as a result of the domestic
recovery. While this holding, along with others discussed in this report, was
viewed favorably at the end of the fiscal period, all are subject to review
and adjustment in accordance with the fund's investment strategy and may vary
in the future.
Spanish bank stocks have also performed well, benefiting from the falling
interest-rate environment. Stocks of large banks have had a strong rally, but
some good smaller players have been left behind. We targeted Banco Pastor, a
well-run regional bank based in Galicia in northwest Spain, which, in our
view, is currently undervalued.
We also found companies that benefited from stronger consumer demand across
Europe. For example, cellular phone subscriptions in Europe have risen rapidly
for the past several years. We sought to take advantage of this trend through
companies such as ESAT of Ireland and Bouygues of France (a construction
company with a controlling stake in a French mobile operator). The fund has
taken advantage of European demand for travel services through Swiss-based
Kuoni Reisen, a high-end travel and tour operator that caters to Europeans
looking to travel outside the Continent. Finally, increased advertising
spending as well as effective cost control has benefited media outlets such as
French television stations M6 Metropole Television and Television Francaise I
as well as leading French radio station operator NRJ.
* ASIA: TARGETING SINGAPORE AND HONG KONG
As the Asian financial crisis unfolded in the final six months of 1997, it was
clear that the economic damage to that region was not uniform and that there
were several areas of opportunity. One of these areas was Singapore bank
stocks. We estimated that the banks had about a 10% to 15% loan exposure to
the rest of Southeast Asia but that their domestic loan books were in good
shape. We believe that, in time, Singapore banks such as OUB and Keppel Bank
will be able to produce strong earnings growth.
[GRAPHIC OMITTED: horizontal bar chart COUNTRY ALLOCATIONS]
COUNTRY ALLOCATIONS*
Switzerland 14.9%
France 13.6%
United Kingdom 10.7%
Spain 7.2%
Japan 7.1%
Singapore 5.6%
Footnote reads:
*Based on net assets as of 2/28/98. Holdings will vary over time.
We also held shares of Hong Kong and Singapore companies that occupy niche
positions in their businesses or offer competitively priced products or
services for export around the world. Some examples from Hong Kong included
mobile phone operator Smartone Telecommunications, Johnson Electric Holdings,
and toy maker Vtech Holdings. In Singapore, the fund had positions in two
electronics firms, GP Batteries and Venture Manufacturing.
We've kept the fund's weighting in Japanese stocks low relative to its
benchmark index. The Japanese government has failed to provide any sustaining
fiscal stimulus to that country's torpid economy. The smaller companies the
fund targets are particularly unattractive in Japan because they tend to be
more domestically oriented; the strongest opportunities in this market in
recent months have been larger, export-oriented companies that do not meet the
fund's selection criteria. Therefore we will wait until we see some
identifiable signs of an uptick in domestic demand in Japan as well as more
attractively priced companies before we consider any appreciable increase in
the country's weighting.
* MIXED OUTLOOK FOR FUTURE
Europe is undergoing tremendous changes that make us optimistic about the
future. In addition to EMU, many companies are embracing the concept of
creating value for shareholders. The companies are rebuilding their businesses
through aggressive corporate restructuring programs, entering into strategic
mergers and acquisitions, and positioning themselves to attract global
capital. We believe our research and analysis can position the fund to take
advantage of opportunities within its investment universe created by these
developments.
On the other hand, it will probably be a while before we raise the fund's
Asian positions significantly with the exception of the individual situations
outlined above. It is clear that Japan is not prepared to be an engine of
growth for Asia. As this report is written, leaders from the other established
economies are putting pressure on Japan to raise its domestic growth and
absorb more Asian exports.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
SCOR (France)
Insurance
Avis Europe PLC (United Kingdom)
Automotive
Bouygues S.A. (France)
Building and construction
Kuoni Reisen AG (Switzerland)
Consumer services
Verwaltungs-und Privat-Bank AG (Switzerland)
Banking
East Telecom Group PLC (Ireland)
Telecommunications
Samas Groep N.V. (Netherlands)
Business equipment and services
Securicor Group PLC (United Kingdom)
Conglomerates
Liechtenstein Global Trust AG (Switzerland)
Non-bank finance
Banco Pastor, S.A. (Spain)
Banking
Footnote reads:
These holdings represent 20.3% of the fund's net assets as of 2/28/98.
