Putnam
International
Voyager
Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
8-31-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
Last summer, with the world's markets beset by turbulence and uncertainty,
it would have been difficult to imagine that a scant year later we would
be noting their remarkable resilience. The unexpected vitality that many
of these markets are displaying has not occurred by accident; experienced
investors the world over keep a close watch on the fundamentals and
respond accordingly. Where they see potential opportunity, they invest;
where they see potential trouble, they steer clear.
Japan's economy, in retreat for nearly a decade, is showing signs of
recovery and the stock market has taken note. In Europe, dynamic new
companies, capitalizing on emerging technologies, are springing up and
flourishing. Your fund's managers have responded, as they explain in the
following report for Putnam International Voyager Fund's fiscal 1999.
I am pleased to announce the addition of Joseph P. Joseph to the
management team. Joe joined Putnam in 1994 from Vert Independent Capital
Research, Inc. He has 11 years of investment experience.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
October 20, 1999
Report from the Fund Managers
Joshua Byrne
Nigel Hart
Joseph Joseph
Omid Kamshad
Although world markets have been unusually volatile in the past year, they
have also showed unexpected resilience. Securities recovered in a matter
of months from the plunge caused by Russia's currency devaluation in
August 1998. But the good news did not end there. Stronger-than-expected
growth in Japan and other Asian markets has produced strong equity
performance. Putnam International Voyager Fund has benefited from this
upswing, as the small and midsize companies in which the fund mainly
invests proved to be in the vanguard of the recovery. Our strategy, which
targets undervalued stocks of companies positioned for solid growth, fared
well as industry consolidation, new business models, and nascent
technologies helped many holdings achieve strong earnings.
During the past fiscal year, the fund once again posted strong results
relative to its peers and relative to its benchmark index, the Morgan
Stanley Capital International EAFE Index, which achieved 25.67% return for
the year that ended August 31, 1999.
Total return for 12 months ended 8/31/99
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- ------------------------------------------------------------------------
43.98% 35.75% 42.84% 37.84% 42.97% 41.97% 43.17% 38.11%
- ------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods begins on page 6.
* JAPANESE ECONOMIC SURGE BOOSTS STOCKS
Among the most noteworthy events of the past year has been the
extraordinary performance of Japanese equities. This was unexpected
because Japan's economy, which has been in a slump for most of the past
decade, suffered a further decline in 1998. This weakness, combined with
the government's inability to formulate a solution, contributed to global
volatility. At the beginning of the fiscal year we had decided to
underweight Japan because of its weak economic situation. A new prime
minister, Keizo Obuchi, who inspired little confidence as he took office
amid the crisis, is now credited with a successful stimulus program that
has helped the economy expand in both the first and second quarters of
1999.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Insurance and
finance 19.7%
Electronics and
electrical equipment 9.3%
Broadcasting 6.0%
Advertising 5.9%
Telecommunications 5.8%
Footnote reads:
*Based on net assets as of 8/31/99. Holdings will vary over time.
Japan's improving economic situation has been matched by a growing
willingness among Japanese companies to adapt to new ways of doing
business. This has been especially true among the smaller companies in
which your fund mainly invests. An example is Round One, a company that
owns and operates family entertainment centers. We selected this stock
because we believed it appeared undervalued and the company applies an
innovative strategy to achieve earnings growth and a high return on
equity. Round One purchases old bowling alleys in Japanese cities and
remodels them, adding new lighting, videogame arcades, and restaurant
facilities. The company is tapping into pent-up consumer demand and
achieving strong returns on its investments. While this holding, along
with others discussed in this report, were viewed favorably at the end of
the period, all are subject to review and adjustment in accordance with
the fund's investment strategy and may vary in the future.
We continue to find a number of interesting opportunities among smaller
companies in Japan. One reason we have confidence in their potential is
that many of these companies rely on the domestic economy for their
earnings growth. They stand to benefit from the improving economic
situation and are insulated from the effects of a strengthening yen. By
contrast, larger Japanese companies that export extensively have struggled
a bit lately, because the strength of the yen has made their products more
expensive on world markets.
* SINGAPORE AND HONG KONG LEAD ASIAN RECOVERY
While the portfolio held few Japanese equities early in the fiscal year,
we established significant positions in Singapore and Hong Kong. These two
markets were attractive because in our view they are stable developed
markets but nonetheless share in the positive effects when less developed
markets nearby experience growth. We believed these two markets would
benefit as Asian economies rebounded from economic problems of 1997 and
1998. For example, in Singapore, holdings such as Keppel Bank and Overseas
Union Bank have shown new vigor this year thanks to rising consumer
spending and business activity in the region.
Morningstar has awarded Putnam International Voyager Fund's class A shares a
rating of 5 out of 5 stars for 3-year performance as of September 30, 1999.
The top 10% of the 1025 international equity funds rated received 5 stars.*
*Past performance is not indicative of future results. Morningstar ratings
reflect risk-adjusted performance through 9/30/99 and are subject to change
every month. Morningstar ratings are calculated from a fund's 3-, 5-, and
10-year returns (with fee adjustments) in excess of 90-day Treasury bill
returns and a risk factor that reflects performance below 90-day Treasury bill
returns. Performance of other share classes will vary. The fund was not ranked
over longer periods.
