-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, cD16nJ5KHbuDdA7hKO5G/iOuX4iemjncXGVAOy3DwNvSm7T+JRRU15m9O7GEL5OS Rjq+H4SC/SeWEEYBFCR29Q== 0000914120-95-000011.txt : 199506280000914120-95-000011.hdr.sgml : 19950628 ACCESSION NUMBER: 0000914120-95-000011 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950627 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM GLOBAL GROWTH FUND CENTRAL INDEX KEY: 0000081251 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046145734 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01403 FILM NUMBER: 95549350 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ STREET 2: MAILSTOP A14 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921000 MAIL ADDRESS: ZIP: ----- FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM INTERNATIONAL EQUITIES FUND DATE OF NAME CHANGE: 19900722 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM INTERNATIONAL EQUITIES FUND INC /PRED/ DATE OF NAME CHANGE: 19821109 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM EQUITIES FUND INC DATE OF NAME CHANGE: 19790906 N-30D 1 PUTNAM GLOBAL GROWTH FUND PUTNAM GLOBAL GROWTH FUND [Artwork] SEMIANNUAL REPORT April 30, 1995 [Putnam Logo] Boston * London * Tokyo PERFORMANCE HIGHLIGHTS "Opportunities abound in markets around the world, and we believe Putnam Global Growth Fund is well positioned to pursue such diverse possibilities. In markets from Europe to Asia, the fund is supported by Putnam's long-time commitment to intensive research, on-site visits, and investment expertise." -- Anthony Regan, fund manager SEMIANNUAL RESULTS AT A GLANCE - ------------------------------------------------------------------------------- CLASS A CLASS B TOTAL RETURN: NAV POP NAV CDSC - ------------------------------------------------------------------------------- (change in value during period plus reinvested distributions) 6 months ended 4/30/95 -2.71% -8.34% -3.07% -7.75% - ------------------------------------------------------------------------------- CLASS M (1) SHARE VALUE: NAV POP NAV NAV POP - ------------------------------------------------------------------------------- 10/31/94 $9.92 $10.53 $9.74 -- -- 3/1/95 -- -- -- $8.86 $9.18 4/30/95 9.33 9.90 9.12 9.33 9.67 - ------------------------------------------------------------------------------- CAPITAL GAINS DISTRIBUTIONS: NO. INCOME LONG-TERM SHORT-TERM TOTAL - ------------------------------------------------------------------------------- Class A 1 -- $0.272 $0.041 $0.313 Class B 1 -- $0.272 0.041 0.313 - ------------------------------------------------------------------------------ Performance data represent past results and will differ for each share class. For performance over longer periods, see pages 8 and 9. (1) Class M shares were introduced on 3/1/95; total return is not shown because of the brevity of the reporting period. POP assumes 5.75% maximum sales charge for class A shares and 3.50% for class M shares. CDSC assumes 5% maximum contingent deferred sales charge. FROM THE CHAIRMAN [Photograph of George Putnam] * (C) Karsh, Ottawa DEAR SHAREHOLDER: WHEN PUTNAM GLOBAL GROWTH FUND BEGAN FISCAL 1995 LAST FALL, INTERNATIONAL INVES- TORS WERE WORRIED THAT EUROPE'S ECONOMIC GROWTH RATE WAS TOO RAPID TO BE SUS- TAINABLE AND CONFIDENT THAT JAPAN'S ECONOMY WAS POISED TO IMPROVE. SIX MONTHS LATER, EXPECTATIONS FOR A STRONGER JAPANESE ECONOMY HAVE BEEN DAM- PENED IN THE WAKE OF THE KOBE EARTHQUAKE. MEANWHILE, EUROPE'S ECONOMIC RECOVERY HAS CONTINUED AND MAY INDEED HAVE PEAKED. IN ANY CASE, CONDITIONS IN FOREIGN MARKETS CAN CHANGE RAPIDLY; INVESTORS SHOULD BE PREPARED FOR FLUCTUATIONS. EXTREME VOLATILITY IN THE CURRENCY MARKETS CHARACTERIZED THE INTERNATIONAL IN- VESTING ENVIRONMENT THROUGHOUT THE SEMIANNUAL PERIOD. THE DOLLAR'S STEEP DECLI- NE, BEGINNING IN FEBRUARY, CONTRIBUTED TO THE DIFFICULTY OF MAKING GLOBAL IN- VESTMENT DECISIONS, AND CONTINUES TO BE A FACTOR IN CERTAIN WORLD MARKETS. DESPITE THE