In any event, your fund will continue to look for stocks with the dual
attraction of dependable earnings growth and undervalued prices, relying on a
rigorous process of fundamental analysis and a global research team that is
experienced in the dynamics of small and midsize companies. We believe many
smaller international companies are currently mispriced and offer an
attractive investment opportunity. We also believe the fund is well designed
to take advantage of this opportunity through its ability to buy growing and
undervalued smaller companies as well as those companies undergoing
restructurings or offering profitable products.
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 2/28/98, there is no guarantee the fund will continue to hold
these securities in the future. International investing involves certain
risks, such as currency fluctuations, economic instability, and political
developments, not present with domestic investments. This fund invests all or
a portion of its assets in small to midsize companies. Such investments
increase the risk of greater price fluctuations.
Performance summary
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
International Voyager Fund is designed for investors seeking capital
appreciation through common stocks of smaller-capitalization companies
located outside the United States.
TOTAL RETURN FOR PERIODS ENDED 2/28/98
Class A Class B Class M
(inception date) (12/28/95) (10/30/96) (10/30/96)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 11.50% 5.10% 11.03% 6.03% 11.20% 7.32%
- ------------------------------------------------------------------------------
1 year 25.13 17.98 24.08 19.08 24.48 20.09
- ------------------------------------------------------------------------------
Life of fund 54.59 45.67 52.19 49.19 52.87 47.51
Annual average 22.23 18.93 21.35 20.24 21.60 19.62
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 2/28/98
MSCI EAFE Consumer
Index Price Index
- ------------------------------------------------------------------------------
6 months 7.50% 0.68%
- ------------------------------------------------------------------------------
1 year 13.75 1.44
- ------------------------------------------------------------------------------
Life of fund 16.17 5.47
Annual average 7.18 2.49
- ------------------------------------------------------------------------------
Returns for class A and class M shares reflect the current maximum initial
sales charges of 5.75% and 3.50%, respectively. Class B share returns for
the 1-, 5-, and 10-year (where available) and life-of-fund periods reflect
the applicable contingent deferred sales charge (CDSC), which is 5% in the
first year, declines to 1% in the sixth year, and is eliminated
thereafter. Returns shown for class B and class M shares for periods prior
to their inception are derived from the historical performance of class A
shares, adjusted to reflect both the initial sales charge or CDSC, if any,
currently applicable to each class and, in the case of class B and class M
shares, the higher operating expenses applicable to such shares. All
returns assume reinvestment of distributions at NAV and represent past
performance; they do not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares when redeemed
may be worth more or less than their original cost.
TOTAL RETURN FOR PERIODS ENDED 3/31/98
(most recent calendar quarter)
Class A Class B Class M
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 14.09% 7.54% 13.64% 8.64% 13.80% 9.85%
- ------------------------------------------------------------------------------
1 year 35.85 28.04 34.80 29.80 35.08 30.40
- ------------------------------------------------------------------------------
Life of fund 66.86 57.24 64.24 61.24 64.93 59.15
Annual average 25.43 22.17 24.55 23.54 24.78 22.83
- ------------------------------------------------------------------------------
PRICE AND DISTRIBUTION INFORMATION
6 months ended 2/28/98
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------------
Income $0.036 $0.000 $0.001
- ------------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------------
Long-term 0.010 0.010 0.010
- ------------------------------------------------------------------------------
Short-term 0.541 0.541 0.541
- ------------------------------------------------------------------------------
Total $0.587 $0.551 $0.552
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
8/31/97 $11.66 $12.37 $11.60 $11.62 $12.04
- ------------------------------------------------------------------------------
2/28/98 12.34 13.09 12.26 12.30 12.75
- ------------------------------------------------------------------------------
TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the maximum 5.75% sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B shares and assumes redemption at the end of the
period. Your fund's CDSC declines from a 5% maximum during the first year
to 1% during the sixth year. After the sixth year, the CDSC no longer
applies.