* IN EUROPE, YOUNG COMPANIES FOLLOW U.S. MODELS
Although we have been adding to the portfolio's Japanese position this
year, European equities still make up a majority of fund holdings. In
Europe we have found many dynamic young companies selling at attractive
prices. We believe this trend represents a dramatic change in European
markets, where manufacturing companies traditionally dominated. These
old-style companies were unattractive investments because they were
capital intensive and did not achieve high returns on equity. The new type
of company we favor in this fund bases its business models on U.S.
precedents and aims for higher returns on capital investments. Such
companies tend to be clustered in media, software, service, and
telecommunication sectors.
ARM Holdings PLC of the United Kingdom designs microprocessors used in
approximately 70% of cellular phones. We consider its business model one
of the best: Instead of actually making the microprocessors, which
requires investments in factories and dependency on product cycles, ARM
merely licenses its designs to other producers. In a strong endorsement of
the company's technological prowess, in September 1999 Intel, the world's
largest computer chip manufacturer, announced that it would use ARM's
designs for a new generation of products for Internet service providers.
Esat Telecom Group is a long-distance telephone service provider based in
Ireland. It also owns a 50% stake in a cellular telephone service company.
These services in Ireland are fairly new and Esat is tapping into their
popularity; in the past two years it has had a strong surge in
subscribers. In the media sector, we favor France's Havas Advertising,
France's top communications company, and Publicis, which specializes in
designing company homepages as well as advertising and yellow pages for
the World Wide Web.
Putnam International Voyager Fund's class A shares were ranked in the top 1%
of the international funds ranked by Lipper for the 3-year period ended
September 30, 1999. The fund was 1 out of 368 international funds ranked.+
+Past performance is not indicative of future results. 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. For the 1-year period, the fund ranked 14 out of 578
(top 3%) international funds. The fund was not ranked over longer periods.
Financial companies are also offering new opportunities in Europe. Most
households in Europe still do not own equity or mutual fund investments,
but these products are likely to become more popular as interest rates on
bank deposits decline. In Spain and Italy, in particular, government
fiscal discipline imposed by Economic and Monetary Union has brought down
interest rates. To take advantage of the migration of households to new
types of investments, the fund owns management companies that are
gathering new assets. In Italy, the fund owns several regional banks that
distribute mutual funds. One such company is Banca Populare di Brescia.
The fund also owns Julius Baer Holdings, a Swiss brokerage company that is
attracting new clients who are dissatisfied with the impersonal service of
larger banks.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Esat Telecom Group
Ireland
Telecommunications
Banco Popolare di Brescia
Italy
Insurance and finance
Publicitas Holding
Switzerland
Advertising
Aiful
Japan
Insurance and finance
Promise Co.
Japan
Insurance and finance
Benesse
Japan
Education
Round One
Japan
Recreation
Nikko Securities
Japan
Insurance and finance
Kingston Communication
United Kingdom
Telecommunications
Havas Advertising
France
Advertising
Footnote reads:
These holdings represent 17.4% of the fund's net assets as of 8/31/99.
Portfolio holdings will vary over time.
* INTERNATIONAL MARKETS VASTLY IMPROVED SINCE LAST YEAR
As the fund's 2000 fiscal year begins, we believe that world markets are
in a better position than anyone could have anticipated a year ago. As we
have discussed above, Japan and Europe offer dynamic new companies. We
have, in fact, added research capabilities to cover the dramatic changes
in technology, capital goods, media, and retail sectors in many regions of
the globe. Because we have found many attractive companies in developed
markets the fund currently has few holdings in emerging markets. Hong Kong
and Singapore which we consider to be developed markets, might still feel
additional bumps on Asia's road to full recovery, but we are confident
that fund holdings in those countries are globally competitive and able to
weather market turmoil relatively well. In Europe, certain macroeconomic
factors are also supportive, such as a likely cut in business taxes in
Europe, strong consumer spending in France, and a rallying economy in the
United Kingdom. These conditions provide a healthy environment for small
and midsize companies.
The views expressed here are exclusively those of Putnam Management. They
are not meant as investment advice. Although the described holdings were
viewed favorably as of 8/31/99, there is no guarantee the fund will
continue to hold these securities in the future. International investing
includes certain risks, such as currency fluctuations, economic
instability, and political developments. 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 long-term capital appreciation
primarily through common stocks of smaller-capitalization companies located
outside the United States.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 8/31/99
Class A Class B Class C Class M
(inception dates) (12/28/95) (10/30/96) (7/26/99) (10/30/96)
NAV POP NAV CDSC NAV CDSC NAV POP
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 43.98% 35.75% 42.84% 37.84% 42.97% 41.97% 43.17% 38.11%
- --------------------------------------------------------------------------------------------------
Life of fund 123.12 110.25 117.21 114.21 117.10 117.10 118.86 111.19
Annual average 24.44 22.45 23.54 23.07 23.52 23.52 23.79 22.59
- --------------------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 8/31/99
MSCI Consumer
EAFE Index price index
- ---------------------------------------------------------------------
1 year 25.67% 2.33%
- ---------------------------------------------------------------------
Life of fund 39.16 8.93
Annual average 9.43 2.36
- ---------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Returns for class A and class M
shares reflect the current maximum initial sales charges of 5.75% and
3.50% respectively. Class B share returns for the 1-, 5-, and 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 the higher operating expenses applicable to
such shares. For class C shares, returns for periods prior to their
inception are derived from the historical performance of class A shares,
adjusted to reflect both the CDSC currently applicable to class C shares,
which is 1% for the first year and is eliminated thereafter, and the
higher operating expenses applicable to class C shares. All returns assume
reinvestment of distributions at NAV. Investment return and principal
value will fluctuate so that an investor's shares when redeemed may be
worth more or less than their original cost. Performance data reflect an
expense limitation previously in effect. Without the expense limitation,
total returns would have been lower.
[GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 12/28/95
Fund's class A MSCI EAFE Consumer price
Date shares at POP Index index
12/28/95 9,425 10,000 10,000
8/31/96 10,499 10,168 10,248
8/31/97 13,065 11,089 10,476
8/31/98 14,603 11,073 10,645
8/31/99 $21,025 $13,916 $10,893
Footnote reads:
Past performance is no assurance of future results. At the end of the same
time period, a $10,000 investment in the fund's class B or class C shares
would have been valued at $21,721 ($21,421 at CDSC) and $21,710,
respectively, and no contingent deferred sales charges would apply for
class C shares; a $10,000 investment in the fund's class M shares would
have been valued at $21,886 ($21,119 at public offering price).
PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 8/31/99
Class A Class B Class C Class M
- -----------------------------------------------------------------------------
Distributions (number) 1 1 -- 1
- -----------------------------------------------------------------------------
Income $0.135 $0.058 $ -- $0.082
- -----------------------------------------------------------------------------
Capital gains
Long-term 0.249 0.249 -- 0.249
- -----------------------------------------------------------------------------
Short-term 0.022 0.022 -- 0.022
- -----------------------------------------------------------------------------
Total $0.406 $0.329 $ -- $0.353
- -----------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- -----------------------------------------------------------------------------
8/31/98 $12.37 $13.12 $12.25 $ -- $12.30 $12.75
- -----------------------------------------------------------------------------
7/26/99* -- -- -- 16.21 -- --
- -----------------------------------------------------------------------------
8/31/99 17.28 18.33 17.07 17.27 17.15 17.77
- -----------------------------------------------------------------------------
*Inception date of class C shares.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 9/30/99 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (12/28/95) (10/30/96) (7/26/99) (10/30/96)
NAV POP NAV CDSC NAV CDSC NAV POP
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 53.82% 44.97% 52.66% 47.66% 52.73% 51.73% 53.01% 47.60%
- --------------------------------------------------------------------------------------------------
Life of fund 127.38 114.27 121.16 118.16 121.12 121.12 123.07 115.25
Annual average 24.42 22.47 23.50 23.05 23.50 23.50 23.79 22.62
- --------------------------------------------------------------------------------------------------
</TABLE>
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment
returns and principal value will fluctuate so that an investor's shares
when sold may be worth more or less than their original cost. See first
page of performance section for performance calculation method.
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are subject
to a contingent deferred sales charge only if the shares are redeemed
during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including
any initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the 5.75% maximum sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of class B or C shares and assumes redemption at the end of
the period. Your fund's class B CDSC declines from a 5% maximum during the
first year to 1% during the sixth year. After the sixth year, the CDSC no
longer applies. The CDSC for class C shares is 1% for one year after
purchase.
Comparative benchmarks
Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged
list of equity securities from Europe, Australasia and the Far East, with
all values expressed in U.S. dollar. Securities indexes assume
reinvestment of all distributions and interest payments and do not take in
account brokerage fees or taxes. Securities in the fund do not match those
in the indexes and performance of the fund will differ. It is not possible
to invest directly in an index.
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
The Putnam family of funds
The following is a complete list of Putnam's open-end mutual funds. Please call
your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus for
any Putnam fund. It contains more complete information, including charges and
expenses. Please read it carefully before you invest or send money.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund [DBL. DAGGER]
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government
Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund *
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund**
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey,
New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Diversified Income Trust II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply. Contact
Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at www.putnaminv.com.
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investments has won the DALBAR Service Award 8 times in the past 9
years. In 1997 and 1998, Putnam was the only company to win all three
DALBAR awards: for service to investors, to financial advisors, and to
variable annuity contract holders.*
* HELP YOUR INVESTMENTS GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings account.+
* SWITCH FUNDS EASILY
Within the same class of shares, you can move money from one account to
another without a service charge. (This privilege is subject to change or
termination.)
* ACCESS YOUR MONEY QUICKLY
You can get checks sent regularly or redeem shares any business day at the
then-current net asset value, which may be more or less than the original
cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a helpful
Putnam representative. To learn more about Putnam, visit our Web site.
www.putnaminv.com
To make an additional investment in this or any other Putnam fund, contact
your financial advisor or call our toll-free number.
1-800-225-1581
*DALBAR, Inc., an independent research firm, presents the awards to financial
services firms that provide consistently excellent service.
+Regular investing, of course, does not guarantee a profit or protect against
a loss in a declining market.
A guide to the financial statements
These sections of the report, preceded by the Report of independent
accountants, constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values as
of the last day of the reporting period. Holdings are organized by asset
type and industry sector, country, or state to show areas of concentration
and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price is determined. All investment and non-investment assets are
added together. Any unpaid expenses and other liabilities are subtracted
from this total. The result is divided by the number of shares to
determine the net asset value per share, which is calculated separately
for each class of shares. (For funds with preferred shares, the amount
subtracted from total assets includes the net assets allocated to
remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss for
the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that remain
in the portfolio -- any change in unrealized gains or losses over the
period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number of
the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed here
may not match the sources listed in the Statement of operations because
the distributions are determined on a tax basis and may be paid in a
different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results,
per-share distributions, expense ratios, net investment income ratios and
portfolio turnover in one summary table, reflecting the five most recent
reporting periods. In a semiannual report, the highlight table also
includes the current reporting period. For open-ended funds, a separate
table is provided for each share class.