UNCERTAINTIES, FUND MANAGERS ANTHONY REGAN AND GERALD ZUKOWSKI BE- LIEVE THE OVERALL ENVIRONMENT FOR INTERNATIONAL EQUITY INVESTING REMAINS POSITI- VE. THEY DISCUSS THE FUND'S PERFORMANCE AND PROSPECTS IN THE REPORT THAT FO- LLOWS. RESPECTFULLY YOURS, GEORGE PUTNAM CHAIRMAN OF THE TRUSTEES JUNE 21, 1995 * (C) Copyright REPORT FROM THE FUND MANAGERS ANTHONY W. REGAN GERALD ZUKOWSKI Over the six months ended April 30, 1995, events including the Mexican liquidity crunch, the collapse of Barings Bank, the Kobe earthquake, and the falling U.S. dollar have shaken international financial markets. Thus, despite strong corpo- rate earnings in many countries, the performance of most global funds has been disappointing over this period -- Putnam Global Growth Fund among them. Your fund's semiannual returns were closely in line with those of 123 global funds tracked by Lipper Analytical Services, which slipped an average of -2.47% over the period. However, your fund's performance over a longer span is more competitive, as the results on pages 8 and 9 of this report show. Because time tends to smooth out fluctuations in the global economy, a longer-term perspec- tive is particularly important when evaluating international investments. JAPAN SLUMPS UNDER YEN'S WEIGHT There are two central reasons for your fund's difficulties during the period: Japan's continuing economic stagnation and the U.S. dollar's decline. In late 1994, we anticipated that the dollar would strengthen against the yen, and moved to protect the portfolio's large Japanese holdings with defensive hedges. Ins- tead, the reverse happened -- the yen soared to record highs against the dollar. This stifled the Japanese stock market, which was already struggling after the devastating Kobe earthquake, and cut into the fund's returns. We have since trimmed the fund's weighting in Japan to around 19% of net assets. However, despite Japan's recent troubles, we believe it prudent to remain in- vested there. Japan boasts the world's second largest economy and many interna- tionally competitive companies. In any case, we are guardedly optimistic about conditions there over the coming months. We consider it a distinct possibility that the Japanese government, energized by crisis, may cut interest rates, in- crease public-sector spending, and reduce taxes. We believe that such moves, if implemented, should stimulate the economy and weaken the overvalued yen. We have added to the fund's holdings elsewhere in the region. Southeast Asia now represents around 11% of the fund's net assets. The fundamental economic strength of Hong Kong, Singapore, and Thailand cannot be overlooked. Each has been remarkably successful in developing domestic industries, technological pro- wess, and financial sophistication. Furthermore, in the coming months, poten- tially lower interest rates in the United States could stimulate Asian markets, which are particularly sensitive to the direction of U.S. economic policy. EUROPE: SUPPORTED BY CORPORATE RESTRUCTURING We are acknowledging fundamental European economic health by keeping approxima- tely 38% of the fund's net assets invested on the Continent. Many Western Euro- pean corporations, once languishing under slow growth, are today reaping the re- wards of reorganization. Widespread corporate restructuring has helped to bols- ter profits in the United Kingdom, France, Ireland, and the Netherlands. Many airlines, financial services firms, and industrial producers are enjoying grow- ing profits and strong balance sheets. One major exception is Germany, which, like Japan, has an export-driven economy struggling with an overpriced currency. [Bar Chart - Page 5] PORTFOLIO ALLOCATION * 4/30/95 10/31/94 Europe 38.30 37.10 Japan 19.70 23.50 US 31.00 26.70 Asia (ex Japan) 10.80 9.80 Latin America 0.60 1.10 * Based on net assets as of the indicated date. Will vary over time. Germany's current difficulties may ultimately benefit Europe