COMPARATIVE BENCHMARKS
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 index assumes reinvestment of all distributions and interest
payments and does not take in account brokerage fees or taxes. Securities
in the fund do not match those in the index and performance of the fund
will differ. It is not possible to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Portfolio of investments owned
February 28, 1998 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS (94.6%) *
NUMBER OF SHARES VALUE
Australia (1.7%)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
512,400 Hoyts Cinemas Group $ 992,009
257,106 QBE Insurance Group Ltd. 1,061,885
--------------
2,053,894
Austria (1.1%)
- ------------------------------------------------------------------------------------------------------------
11,111 OMV AG 1,346,551
Canada (4.5%)
- ------------------------------------------------------------------------------------------------------------
500 BCE Mobile Communications, Inc. 144A + 13,350
56,355 BCE Mobile Communications, Inc. + 1,504,704
70,000 Bell Canada International Inc. + 1,260,000
46,000 Cadillac Fairview Corp. + 998,735
97,027 National Bank of Canada 1,615,758
--------------
5,392,547
Denmark (1.7%)
- ------------------------------------------------------------------------------------------------------------
18,183 BG Bank A/S 1,077,628
19,600 Sydbank A/S 990,624
--------------
2,068,252
Finland (4.8%)
- ------------------------------------------------------------------------------------------------------------
38,864 Huhtamaki I Free 1,884,272
15,364 KCI Konecranes International PLC 574,720
47,880 Orion-yhtyma Class B 1,508,476
49,200 Sampo Insurance Co., Ltd. Class A 1,885,092
--------------
5,852,560
France (13.6%)
- ------------------------------------------------------------------------------------------------------------
20,953 Bouygues S.A. 2,939,685
24,700 Chargeurs S.A. 1,460,412
87,300 Compagnie des Machines Bull + 819,648
10,550 Imetal S.A. 1,313,767
8,246 ISIS Holdings + 845,327
1,200 ISIS Holdings 144A 123,016
9,700 M6 Metropole Television 1,089,995
8,010 NRJ S.A. 1,401,454
65,300 SCOR 3,373,887
15,308 Societe Television Francaise 1 (T.F.1) 1,659,813
626 SPIR Communication 49,776
12,076 Sylea 1,426,424
--------------
16,503,204
Germany (1.8%)
- ------------------------------------------------------------------------------------------------------------
13,955 Altana AG 1,114,862
42,850 Beru AG 854,639
2,210 Hannover Rueckversicherungs AG 219,782
--------------
2,189,283
Hong Kong (3.8%)
- ------------------------------------------------------------------------------------------------------------
45,000 Dao Heng Bank Group Ltd. 129,036
328,500 Johnson Electric Holdings Ltd. 1,166,850
575,000 Li & Fung Ltd. 868,961
23,600 Peak International Ltd. + 520,675
298,000 Smartone Telecommunications Holdings 771,751
332,000 VTech Holdings Ltd. 1,157,840
--------------
4,615,113
Ireland (3.4%)
- ------------------------------------------------------------------------------------------------------------
102,300 Esat Telecom Group PLC + 2,109,938
170,301 Greencore Group PLC 851,944
748,200 Waterford Wedgwood PLC 1,142,256
--------------
4,104,138
Italy (1.0%)
- ------------------------------------------------------------------------------------------------------------
95,000 Marzotto & Figli SPA 1,244,169
Japan (7.1%)
- ------------------------------------------------------------------------------------------------------------
16,600 Aiful Corp. 1,244,506
88,000 Apic Yamada Corp. 837,763
20,000 Circle K Japan Co. Ltd. 986,910
46,000 Disco Corp. 1,532,725
35,000 Mitsumi Electric Co. Ltd. 522,015
43,000 Nikko Securities Co. Ltd. 170,226
110,700 Shinki Co. Ltd. 1,932,090
38,000 Taiyo Ink Manufacturing 1,356,605
--------------
8,582,840
Malaysia (0.2%)
- ------------------------------------------------------------------------------------------------------------
85,000 Berjaya Sports Toto Berhad 237,908
Netherlands (4.4%)