Report of independent accountants
For the fiscal year ended August 31, 1999
To the Board of Trustees of Putnam Investment Funds and
Shareholders of Putnam International Voyager Fund
(a series of Putnam Investment Funds)
In our opinion, the accompanying statement of assets and liabilities,
including the fund's portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Putnam International
Voyager Fund (the "fund") at August 31, 1999, and the results of its
operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the
fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of investments owned at August 31, 1999 by correspondence
with the custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 11, 1999
<TABLE>
<CAPTION>
The fund's portfolio
August 31, 1999
COMMON STOCKS (96.7%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Australia (2.2%)
- --------------------------------------------------------------------------------------------------------------------------
691,180 Data Advantage Ltd. (NON) $ 1,698,113
287,507 Macquarie Bank Ltd. 3,844,492
904,605 QBE Insurance Group Ltd. 3,241,091
--------------
8,783,696
Austria (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
6,513 Austria Technologie & Systemtechnik AG (NON) 199,756
45,880 Austria Technologie & Systemtechnik AG 144A (NON) 1,407,158
--------------
1,606,914
Canada (2.0%)
- --------------------------------------------------------------------------------------------------------------------------
365,612 Abitibi-Consolidated, Inc. (NON) 4,358,937
81,469 Four Seasons Hotels, Inc. (NON) 3,645,097
--------------
8,004,034
China (0.1%)
- --------------------------------------------------------------------------------------------------------------------------
242,000 Shandong International Power Development Co. Ltd. (NON) 48,308
2,538,000 Shandong International Power Development Co. Ltd. 144A (NON) 506,633
--------------
554,941
Denmark (1.6%)
- --------------------------------------------------------------------------------------------------------------------------
42,466 Vestas Wind Systems A/S (NON) 5,380,800
9,070 Vestas Wind Systems A/S 144A (NON) 1,149,245
--------------
6,530,045
Finland (2.0%)
- --------------------------------------------------------------------------------------------------------------------------
246,536 Perlos Oyj (NON) 3,519,942
102,000 Perlos Oyj 144A (NON) 1,456,337
92,717 Sampo Insurance Co., Ltd. Class A 3,039,782
--------------
8,016,061
France (8.6%)
- --------------------------------------------------------------------------------------------------------------------------
19,005 Bouygues S.A. 5,246,019
67,006 Chargeurs S.A. 4,003,903
82,377 CNP Assurances 2,173,692
15,600 CNP Assurances 144A 411,639
26,053 Havas Advertising SA 6,172,018
35,755 ISIS Holdings 2,722,643
14,417 NRJ S.A. 3,859,122
25,086 Publicis S.A. 5,200,067
24,253 Sidel S.A. 2,685,552
11,543 Societe Television Francaise 1 2,881,059
--------------
35,355,714
Germany (4.2%)
- --------------------------------------------------------------------------------------------------------------------------
96,245 EM TV & Merchandising AG 5,720,526
64,173 Intershop Communications AG (NON) 5,755,322
14,390 Stinnes AG (NON) 227,522
199,325 Stinnes AG 144A (NON) 3,151,551
63,089 Zapf Creaton AG (NON) 2,151,814
--------------
17,006,735
Hong Kong (2.6%)
- --------------------------------------------------------------------------------------------------------------------------
2,679,000 Cathay Pacific Airways 4,554,245
895,000 Johnson Electric Holdings Ltd. 4,034,231
657,000 Li & Fung Ltd. 2,106,854
--------------
10,695,330
Indonesia (--%)
- --------------------------------------------------------------------------------------------------------------------------
175,400 PT Telekomunikasi Indonesia 67,638
Ireland (3.7%)
- --------------------------------------------------------------------------------------------------------------------------
209,811 Esat Telecom Group PLC (NON) 8,549,798
759,990 Independent News & Media PLC 3,713,396
295,419 Irish Life & Permanent PLC 3,061,864
--------------
15,325,058
Italy (7.0%)
- --------------------------------------------------------------------------------------------------------------------------
36,786 ACEA SpA (NON) 434,567
381,377 ACEA SpA 144A (NON) 4,505,356
144,671 Banca Popolare Commercio de Industria SpA 3,483,902
181,079 Banca Popolare di Brescia SpA (REL) 7,938,054
224,433 Banca Populare Santa Venera 2,639,447
2,792,486 CIR-Compagnie Industriali Riunite SpA 4,158,293
209,991 Class Editori 1,619,010
21,101 Ericsson SpA 680,651
672,225 Unicem SpA 2,993,079
--------------
28,452,359
Japan (18.8%)
- --------------------------------------------------------------------------------------------------------------------------
44,920 Aiful Corp. 7,799,865
38,800 Benesse Corp. 6,733,650
18,000 C TWO-NETWORK Co., Ltd. 4,274,753
44,100 Disco Corp. 4,471,228
409,000 Futaba Industrial Co., Ltd. 5,902,631
12,000 Internet Initiative ADR 619,500
41,300 KDD Corp. 3,225,384
54,700 Kita Kyushu Coca-Cola Bottling 2,578,115
141,000 Mitsumi Electric Company, Ltd. 4,237,212
741,000 Nikko Securities Co. Ltd. 6,416,405