overall. Germany's interest rate reduction in March was meant to relieve the overvalued deutsche- mark, and could be a precursor to further fiscal loosening. Such a move could take pressure off other European Union member economies whose rates are closely tied to Germany's. In turn, widespread easing of interest rates might help to spark European demand and relieve the unemployment still vexing otherwise vigo- rous economies such as France's. We are particularly upbeat about several European companies in the fund's port- folio. KLM, the Dutch airline, has steadily expanded profits while trimming costs. Michelin, the French tire manufacturer, has also improved profit margins; the firm is expanding its market share even as world demand for tires grows. Union Bank of Switzerland may be poised for strong performance in the months ahead, with its healthy balance sheet and the prospect of lower Swiss interest rates. U.S. STOCKS ENJOY A BROAD, SUSTAINED RALLY In November, shortly after our last report to you, the U.S. stock market appea- red stalled. As of this writing, the American market is in the midst of a pro- foundly strong rally. 1994's robust GDP growth appears to have slowed to a level deemed acceptable by the Federal Reserve Board, whose inflation-fighting inte- rest rate increases can stifle the domestic economy. The improving outlook for interest rates, coupled with strong corporate earnings, have helped fuel the exuberant market. While such dramatic increases in prices are unlikely to continue, we believe the U.S. market remains attractive; accordingly, we have added to the fund's domes- tic holdings. They now account for around 31% of the fund's net assets, up from 25% at the start of the current fiscal year. We are emphasizing large-capitali- zation stocks, which currently lead the market and may continue to do well even in a slowing economy. We have also purchased shares of financial companies, such as Chemical Bank, which could benefit from the thriving bond market and a posi- tive interest rate outlook. One company in the fund's portfolio, IBM, embodies many of the positive changes we have seen in the United States. After years of declining earnings, IBM recen- tly embarked on a massive NET CHANGE IN STOCK MARKETS LOCAL 6 MONTHS ENDED 4/30/95 CURRENCY U.S. $ - ------------------------------------------------------- U.K. 4.82% 3.46% France 3.07 8.43 Netherlands 0.92 10.12 Spain -2.61 -0.75 Germany -2.47 6.38 Switzerland 3.74 14.28 Japan -14.55 -1.40 Australia 2.65 0.66 Hong Kong -13.47 -13.63 Singapore -10.46 -5.53 Malaysia -14.63 -11.61 United States N/A 10.54 World Index N/A 4.56 World Index (ex U.S.) N/A 1.21 Source: MSCI country indexes. Will vary over time. restructuring process. Today, many of its core products are selling well, recent quarterly earnings have been robust, and the company's stock price has responded accordingly. THE OUTLOOK: WATCH JAPAN The fluctuations of the past six months serve as a reminder that global inves- ting poses unique challenges. But foreign markets can also give investors access to vast possibilities. Companies from Asia to the United States are tra- ding widely, emphasizing competitiveness, and striving to innovate. Around the world, opportunities abound for the patient investor. In the months ahead, we will closely monitor Japan's progress and the direction of the yen, both of which will affect the performance of your fund. In certain southeast Asian countries, we envision increasing economic vigor. Corporate earnings in Europe may continue to accelerate. And we believe the U.S. market still has room left to grow. In short, we are cautiously optimistic that the coming months will bring a more positive environment for global equities. The views expressed here are exclusively those of Putnam Management. They are not meant as investment advice. Although the described holdings were viewed fa- vorably as of 4/30/95, there is no guarantee the