- ------------------------------------------------------------------------------------------------------------
117,100 BE Semiconductor Industries N.V. + 1,258,825
38,300 Brunel International N.V. + 936,110
35,605 Samas Groep N.V. 2,086,836
36,800 Smit International N.V. 1,061,348
--------------
5,343,119
New Zealand (0.2%)
- ------------------------------------------------------------------------------------------------------------
85,400 Fletcher Challenge Building 203,159
Norway (3.4%)
- ------------------------------------------------------------------------------------------------------------
106,900 Den Norske Bank ASA 588,394
33,800 Merkantildata ASA 1,572,643
27,100 Tomra Systems ASA 672,483
38,900 Union Bank 1,299,046
--------------
4,132,566
Poland (1.1%)
- ------------------------------------------------------------------------------------------------------------
43,500 Bank Handlowy 144A + 687,895
45,100 Bank Handlowy W Warszawie + 687,775
--------------
1,375,670
Portugal (1.0%)
- ------------------------------------------------------------------------------------------------------------
2,600 Brisa Auto-Estradas de Portugal, S.A. [DBL. DAGGERS] + 122,443
38,400 Cimpor-Cimentos de Portugal, SGPS, S.A. 1,111,905
--------------
1,234,348
Singapore (5.6%)
- ------------------------------------------------------------------------------------------------------------
2,788,500 Courts (Singapore) Ltd. 1,136,757
419,000 Far East Levingston Shipbuilding Ltd. 1,288,833
247,000 GP Batteries International Ltd. 800,957
389,000 Keppel Bank 550,222
695,000 Keppel Land Ltd. 738,357
358,000 Overseas Union Bank Ltd. 1,348,857
223,000 Venture Manufacturing (Singapore) Ltd. 853,984
--------------
6,717,967
Spain (7.2%)
- ------------------------------------------------------------------------------------------------------------
15,011 Banco Pastor, S.A. 1,953,030
21,000 Cementos Portland, S.A. + 1,267,759
53,098 Centros Comerciales Continente, S.A. 1,058,712
240,000 Corp. Financiera Reunida, S.A. + 1,756,439
32,170 Inmobiliaria Metropolitana Vasco Central, S.A. 1,557,017
27,900 Mapfre Vida Seguros 1,123,477
--------------
8,716,434
Sweden (1.4%)
- ------------------------------------------------------------------------------------------------------------
51,100 Seco Tools AB Class B 1,743,679
Switzerland (14.9%)
- ------------------------------------------------------------------------------------------------------------
4,185 Danzas Holding AG + 921,901
4,085 Edipresse S.A. Bearer 1,199,829
948 Georg Fischer AG Bearer + 1,599,426
830 Julius Baer Holding AG 1,919,092
624 Kuoni Reisen AG 2,553,115
2,298 Liechtenstein Global Trust AG 1,985,635
5,903 Publicitas Holding S.A. 1,290,273
1,335 Sairgroup + 1,787,295
490 SIG Schweizerische Industrie-Gesellschaft
Holding AG Bearer 1,385,656
3,282 Sika Finanz AG + 1,129,869
1,013 Verwaltungs-und Privat-Bank AG 2,314,539
--------------
18,086,630
United Kingdom (10.7%)
- ------------------------------------------------------------------------------------------------------------
934,190 Avis Europe PLC 3,211,401
34,800 Dr. Solomon's Group PLC + 1,370,250
403,000 Glynwed International PLC 1,690,279
194,700 IMI PLC 1,348,221
34,100 Molins PLC 180,602
347,291 Securicor Group PLC + 2,073,544
80,600 Virgin Express Holdings PLC + 1,692,600
145,460 Viridian Group PLC 1,298,314
--------------
12,865,211
--------------
Total Common Stocks (cost $99,824,449) $ 114,609,242
SHORT-TERM INVESTMENTS (6.2%) * (cost $7,471,340)
PRINCIPAL AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
$7,469,000 Interest in $700,000,000 joint repurchase
agreement dated February 27, 1998, with
Goldman, Sachs & Co., due March 2, 1998,
with respect to various U.S. Treasury
obligations -- maturity value of $7,472,510
for an effective yield of 5.64% $ 7,471,340
- ------------------------------------------------------------------------------------------------------------
Total Investments (cost $107,295,789) *** $ 122,080,582
- ------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $121,180,236.