42,000 Nippon Broadcasting System 2,604,859
84,000 Promise Co., Ltd. 6,982,097
508 Round One Corp. 6,681,768
66,700 Sundrug Co. Ltd. 3,655,462
48,000 Taiyo Ink Manufacturing 5,392,766
3,400 Trans Cosmos, Inc. 346,273
60,000 Tsuruha Co., Ltd. 4,987,212
--------------
76,909,180
Mexico (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
62,948 Fomento Economico Mexicano, S.A. de C.V. ADR (NON) 2,081,218
400,947 TV Azteca, S.A. de C.V. 2,029,794
--------------
4,111,012
Netherlands (3.0%)
- --------------------------------------------------------------------------------------------------------------------------
64,462 Beter Bed Holding N.V. 1,942,988
78,230 Hunter Douglas N.V. ADR 2,461,397
305,856 Ispat International N.V. (NON) 3,173,256
353,734 Versatel Telecom International N.V. (NON) 4,863,418
--------------
12,441,059
New Zealand (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
122,491 Fletcher Challenge Building 169,850
1,253,310 Restaurant Brands New Zealand Ltd. 894,878
--------------
1,064,728
Portugal (1.0%)
- --------------------------------------------------------------------------------------------------------------------------
82,242 Brisa-Auto Estradas de Portugal, S.A. 3,187,785
58,286 Semapa -- Sociedade de Investimento e Gestao SGPS, S.A. 989,375
--------------
4,177,160
Singapore (4.2%)
- --------------------------------------------------------------------------------------------------------------------------
792,000 Allgreen Real Estate 144A 766,693
3,625,500 Courts Ltd. 2,196,229
501,000 JIT Holdings Ltd. 1,112,804
1,961,800 Keppel Bank 4,171,068
187,200 Keppel Land Ltd. 287,949
986,100 Overseas Union Bank Ltd. 5,153,629
381,000 Venture Manufacturing Ltd. 3,643,010
--------------
17,331,382
South Korea (0.8%)
- --------------------------------------------------------------------------------------------------------------------------
132,300 Kookmin Bank 144A GDR 1,849,963
100,200 Shinhan Bank GDR 1,078,424
24,100 Shinhan Bank 144A GDR 512,125
--------------
3,440,512
Spain (4.5%)
- --------------------------------------------------------------------------------------------------------------------------
72,244 Acciona S.A. 3,727,812
85,761 Cementos Portland, S.A. 2,851,634
146,665 CF Alba Spain S.A. 4,319,894
144,890 Inmobiliaria Metropolitana Vasco Central S.A. 3,118,346
30,420 Mapfre Vida Seguros S.A. 849,345
32,990 TPI Paginas Amarillas S.A. (NON) 757,118
50,662 TPI Paginas Amarillas 144A S.A. (NON) 1,162,679
167,340 Transportes Akzar S.A. 1,760,929
--------------
18,547,757
Sweden (1.5%)
- --------------------------------------------------------------------------------------------------------------------------
11,786 Framtidsfabriken AB (NON) 483,496
26,500 Framtidsfabriken AB 144A (NON) 1,087,107
164,453 Modern Times Group MTG AB (NON) 4,590,704
--------------
6,161,307
Switzerland (9.1%)
- --------------------------------------------------------------------------------------------------------------------------
3,893 Ares-Serono Group Class B 5,890,301
1,020 Bank Sarasin & Cie AG 1,816,254
8,213 Edipresse S.A. 2,957,440
1,503 Julius Baer Holdings AG 4,637,602
4,789 Kuehne & Nagel Intl. AG 3,306,577
2,005 Lindt & Spuengli AG 5,199,620
10,404 Publicitas Holding S.A. 7,802,141
7,973 Sika Finanz AG 2,404,806
798 Verwaltungs-und Privat-Bank AG 3,429,792
--------------
37,444,533
Taiwan (1.7%)
- --------------------------------------------------------------------------------------------------------------------------
42,300 Ase Test Limited 972,900
310,300 Winbond Electronics Corp. GDR 5,895,700
--------------
6,868,600
United Kingdom (16.4%)
- --------------------------------------------------------------------------------------------------------------------------
2,187,884 Aegis Group PLC 4,919,238
238,100 Aegis Group PLC 144A 535,344
431,277 ARM Holdings PLC (NON) 6,109,004
75,365 Canary Wharf Finance 144A PLC (NON) 472,041
490,820 Canary Wharf Finance PLC (NON) 3,074,202
320,711 Carpetright PLC 2,343,531
438,627 D.F.S. Furniture Co. PLC 2,275,325
58,561 eXchange Holdings (The) PLC (NON) 182,455
1,806,900 eXchange Holdings (The) PLC 144A (NON) 5,629,650
114,609 Flextech PLC (NON) 1,693,371
513,600 Freeserve PLC (NON) 1,509,460
134,233 Future Network PLC (NON) 1,013,218
140,600 Future Network PLC 144A (NON) 1,061,277
97,633 Hit Entertainment PLC 1,301,428
402,628 Independent Insurance Group, Inc. 1,842,869
1,072,000 Kingston Comunication (Hull) 144A PLC 6,197,875
56,700 Matalan 144A 801,330
78,144 Matalan PLC 1,104,393
1,126,384 Pace Micro Technology PLC 3,907,381
717,692 Premier Farnell PLC 3,273,422
1,074,278 Saatchi & Saatchi PLC 3,976,795
514,760 Securicor Group PLC 4,856,889
355,775 Smith (W.H.) Group PLC 3,273,977
317,632 Trinity PLC 2,759,733
338,463 Viridian Group PLC 3,239,524
--------------
67,353,732
--------------
Total Common Stocks (cost $308,772,982) $ 396,249,487
SHORT-TERM INVESTMENTS (1.5%) (a) (cost $5,941,000)
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
$ 5,941,000 Interest in $452,313,000 joint repurchase agreement
dated August 31, 1999 with Morgan (J.P.) & Co., Inc.
due September 1, 1999 with respect to various U.S.