fund will continue to hold these securities in the future. International investing involves certain risks, such as currency fluctuations and political instability. PERFORMANCE SUMMARY This section provides, at a glance, information about your fund's performance. Total return shows how the value of the fund's shares changed over time, assum- ing you held the shares through the entire period and reinvested all distribu- tions back into the fund. We show total return in two ways: on a cumulative long-term basis and on average how the fund might have grown each year over va- rying periods. Performance should always be considered in light of a fund's investment strate- gy. Putnam Global Growth Fund is designed for investors seeking capital appre- ciation through a globally diversified equity portfolio. TOTAL RETURN FOR PERIODS ENDED 4/30/95 MORGAN STANLEY CAPITAL S&P CLASS A CLASS B INTERNATIONAL 500 NAV POP NAV CDSC EAFE WORLD INDEX - ------------------------------------------------------------------------------- 6 months -2.71% -8.34% -3.07% -7.75% 1.24% 4.56% 10.46% - ------------------------------------------------------------------------------- 1 year 1.17 -4.63 0.44 -4.41 5.59 9.74 17.44 - ------------------------------------------------------------------------------- 5 years 49.62 40.95 -- -- 43.03 53.66 80.85 Annual average 8.39 7.11 -- -- 7.42 8.97 12.58 - ------------------------------------------------------------------------------- 10 years 319.05 294.85 -- -- 387.66 296.32 296.60 Annual average 15.41 14.72 -- -- 17.17 14.77 14.77 - ------------------------------------------------------------------------------- Life of class B -- -- 29.37 26.37 49.78 41.95 34.91 Annual average -- -- 8.93 8.08 14.43 12.39 10.50 - ------------------------------------------------------------------------------- TOTAL RETURN FOR PERIODS ENDED 3/31/95 (most recent calendar quarter) CLASS A CLASS B NAV POP NAV CDSC - ------------------------------------------------------------------------------- 1 year 0.23% -5.54% -0.42% -5.23% - ------------------------------------------------------------------------------- 5 years 44.20 35.88 -- -- Annual average 7.59 6.32 -- -- - ------------------------------------------------------------------------------- 10 years 307.56 284.17 -- -- Annual average 15.09 14.41 -- -- - ------------------------------------------------------------------------------- Life of class B -- -- 25.40 22.40 Annual average -- -- 8.03 7.14 - ------------------------------------------------------------------------------- Fund performance data do not take into account any adjustment for taxes payable on reinvested distributions. The Fund began offering what are now known as class A shares on 9/1/67. Effective 4/27/92, the fund began offering class B shares, and on 3/1/95, class M shares. Performance for class M shares is not shown be- cause of the brevity of the reporting period. Performance data represent past results and will differ for each share class. Investment returns and principal value will fluctuate so an investor's shares, when sold, may be worth more or less than their original cost. TERMS AND DEFINITIONS CLASS A SHARES are generally subject to an initial sales charge. CLASS B SHARES may be subject to a sales charge upon redemption. CLASS M SHARES have a lower initial sales charge and a higher 12b-1 fee than class A shares and no sales charge on redemption. NET ASSET VALUE (NAV) is the value of all your fund's assets, minus any liabili- ties, divided by the number of outstanding shares, not including any initial or contingent deferred sales charge. PUBLIC OFFERING PRICE (POP) is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. POP performance figures shown here assume the maximum 5.75% sales charge for class A shares and 3.50% for class M shares. CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the time of the redemption of class B shares and assumes redemption at the end