*** The aggregate identified cost on a tax basis is $107,319,959
resulting in gross unrealized appreciation and depreciation of
$17,910,751 and $3,150,128 respectively, or net unrealized appreciation
of $14,760,623.
+ Non-income-producing security.
[DBL DAGGER] Restricted, excluding 144A securities, as to public resale. The total market value of
restricted securities held at February 28, 1998, was $122,443 or 0.1% of net assets.
144A after the name of a security represents those exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
The fund had the following industry group concentration greater
than 10% at February 28,1998 (as percentage of net assets):
Banks 10.9%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
February 28, 1998 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $107,295,789) (Note 1) $122,080,582
- ---------------------------------------------------------------------------------------------------
Cash 82,746
- ---------------------------------------------------------------------------------------------------
Dividends and other receivables 25,434
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 915,579
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 391,014
- ---------------------------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 3,110
- ---------------------------------------------------------------------------------------------------
Total assets 123,498,465
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 1,693,380
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 136,285
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 313,182
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 61,210
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 1,561
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,039
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 66,701
- ---------------------------------------------------------------------------------------------------
Payable for organization expenses (Note 1) 3,662
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 40,209
- ---------------------------------------------------------------------------------------------------
Total liabilities 2,318,229
- ---------------------------------------------------------------------------------------------------
Net assets $121,180,236
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $108,694,223
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (507,483)
- ---------------------------------------------------------------------------------------------------
Distributions in excess of realized gain on investments and foreign
currency transactions (Note 1) (1,791,341)
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 14,784,837
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $121,180,236
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($63,200,285 divided by 5,122,040 shares) $12.34
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $12.34)* $13.09
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($52,255,351 divided by 4,260,934 shares)** $12.26
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($5,724,600 divided by 465,327 shares) $12.30
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $12.30)* $12.75
- ---------------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales,
the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended February 28, 1998 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $39,913) $ 283,194
- --------------------------------------------------------------------------------------------------
Interest 270,537
- --------------------------------------------------------------------------------------------------
Total investment income 553,731
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 592,980
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 213,266
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 6,844
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 4,234
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 63,576
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 216,497
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 18,155
- --------------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 160
- --------------------------------------------------------------------------------------------------
Reports to shareholders 17,761
- --------------------------------------------------------------------------------------------------
Registration fees 7,911
- --------------------------------------------------------------------------------------------------
Auditing 10,712
- --------------------------------------------------------------------------------------------------
Legal 3,967
- --------------------------------------------------------------------------------------------------
Postage 4,459
- --------------------------------------------------------------------------------------------------
Other 6,208
- --------------------------------------------------------------------------------------------------
Total expenses 1,166,730
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (29,110)
- --------------------------------------------------------------------------------------------------
Net expenses 1,137,620
- --------------------------------------------------------------------------------------------------
Net investment loss (583,889)
- --------------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (1,565,538)
- --------------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (206,738)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the period 96,623
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 13,490,719
- --------------------------------------------------------------------------------------------------
Net gain on investments 11,815,066
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $11,231,177
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
February 28 August 31
1998* 1997
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- -----------------------------------------------------------------------------------------------------------
Operations:
- -----------------------------------------------------------------------------------------------------------
Net investment loss $ (583,889) $ (55,058)
- -----------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions (1,772,276) 5,150,993
- -----------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
asset and liabilities in foreign currencies 13,587,342 1,045,488
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 11,231,177 6,141,423
- -----------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- -----------------------------------------------------------------------------------------------------------
From net investment income
Class A (159,691) (61,397)
- -----------------------------------------------------------------------------------------------------------
Class B -- (25,675)
- -----------------------------------------------------------------------------------------------------------
Class M (432) (3,552)
- -----------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (2,453,405) (33,131)
- -----------------------------------------------------------------------------------------------------------