Treasury obligations -- maturity value of $5,941,891
for an effective yield of 5.40% $ 5,941,000
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $314,713,982) (b) $ 402,190,487
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $409,670,679.
(b) The aggregate identified cost on a tax basis is $321,740,673, resulting in gross unrealized appreciation and
depreciation of $89,352,385 and $8,902,571, respectively, or net unrealized appreciation of $80,449,814.
(NON) Non-income-producing security.
(REL) Banca Popolare di Brescia is involved in a joint venture with Putnam Investments.
144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional
buyers.
ADR or GDR after the name of a foreign holding stands for American Depositary Receipts or Global Depositary Receipts,
respectively, representing ownership of foreign securities on deposit with a domestic custodian bank.
The fund had the following industry group concentration greater than 10% at August 31, 1999 (as a percentage of net
assets):
Insurance and finance 19.7%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
August 31, 1999
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value (identified cost $314,713,982) (Note 1) $402,190,487
- -----------------------------------------------------------------------------------------------
Cash 831
- -----------------------------------------------------------------------------------------------
Foreign currency 991,248
- -----------------------------------------------------------------------------------------------
Dividends, interest and other receivables 342,608
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 5,639,628
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 4,484,858
- -----------------------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 1,027
- -----------------------------------------------------------------------------------------------
Total assets 413,650,687
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 2,217,775
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 362,072
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 920,321
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 162,939
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 7,355
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,226
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 240,820
- -----------------------------------------------------------------------------------------------
Payable for organization expenses (Note 1) 50
- -----------------------------------------------------------------------------------------------
Other accrued expenses 67,450
- -----------------------------------------------------------------------------------------------
Total liabilities 3,980,008
- -----------------------------------------------------------------------------------------------
Net assets $409,670,679
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $310,995,937
- -----------------------------------------------------------------------------------------------
Distributions in excess of net investment income (Note 1) (1,862,835)
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign
currency transactions (Note 1) 12,738,284
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets and
liabilities in foreign currencies 87,799,293
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $409,670,679
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($216,735,166 divided by 12,542,716 shares) $17.28
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $17.28)* $18.33
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($171,523,850 divided by 10,048,413 shares)** $17.07
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($2,710,729 divided by156,983 shares)** $17.27
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($18,700,934 divided by 1,090,229 shares) $17.15
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $17.15)* $17.77
- -----------------------------------------------------------------------------------------------
* 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
Year ended August 31, 1999
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $505,233) $ 3,813,017
- -----------------------------------------------------------------------------------------------
Interest 459,644
- -----------------------------------------------------------------------------------------------
Total investment income 4,272,661
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 2,905,440
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 712,790
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 18,475
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 7,240
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 339,178
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 1,051,190
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 1,221
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 90,247
- -----------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 1,997
- -----------------------------------------------------------------------------------------------
Reports to shareholders 44,718
- -----------------------------------------------------------------------------------------------
Registration fees 43,218
- -----------------------------------------------------------------------------------------------
Auditing 34,620
- -----------------------------------------------------------------------------------------------
Legal 5,029
- -----------------------------------------------------------------------------------------------
Postage 54,454
- -----------------------------------------------------------------------------------------------
Other 38,085
- -----------------------------------------------------------------------------------------------
Total expenses 5,347,902
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (27,868)
- -----------------------------------------------------------------------------------------------
Net expenses 5,320,034
- -----------------------------------------------------------------------------------------------
Net investment loss (1,047,373)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 14,339,164
- -----------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (653,327)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the year 408,462
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 85,256,072
- -----------------------------------------------------------------------------------------------
Net gain on investments 99,350,371
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $98,302,998
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended August 31
-------------------------------
1999 1998
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (1,047,373) $ (7,875)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 13,685,837 3,792,073
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
asset and liabilities in foreign currencies 85,664,534 937,264
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 98,302,998 4,721,462
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income
Class A (436,394) (159,691)
- ---------------------------------------------------------------------------------------------------------------
Class B (152,883) --
- ---------------------------------------------------------------------------------------------------------------
Class M (24,395) (432)
- ---------------------------------------------------------------------------------------------------------------
In excess of net investment income
Class A (634,481) --
- ---------------------------------------------------------------------------------------------------------------
Class B (222,278) --
- ---------------------------------------------------------------------------------------------------------------
Class M (35,469) --
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (2,149,683) (2,453,405)
- ---------------------------------------------------------------------------------------------------------------
Class B (1,752,907) (2,132,632)
- ---------------------------------------------------------------------------------------------------------------
Class M (197,843) (237,711)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 139,594,386 98,406,679
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 232,291,051 98,144,270
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 177,379,628 79,235,358
- ---------------------------------------------------------------------------------------------------------------
End of year (including distributions
in excess of net investment income
of $1,862,835 and $131,777, respectively) $409,670,679 $177,379,628
- ---------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share Dec. 28, 1995+
operating performance Year ended August 31 to August 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $12.37 $11.66 $9.47 $8.50
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (a) (.01) .05 .02(d) .04(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 5.33 1.25 2.28 .93
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.32 1.30 2.30 .97
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.06) (.04) (.07) --
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income (.08) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.27) (.55) (.04) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.41) (.59) (.11) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.28 $12.37 $11.66 $9.47
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 43.98 11.77 24.44 11.41*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $216,735 $95,404 $40,687 $2,429
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.78 1.92 2.10(d) 1.26*(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.07) .35 .15(d) .44*(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 106.76 89.50 126.65 55.87*
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets includes amounts paid through expense offset and brokerage service arrangements
(Note 2).