of the period. Your fund's CDSC declines from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. COMPARATIVE BENCHMARKS STANDARD & POOR'S 500 INDEX is an unmanaged list of common stocks that is fre- quently used as a general measure of stock market performance. MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX is an unmanaged list of global equity securities, with all values expressed in U.S. dollars. MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX is an unmanaged list of equity securities from Europe, Australia and the Far East, with all values expressed in U.S. dollars. Indexes assume reinvestment of all distributions and does not take into account brokerage commissions or other costs. The fund's portfolio contains securities that do not match those in the indexes. PUTNAM GROWTH FUNDS Asia Pacific Growth Fund Capital Appreciation Fund * Diversified Equity Trust Europe Growth Fund Global Growth Fund Health Sciences Trust Investors Fund Natural Resources Fund New Opportunities Fund OTC Emerging Growth Fund Overseas Growth Fund Vista Fund Voyager Fund PUTNAM GROWTH AND INCOME FUNDS Convertible Income-Growth Trust Growth and Income Fund II Managed Income Trust The George Putnam Fund of Boston The Putnam Fund for Growth and Income Utilities Growth and Income Fund PUTNAM INCOME FUNDS Adjustable Rate U.S. Government Fund American Government Income Fund Diversified Income Trust High Yield Advantage Fund High Yield Trust Income Fund Intermediate U.S. Government Income Fund Preferred Income Fund U.S. Government Income Trust PUTNAM TAX-FREE INCOME FUNDS Intermediate Tax Exempt Fund Municipal Income Fund Tax Exempt Income Fund Tax-Free High Yield Fund Tax-Free Insured Fund STATE TAX-FREE INCOME FUNDS + Arizona, California, Florida, Massachusetts Michigan, Minnesota, New Jersey, New York, Ohio, and Pennsylvania LIFESTAGE (SM) FUNDS Putnam Asset Allocation Funds -- three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments to help maximize your return and reduce your risk. The three portfolios: Putnam Asset Allocation: Balanced Portfolio Putnam Asset Allocation: Conservative Portfolio Putnam Asset Allocation: Growth Portfolio MOST CONSERVATIVE INVESTMENTS PUTNAM MONEY MARKET FUNDS: California Tax Exempt Money Market Fund Money Market Fund New York Tax Exempt Money Market Fund Tax Exempt Money Market Fund CDs AND SAVINGS ACCOUNTS +++ * Temporarily closed to new investors. + Not available in all states. ++ Relative to above. +++ Not offered by putnam investments. certificates of deposit offer a fixed rate of return and may be insured, up to certain limits, by federal/state agencies. savings accounts may also be insured up to certain limits. 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, in- cluding charges and expenses. please read it carefully before you invest or send money. PORTFOLIO OF INVESTMENTS OWNED April 30, 1995 (Unaudited) COMMON STOCKS (93.4%)* NUMBER OF SHARES VALUE ARGENTINA (0.4%) - ------------------------------------------------------------------------------- 500,000 Astra CIA Argentina DE Petro $ 693,000 53,175 Banco De Galicia y Buenos Aires Class B ADR 857,447 345,500 Banco Frances del Rio De La Plata S.A. + 2,193,925 50,000 Banco Frances del Rio De La Plata S.A. ADR + 918,750 49,700 Capex S.A. 144A GDR + 733,075 200,364 Cia Naviera Perez Companc S.A. + 817,485 590,235 Ciadea + 2,744,592 75,000 Telecom Argentina Class B 325,500 10,200 Telecom Argentina S.A. ADR 446,250 ---------------- 9,730,024 AUSTRALIA (1.1%) - ------------------------------------------------------------------------------- 1,196,752 Amcor, Ltd. 8,789,784 3,000,000 Biota Holdings Ltd. + 3,381,600 17,083,000 Sydney Harbor Casino 14,284,805 ---------------- 26,456,189 AUSTRIA (0.2%) - ------------------------------------------------------------------------------- 410,000 Mayr-Melnhof Karton AG 144A ADS 5,893,750 BELGIUM (1.6%) - ------------------------------------------------------------------------------- 