Class B (2,132,632) (14,909)
- -----------------------------------------------------------------------------------------------------------
Class M (237,711) (1,855)
- -----------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 35,697,572 70,805,726
- -----------------------------------------------------------------------------------------------------------
Total increase in net assets 41,944,878 76,806,630
Net assets
- -----------------------------------------------------------------------------------------------------------
Beginning of period 79,235,358 2,428,728
- -----------------------------------------------------------------------------------------------------------
End of period (including distributions in excess and
undistributed net investment income of $507,483 and
$236,529, respectively) $121,180,236 $79,235,358
- -----------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ----------------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share February 28 Year ended Dec. 28, 1995+
operating performance (Unaudited) August 31 to Aug. 31
- ----------------------------------------------------------------------------------------------------------------------------
1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $11.66 $9.47 $8.50
- ----------------------------------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)(d) (.05) .02(c) .04(c)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.32 2.28 .93
- ----------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.27 2.30 .97
- ----------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------
From net
investment income (.04) (.07) --
- ----------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.55) (.04) --
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions (.59) (.11) --
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.34 $11.66 $9.47
- ----------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 11.50* 24.44 11.41*
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $63,200 $40,687 $2,429
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.00* 2.10(c) 1.26*(c)
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) (.41)* .15(c) .44*(c)
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 48.15* 126.65 55.87*
- ----------------------------------------------------------------------------------------------------------------------------
Average commission
rate paid $.0143 $.0194 $.0181
- ----------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expense to average net assets includes amounts paid through expense offset and
brokerage service arrangements (Note 2).
(c) Reflects an expense limitation in effect during the period (Note 2). As a result of such limitation,
expense for class A reflect a reduction of approximately $0.08 per share for the year ended
August 31, 1996. Expenses for the period ended August 31, 1997 reflect a reduction of $0.02, $0.01,
and $0.02 for class A, class B, and class M, respectively.
(d) Per share net investment income (loss) has been determined on the basis of the weighted
average number of shares outstanding during the period.
(e) Distributions from net investment income amounted to less than $0.01 per share for class M.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ----------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share February 28 October 30, 1996+
operating performance (Unaudited) to August 31
- ----------------------------------------------------------------------------------------------------------------------
1998 1997
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $11.60 $9.82
- ----------------------------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss)(d) (.09) (.06)(c)
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.30 1.94
- ----------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.21 1.88
- ----------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------
From net
investment income -- (.06)
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.55) (.04)
- ----------------------------------------------------------------------------------------------------------------------
Total distributions (.55) (.10)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.26 $11.60
- ----------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 11.03* 19.35*
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $52,255 $34,463
- ----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.37* 2.39*(c)
- ----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) (.79)* (.50)*(c)
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 48.15* 126.65
- ----------------------------------------------------------------------------------------------------------------------
Average commission
rate paid $.0143 $.0194
- ----------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expense to average net assets includes amounts paid through expense offset and
brokerage service arrangements (Note 2).
(c) Reflects an expense limitation in effect during the period (Note 2). As a result of such limitation,
expense for class A reflect a reduction of approximately $0.08 per share for the year ended
August 31, 1996. Expenses for the period ended August 31, 1997 reflect a reduction of $0.02, $0.01,
and $0.02 for class A, class B, and class M, respectively.
(d) Per share net investment income (loss) has been determined on the basis of the weighted
average number of shares outstanding during the period.
(e) Distributions from net investment income amounted to less than $0.01 per share for class M.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ---------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share February 28 October 30, 1996+
operating performance (Unaudited) to August 31
- ---------------------------------------------------------------------------------------------------------------
1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $11.62 $9.82
- ---------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) (.08) (.03)(c)
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.31 1.93
- ---------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.23 1.90
- ---------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------
From net
investment income --(e) (.06)
- ---------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.55) (.04)
- ---------------------------------------------------------------------------------------------------------------
Total distributions (.55) (.10)
- ---------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.30 $11.62
- ---------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 11.20* 19.56*
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $5,725 $4,086
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.25* 2.18*(c)
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) (.66)* (.26)*(c)
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 48.15* 126.65
- ---------------------------------------------------------------------------------------------------------------
Average commission
rate paid $.0143 $.0194
- ---------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) The ratio of expense to average net assets includes amounts paid through expense offset and
brokerage service arrangements (Note 2).