(d) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses 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.
(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
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share Oct. 30, 1996+
operating performance Year ended August 31 to August 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $12.25 $11.60 $9.82
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (a) (.12) (.05) (.06)(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 5.27 1.25 1.94
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.15 1.20 1.88
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.02) -- (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income (.04) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.27) (.55) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.33) (.55) (.10)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.07 $12.25 $11.60
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 42.84 10.94 19.35*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $171,524 $73,176 $34,463
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 2.53 2.67 2.39*(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.83) (.43) (.50)*(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 106.76 89.50 126.65
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets includes amounts paid through expense offset and brokerage service arrangements
(Note 2).
(d) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses 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.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share July 26, 1999+
operating performance to August 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $16.21
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (a) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.07
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 1.06
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.27
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 6.54*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,711
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .26*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.14)*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 106.76
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets includes amounts paid through expense offset and brokerage service arrangements
(Note 2).
(d) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses 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.
(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
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share Oct. 30, 1996+
operating performance Year ended August 31 to August 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $12.30 $11.62 $9.82
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (a) (.08) (.02) (.03)(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 5.28 1.25 1.93
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 5.20 1.23 1.90
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.03) --(e) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income (.05) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.27) (.55) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.35) (.55) (.10)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.15 $12.30 $11.62
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 43.17 11.20 19.56*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $18,701 $8,799 $4,086
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 2.28 2.42 2.18*(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (%) (.58) (.18) (.26)*(d)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 106.76 89.50 126.65
- ------------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding
during the period.
(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) The ratio of expenses to average net assets includes amounts paid through expense offset and brokerage service arrangements
(Note 2).
(d) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses 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.
(e) Distributions from net investment income amounted to less than $0.01 per share for class M.
</TABLE>
Notes to financial statements
August 31, 1999
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 outside of the United States.
The fund offers class A, class B, class C, and class M shares. The fund
began offering class C shares on July 26, 1999. Class A shares are sold
with a maximum front-end sales charge of 5.75%. Class B shares, which
convert to class A shares after approximately eight years, do not pay a
front-end sales charge, but pay a higher ongoing distribution fee than
class A shares, and are subject to a contingent deferred sales charge, if
those shares are redeemed within six years of purchase. Class C shares are
subject to the same fees and expenses as class B shares, except that class
C shares have a one-year 1.00% contingent deferred sales charge and do not
convert to class A shares. Class M shares are sold with a maximum
front-end sales charge of 3.50% and pay an ongoing distribution fee that
is higher than class A but lower than class B shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
votes as a class only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by the
Trustees. Shares of each class would receive their pro-rata share of the
net assets of the fund, if the fund were liquidated. In addition, the
Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price, or if no sales are reported -- as in the case of some
securities traded over-the-counter -- the last reported bid price.
Short-term investments having remaining maturities of 60 days or less are
stated at amortized cost, which approximates market value following
procedures approved by the Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Investment Management, Inc. ("Putnam Management"), the fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the market
value of which at the time of purchase is required to be in an amount at
least equal to the resale price, including accrued interest. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. Putnam Management is responsible for determining that the
value of these underlying securities is at all times at least equal to the
resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date except that
certain dividends from foreign securities are recorded as soon as the fund
is informed of the ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The fund
does not isolate that portion of realized or unrealized gains or losses
resulting from changes in the foreign exchange rate on investments from
fluctuations arising from changes in the market prices of the securities.
Such gains and losses are included with the net realized and unrealized
gain or loss on investments. Net realized gains and losses on foreign
currency transactions represent net realized exchange gains or losses on
closed forward currency contracts, disposition of foreign currencies and
the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized appreciation
and depreciation of assets and liabilities in foreign currencies arise
from changes in the value of open forward currency contracts and assets
and liabilities other than investments at the period end, resulting from
changes in the exchange rate.
F) 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 year ended
August 31, 1999, the fund had no borrowings against the line of credit.
G) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies. It is also the intention of the fund to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the
Internal Revenue Code of 1986, 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.
H) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid 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. These
differences include temporary and permanent differences of losses on wash
sale transactions, foreign currency gains and losses, post-October loss
deferrals, organization costs, foreign taxes, realized and unrealized
gains and losses on passive foreign investment companies.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations. For the year ended August 31,
1999, the fund reclassified $822,215 to decrease distributions in excess
of net investment income and $1,776 to decrease paid-in-capital, with a
decrease to accumulated net realized gains of $820,439. The calculation of
net investment income per share in the financial highlights table excludes
these adjustments.
I) Expenses of the trust Expenses directly charged or attributable to any
fund will be paid from the assets of that fund. Generally, expenses of the
trust will be allocated among and charged to the assets of each fund on a
basis that the Trustees deem fair and equitable, which may be based on the
relative assets of each fund or the nature of the services performed and
relative applicability to each fund.