21,500 Bekaert S.A. 16,763,986 39,200 Solvay S.A. 21,004,896 ---------------- 37,768,882 BRAZIL (0.1%) - ------------------------------------------------------------------------------- 27,615 Comp Energetica De Minas Gerais (Cemig) 144A ADS 631,693 24,700,000 Companhia Siderurgica Nacional 642,469 2,353,000 Eletrobras de Brazil 642,896 26,600 Telebras Co. ADR 947,625 49,700 Usiminas Siderurg Minas 144A ADR 599,506 ---------------- 3,464,189 CHILE (--%) - ------------------------------------------------------------------------------- 60,600 Banco Osorno y La Union ADR 727,200 COLUMBIA (--%) - ------------------------------------------------------------------------------- 39,000 Cementos Paz Delaware Rio 144A ADR + 633,750 DENMARK (0.7%) - ------------------------------------------------------------------------------- 630,850 Tele Danmark A/S ADS 16,559,813 FINLAND (0.8%) - ------------------------------------------------------------------------------- 910,000 Repola 18,281,081 COMMON STOCKS NUMBER OF SHARES VALUE FRANCE (7.0%) - ------------------------------------------------------------------------------- 41,536 Cetelem Group $ 8,762,621 203,100 Credit Local de France S.A. 17,278,956 42,682 Docks de France S.A. 6,361,133 211,000 Lafarge Coppee (Bearer) 16,408,732 400,000 Michelin Corp. Class B (Registered) + 17,908,640 156,200 Pechiney International 3,996,190 103,000 Peugeot S.A. 14,827,818 630,000 SGS-Thomson Microelectronics ADR + 23,467,500 140,000 Societe Generale D.Enterprises 15,350,258 249,324 Societe Nationale Elf Aquitaine (Bearer) 19,880,098 36,200 Sommer-Allibert 13,803,777 171,991 Ugine S.A. (Bearer) 12,152,867 41,740 Union Assurance 1,132,277 ---------------- 171,330,867 GERMANY (1.8%) - ------------------------------------------------------------------------------- 29,295 Schering AG 21,733,638 57,000 VEBA AG 21,226,031 ---------------- 42,959,669 HONG KONG (2.4%) - ------------------------------------------------------------------------------- 1,010,000 Chen Hsong Holdings 544,693 1,240,000 Cheung Kong Holdings Ltd. 5,222,012 362,000 Consolidated Electric Power Asia Ltd. 792,635 3,100,000 Golden Resources Dev. Intl. Ltd. 236,220 1,446,200 Guoco Group Ltd. 5,492,668 1,158,556 HSBC Holdings PLC 13,432,414 1,724,000 Hong Kong Electric Holdings, Ltd. 5,289,404 3,500,000 Hong Kong Land Holdings Ltd. 6,580,000 3,142,000 Hong Kong Telecommunications Ltd. 6,149,208 917,000 Hutchison Whampoa, Ltd. 3,980,239 755,000 Jinhui Shipping & Transp. ADR + 830,500 790,000 National Mutual Asia Ltd. 461,834 1,235,700 Swire Pacific Ltd. Class A 8,260,902 337,000 Varitronix International Ltd. 491,953 ---------------- 57,764,682 INDIA (0.2%) - ------------------------------------------------------------------------------- 66,300 Autoriders Finance Ltd. + 559,182 36,000 East India Hotel 144A GDR + 490,680 50,000 Gujarat Narmada Valley Fertilizer 144A GDR + 437,500 50,900 India Cements Ltd. 144A GDR 483,550 21,800 India Magnum Fund Class A (acquired 3/23/95 shares 21,800 cost $1,177,200) + ++ 1,046,400 31,400 Indian Hotels, Ltd. 144A GDR 521,240 55,600 Indian Petrochemicals Corp. Ltd. 144A ADR + 861,800 157,500 Kec International Ltd. + 751,905 192,400 Salora International Ltd. + 416,392 12,300 Southern Petrochemical Ltd. 144A GDR + 98,400 ---------------- 5,667,049 COMMON STOCKS NUMBER OF SHARES VALUE INDONESIA (0.1%) - ------------------------------------------------------------------------------- 80,000 Asia Pacific Resource International Class A + $ 630,000 381,000 Astra International (Registered) 486,499 325,000 Indorayon Utama (Registered) + 655,233 13,900 Part Tri Polyta ADR 298,850 160,000 Sampoerna Industries (Registered) 939,072 ---------------- 3,009,654 IRELAND (2.8%) - ------------------------------------------------------------------------------- 4,474,516 Allied Irish Banks 20,702,243 3,025,000 CRH PLC 18,661,225 130,000 Elan Corp., PLC ADR + 4,598,750 3,215,022 