(c) Reflects an expense limitation in effect during the period (Note 2). As a result of such limitation,
expense for class A reflect a reduction of approximately $0.08 per share for the year ended
August 31, 1996. Expenses for the period ended August 31, 1997 reflect a reduction of $0.02, $0.01,
and $0.02 for class A, class B, and class M, respectively.
(d) Per share net investment income (loss) has been determined on the basis of the weighted
average number of shares outstanding during the period.
(e) Distributions from net investment income amounted to less than $0.01 per share for class M.
</TABLE>
Notes to financial statements
February 28, 1998 (Unaudited)
Note 1
Significant accounting policies
Putnam International Voyager 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 fund seeks long-term capital appreciation by investing
primarily in equity securities of small-and mid-capitalization companies whose
principle place of business is located outside of the United States or whose
securities are principally traded on foreign markets.
The fund offers class A, class B and class M shares. Class A shares are sold
with a maximum front-end sales charge of 5.75%. Class B shares, which convert
to class A shares after approximately eight years, do not pay a front-end
sales charge, but pay a higher ongoing distribution fee than class A shares,
and are subject to a contingent deferred sales charge, if those shares are
redeemed within six years of purchase. Class M shares are sold with a maximum
front-end sales charge of 3.50% and pay an ongoing distribution fee that is
lower than class B shares and higher than class A shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if the
fund were liquidated. In addition, the Trustees declare separate dividends on
each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally accepted
accounting principles and requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities. Actual
results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price, or if no sales are reported -- as in the case of some
securities traded over-the-counter -- the last reported bid price. Short-term
investments having remaining maturities of 60 days or less are stated at
amortized cost, which approximates market value following procedures approved
by the Trustees. Foreign securities quoted in foreign currencies are
translated into U.S. dollars at the current exchange rate.
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 gains and losses are included with the
net realized and unrealized gain or loss on investments. Net realized gains
and losses on foreign currency transactions represent net exchange gains or
losses on closed forward currency contracts, disposition of foreign currencies
and the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized appreciation and
depreciation of assets and liabilities in foreign currencies arise from
changes in the value of open forward currency contracts and assets and
liabilities other than investments at the period end, resulting from changes
in the exchange rate.
F) Forward currency contracts The fund may engage in forward currency
contracts, which are agreements between two parties to buy and sell currencies
at a set price on a future date, to protect against a decline in value
relative to the U.S. dollar of the currencies in which its portfolio
securities are denominated or quoted (or an increase in the value of a
currency in which securities a fund intends to buy are denominated, when a
fund holds cash reserves and short-term investments). The U.S. dollar value of
forward currency contracts is determined using current forward currency
exchange rates supplied by a quotation service. The market value of the
contract will fluctuate with changes in currency exchange rates. The contract
is "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) Line of credit The fund has entered into a committed line of credit with
certain banks. This line of credit agreement includes restrictions that the
fund maintain an asset coverage ratio of at least 300% and borrowings must not
exceed prospectus limitations. For the six months ended February 28, 1998, the
fund had no borrowings against the line of credit.
H) Federal taxes It is the policy of the fund to distribute all of its taxable
income within the prescribed time and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986, as amended. Therefore, no provision has been made for federal taxes
on income, capital gains or unrealized appreciation on securities held nor for
excise tax on income and capital gains.
I) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date. Capital
gain distributions, if any, are recorded on the ex-dividend date and paid at
least annually. The amount and character of income and gains to be distributed
are determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Reclassifications are made to the
fund's capital accounts to reflect income and gains available for distribution
(or available capital loss carryovers) under income tax regulations.
J) 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.
K) 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: 1.20% of the first $500 million of
average net assets, 1.10% of the next $500 million, 1.05% of the next $500
million, 1.00% of the next $5 billion, 0.975% of the next $5 billion, 0.955%
of the next $5 billion, 0.94% of the next $5 billion, and 0.93% thereafter.