J) Unamortized organization expenses 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: 1.00% of the first $500
million of average net assets, 0.90% of the next $500 million, 0.85% of
the next $500 million, 0.80% of the next $5 billion, 0.775% of the next $5
billion, 0.755% of the next $5 billion, 0.74% of the next $5 billion and
0.73% thereafter. Prior to July 1, 1999, the fee was 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.
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the year ended August 31, 1999, fund expenses were reduced by $27,868
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 $770 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
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension Plan
are equal to 50% of the Trustee's average total retainer and meeting fees
for the three years preceding retirement. Pension expense for the fund is
included in Compensation of Trustees in the Statement of operations.
Accrued pension liability is included in Payable for compensation of
Trustees in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B, class C and class M shares pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the Plans is to
compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam
Investments Inc., for services provided and expenses incurred by it in
distributing shares of the fund. The Plans provide for payments by the
fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00%,
1.00% and 1.00% of the average net assets attributable to class A, class
B, class C and class M shares, respectively. The Trustees have approved
payment by the fund to an annual rate of 0.25%, 1.00%, 1.00%, and 0.75% of
the average net assets attributable to class A, class B, class C and class
M shares, respectively.
For the year ended August 31, 1999, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $203,043 and $19,076 from the sale
of class A and class M shares, respectively and received $185,854 and no
monies in contingent deferred sales charges from redemptions of class B
and class C shares, respectively. A deferred sales charge of up to 1% is
assessed on certain redemptions of class A shares. For the year ended
August 31, 1999, Putnam Mutual Funds Corp., acting as underwriter received
$14,230 on class A redemptions.
Note 3
Purchase and sales of securities
During the year ended August 31, 1999, purchases and sales of investment
securities other than short-term investments aggregated $393,390,070 and
$264,197,125 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 August 31, 1999, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended August 31, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 12,064,985 $177,319,379
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 231,682 3,062,832
- -----------------------------------------------------------------------------
12,296,667 180,382,211
Shares
repurchased (7,464,939) (109,402,485)
- -----------------------------------------------------------------------------
Net increase 4,831,728 $ 70,979,726
- -----------------------------------------------------------------------------
Year ended August 31, 1998
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 6,331,000 $ 82,848,055
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 224,603 2,461,648
- -----------------------------------------------------------------------------
6,555,603 85,309,703
Shares
repurchased (2,333,574) (30,360,221)
- -----------------------------------------------------------------------------
Net increase 4,222,029 $ 54,949,482
- -----------------------------------------------------------------------------
Year ended August 31, 1999
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 6,320,324 $ 92,834,075
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 148,012 1,943,391
- -----------------------------------------------------------------------------
6,468,336 94,777,466
Shares
repurchased (2,393,661) (34,320,799)
- -----------------------------------------------------------------------------
Net increase 4,074,675 $ 60,456,667
- -----------------------------------------------------------------------------
Year ended August 31, 1998
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 4,028,457 $51,974,706
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 180,293 1,967,001
- -----------------------------------------------------------------------------
4,208,750 53,941,707
Shares
repurchased (1,205,658) (15,283,453)
- -----------------------------------------------------------------------------
Net increase 3,003,092 $38,658,254
- -----------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations)
to August 31, 1999
- -----------------------------------------------------------------------------
Class C Shares Amount
- -----------------------------------------------------------------------------
Shares sold 156,983 $ 2,627,586
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
156,983 2,627,586
Shares
repurchased -- --
- -----------------------------------------------------------------------------
Net increase 156,983 $ 2,627,586
- -----------------------------------------------------------------------------
Year ended August 31, 1999
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 973,859 $14,189,696
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 18,823 248,090
- -----------------------------------------------------------------------------
992,682 14,437,786
Shares
repurchased (617,690) (8,907,379)
- -----------------------------------------------------------------------------
Net increase 374,992 $ 5,530,407
- -----------------------------------------------------------------------------
Year ended August 31, 1998
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 482,034 $ 6,367,558
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 21,553 235,566
- -----------------------------------------------------------------------------
503,587 6,603,124
Shares
repurchased (139,901) (1,804,181)
- -----------------------------------------------------------------------------
Net increase 363,686 $ 4,798,943
- -----------------------------------------------------------------------------
Federal tax information
(Unaudited)
Pursuant to Section 852 of the Internal Revenue Code, as amended, the Fund
hereby designates $2,346,607 as a 20% capital gain, for its taxable year
ended August 31, 1999.
For the period, interest and dividends from foreign countries were
$4,318,250. Taxes paid to foreign countries were $505,077.
The Form 1099 you receive in January 2000 will show the tax status of all
distributions paid to your account in calendar 1999.
Welcome to www.putnaminv.com
Now you can use your PC to get up-to-date information about your funds, learn
more about investing and retirement planning, and access market news and
economic outlooks from Putnam.
VISIT PUTNAM'S SITE ON THE WORLD WIDE WEB FOR:
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You can also read Putnam economist Dr. Robert Goodman's commentary and
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The site can be accessed through any of the major online services (America
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access it via Netscape or Microsoft Internet Explorer, using an independent
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New features will be added to the site regularly. So be sure to bookmark us
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Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Justin M. Scott
Vice President
Joseph Joseph
Vice President and Fund Manager
Joshua Byrne
Vice President and Fund Manager
Nigel Hart
Vice President and Fund Manager
Omid Kamshad
Vice President and Fund Manager
Richard A. Monaghan
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam
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' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
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PUTNAM
INVESTMENTS
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For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
AN011-55016 2AZ/2CI/2CJ 10/99