Greencore Group PLC 22,824,084 ---------------- 66,786,302 ITALY (0.4%) - ------------------------------------------------------------------------------- 1,404,840 Cartiere Burgo S.P.A. 9,380,960 1,974,500 CIR-Compagnie Industriali Riunite S.P.A. + 1,030,294 ---------------- 10,411,254 JAPAN (19.7%) - ------------------------------------------------------------------------------- 50,480 Asahi Diamond Industrial Co. Ltd. 749,850 1,142,000 Bridgestone Corp. 18,456,547 290,000 CSK Corp. 8,029,723 28,000 Chubu Electric Power, Inc. 778,610 1,150,000 Dai Nippon Printing Co., Ltd. 19,269,170 1,422,000 Daiwa Securities Ltd. 17,912,365 1,910,000 Fujitsu, Ltd. 19,497,280 150,000 Hirose Electric Co. Ltd. 9,108,735 370,000 Ito Yokado Co., Ltd. 19,917,988 580,800 JGC Corp. 9,179,602 361,000 KAO Corp. + 4,375,753 416,000 Komori Corp. 10,332,026 360,000 Kurita Water Ltd. 8,770,068 130,000 Mabuchi Motor Co. Ltd. 8,573,981 1,140,000 Marui Co., Ltd. 17,475,972 1,150,000 Matsushita Electric Industrial Co., Ltd. 19,269,170 780,000 Mitsubishi Bank Ltd. 19,094,478 1,800,000 Mitsubishi Motors Corp. 16,705,980 490,000 Murata Manufacturing Co. Ltd. 19,681,536 829,000 Nippondenso Co., Ltd. 16,648,973 905,000 Nishimatsu Construction Co. 10,862,172 3,623,000 Nisshin Steel Co., Ltd. 18,168,983 1,100,000 Omron Tateisi Electronics Corp. 21,568,580 347,600 Santen Pharmaceutical Co., Ltd. 8,798,416 835,000 Sanwa Bank Ltd. 18,059,464 160,000 Secom Co., Ltd. 10,419,488 1,189,000 Sekisui Chemical Co., Ltd. 14,835,985 70,000 Shandong Huaneng Power ADR 568,750 930,000 Shimizu Corp. 9,968,670 450,000 Takuma Co. Ltd. 7,647,075 1,000,000 Tokio Marine & Fire Insurance Co. Ltd. 11,883,500 COMMON STOCKS NUMBER OF SHARES VALUE JAPAN (continued) - ------------------------------------------------------------------------------- 600,000 Tokyo Electric Power Co., Inc. $ 19,180,020 2,420,000 Toray Industries, Inc. 16,880,952 90,000 Tostem Corp. 3,262,032 17,000 Toyo Seikan Kaisha Ltd. 585,859 736,000 Yamanouchi Pharmaceutical Co. Ltd. + 16,530,486 500,000 Yamatake Honeywell 8,496,750 923,800 Yamato Transport Co. Ltd. 10,571,875 1,000,000 Yasuda Fire & Marine Insurance Co., Ltd. 7,106,400 ---------------- 479,223,264 LUXEMBOURG (0.1%) - ------------------------------------------------------------------------------- 58,000 Ashok Leyland Ltd. 144A GDR + 710,500 21,100 Benpres Holdings Corp. 144A GDR + 147,700 36,500 Millicom International Cellular S.A. + 907,938 ---------------- 1,766,138 MALAYSIA (1.3%) - ------------------------------------------------------------------------------- 60,000 Genting Berhad 546,450 606,000 Hong Leong Industries Berhad 3,213,376 267,000 Leader Universal + 870,020 178,000 Leader Universal (New Class A) + 558,386 300,000 Malayan Banking Berhad 2,052,210 232,000 Malaysian Assurance Alliance 755,948 285,000 Maruichi Malaysia Steel Tube 899,831 4,620,000 Sime Darby Berhad 11,781,462 169,000 Sungei Way Holdings 670,389 176,000 Technology Resources Industries + 448,818 106,000 Telekom Malaysia Berhad 729,407 51,000 Tung Ho Steel GDR + 994,500 1,150,000 United Engineers Berhad Ltd. 6,609,970 205,500 Ytl Corp. Berhad 931,634 ---------------- 31,062,401 MEXICO (--%) - ------------------------------------------------------------------------------- 32,050 International De Ceramica ADR + 292,456 NETHERLANDS (4.9%) - ------------------------------------------------------------------------------- 29,962 ABN AMRO Holding N.V. 1,151,573 162,263 Aegon N.V. 12,587,844 110,000 Akzo-Nobel N.V. 12,747,053 106,900 Dutch State Mines N.V. 8,981,171 505,006 Getronics Electric N.V. 20,644,999 600,000 IHC Caland N.V. 16,378,020 320,000 K.L.M.