Putnam Management has agreed to limit its compensation (and, to the extent
necessary, bear other expenses) through August 31, 1998, 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
1.85% 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, 1998, fund expenses were reduced by
$29,110 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the Statement
of operations exclude these credits. The fund could have invested a portion of
the assets utilized in connection with the expense offset arrangements in an
income producing asset if it had not entered into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $710 has
been allocated to the fund, and an additional fee for each Trustee's meeting
attended. Trustees who are not interested persons of Putnam Management and who
serve on committees of the Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan") which
allows the Trustees to defer the receipt of all or a portion of Trustees Fees
payable on or after July 1, 1995. The deferred fees remain in the fund and are
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments
Inc., for services provided and expenses incurred by it in distributing shares
of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds
Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets
attributable to class A, class B and class M shares, respectively. The
Trustees currently limit payment by the fund to an annual rate of 0.25%, 1.00%
and 0.75% of the average net assets attributable to class A, class B and class
M shares respectively.
For the six months ended February 28, 1998, Putnam Mutual Funds Corp., acting
as underwriter received net commissions of $57,942 and $2,737 from the sale of
class A and class M shares, respectively and $33,268 in contingent deferred
sales charges from redemptions of class B shares. A deferred sales charge of
up to 1% is assessed on certain redemptions of class A shares. For the six
months ended February 28, 1998, Putnam Mutual Funds Corp., acting as
underwriter received $47 on class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended February 28, 1998, purchases and sales of
investment securities other than short-term investments aggregated $72,522,440
and $43,380,295, 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, 1998, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
February 28, 1998
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 2,133,983 $25,134,805
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 224,633 2,461,976
- ------------------------------------------------------------
2,358,616 27,596,781
Shares
repurchased (725,535) (8,427,633)
- ------------------------------------------------------------
Net increase 1,633,081 $19,169,148
- ------------------------------------------------------------
Year ended
August 31, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 5,364,541 $58,632,380
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 8,877 88,147
- ------------------------------------------------------------
5,373,418 58,720,527
Shares
repurchased (2,140,948) (23,963,526)
- ------------------------------------------------------------
Net increase 3,232,470 $34,757,001
- ------------------------------------------------------------
Six months ended
February 28, 1998
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 1,593,302 $18,767,525
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 180,243 1,966,453
- ------------------------------------------------------------
1,773,545 20,733,978
Shares
repurchased (483,257) (5,549,073)
- ------------------------------------------------------------
Net increase 1,290,288 $15,184,905
- ------------------------------------------------------------
For the period
October 30, 1996
(commencement of
operations) to
August 31, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 3,287,600 $35,748,997
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,637 36,113
- ------------------------------------------------------------
3,291,237 35,785,110
Shares
repurchased (320,591) (3,515,037)
- ------------------------------------------------------------
Net increase 2,970,646 $32,270,073
- ------------------------------------------------------------
Six months ended
February 28, 1998
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 142,742 $1,688,441
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 21,552 235,566
- ------------------------------------------------------------
164,294 1,924,007
Shares
repurchased (50,518) (580,488)
- ------------------------------------------------------------
Net increase 113,776 $1,343,519
- ------------------------------------------------------------
For the period
October 30, 1996
(commencement of
operations) to
August 31, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 379,922 $4,076,595
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 570 5,665
- ------------------------------------------------------------
380,492 4,082,260
Shares
repurchased (28,941) (303,608)
- ------------------------------------------------------------
Net increase 351,551 $3,778,652
- ------------------------------------------------------------
At February 28, 1998, Putnam Investments, Inc. owned the following shares:
Class Shares % Ownership Market Value
- --------------------------------------------------------------------
A 250,542 4.89% $3,091,688
M 15,573 3.35 191,548
- --------------------------------------------------------------------
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
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
Donald S. Perkins
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
John J. Morgan, Jr.
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Justin M. Scott
Vice President and Fund Manager
Omid Kamshad
Vice President and Fund Manager
Joshua Byrne
Vice President and Fund Manager
Nigel Hart
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam International
Voyager 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.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
SA011-41148 2AZ/2CI/2CJ 4/98