-Royal Dutch Airlines + 9,723,808 422,400 Koninklijke PPT Nederland N.V. 14,711,770 261,857 Wolters Kluwer N.V. 21,291,802 ---------------- 118,218,040 NORWAY (0.1%) - ------------------------------------------------------------------------------- 100,000 Maritime Investment Fund + 1,037,500 35,000 Smedvig Transpotation ADR 490,000 ---------------- 1,527,500 COMMON STOCKS NUMBER OF SHARES VALUE PAKISTAN (0.1%) - ------------------------------------------------------------------------------- 82,695 Hubco Power GDR $ 1,013,013 48,100 Pakistan State Oil 471,183 5,700 Pakistan Telecomm Ltd. 144A GDR + 581,400 ---------------- 2,065,596 PHILIPPINES (--%) - ------------------------------------------------------------------------------- 2,850,000 Bankard, Inc. + 625,860 8,800 Philippine Long Distance Telephone Co. ADR 561,000 ---------------- 1,186,860 RUSSIA (--%) - ------------------------------------------------------------------------------- 87,800 Fleming Russia Securities Fund Ltd. + 395,100 SINGAPORE (5.3%) - ------------------------------------------------------------------------------- 1,203,000 Cycle & Carriage Ltd. 9,841,502 1,105,000 Development Bank of Singapore (Registered) 11,815,213 1,800,000 Genting Berhad 16,393,500 1,084,000 Hong Leong Industries 5,748,018 750,000 Jardine Matheson Holdings Ltd. 5,962,500 1,257,000 Jurong Shipyard Ltd. 9,651,875 1,479,000 Leader Universal + 4,819,322 986,000 Leader Universal (New Class A) + 3,093,082 1,200,000 Malayan Banking Berhad 8,208,840 2,560,000 Overseas Union Bank Ltd. (Registered) 14,788,608 1,490,000 Singapore Airlines Ltd. (Registered) 14,327,989 465,000 Singapore Press Holdings (Registered) + 8,008,602 1,552,569 United Overseas Bank Ltd. (Registered) 16,155,257 ---------------- 128,814,308 SOUTH AFRICA (0.1%) - ------------------------------------------------------------------------------- 678,760 Iscor Iron & Steel Industrial Corp., Ltd. 841,866 95,800 Sasol Ltd. 926,242 28,000 South African Breweries Ltd. 773,480 ---------------- 2,541,588 SOUTH KOREA (--%) - ------------------------------------------------------------------------------- 3,000 L.G. Chemical Limited + 84,219 SPAIN (2.1%) - ------------------------------------------------------------------------------- 386,200 Argentaria Corp. (Registered) 12,466,150 300,000 Hidrolectrica del Cantabrico 9,075,420 1,550,000 Iberdrola S.A. 10,182,415 146,989 Immobiliaria Metropolitana Vasco Central 4,321,447 15,000 Inversiones Y Represent ADR 348,750 28,000 Repsol S.A. 890,187 425,000 Repsol S.A. ADS 13,600,000 ---------------- 50,884,369 SWEDEN (1.7%) - ------------------------------------------------------------------------------- 657,000 Astra AB Free 19,166,661 3,250 Nordic Recovery Fund + 4,907,500 1,027,800 Svenska Cellulosa AB Ser. B 18,244,992 ---------------- 42,319,153 COMMON STOCKS NUMBER OF SHARES VALUE SWITZERLAND (3.8%) - ------------------------------------------------------------------------------- 20,500 BBC Brown Boveri & Cie A.G., Ltd. (Bearer) $ 20,275,915 11,826 Georg Fischer (Bearer) 13,703,058 3,845 Georg Fischer (Registered) 864,158 8,280 Nestle S.A. (Registered) 8,102,601 5,700 Rieter Holding AG (Registered) 7,477,043 2,750 Rieter Holding AG Part Cert 711,850 9,300 SGS Societe Generale De Surveillance Holdings S.A. 15,533,892 17,286 Swiss Reinsurance (Registered) 12,078,281 15,600 Union Bank of Switzerland (Bearer) 14,379,019 ---------------- 93,125,817 TAIWAN (0.1%) - ------------------------------------------------------------------------------- 44,280 Hocheng Group Corp. 144A GDR + 736,155 28,000 Yageo Corp 144A GDR + 553,000 ---------------- 1,289,155 THAILAND (0.2%) - ------------------------------------------------------------------------------- 469,333 Industrial Finance Corp. (Registered) 1,002,261 16,200 Siam Cement PLC (Registered) 931,738 117,000 Siam Makro Public Co. (Registered) + 447,350 84,000 Siam Makro Public Co. Ltd. + 333,127 130,000 Thai Farmers Bank Public Co. (Registered) 1,142,167 ---------------- 3,856,643 UNITED KINGDOM (9.1%) - ------------------------------------------------------------------------------- 2,240,000 Amec PLC 2,526,048 1,200,000 Anglian Water PLC 9,666,000 2,516,902 Argyll Group PLC 11,596,626 1,547,837 BAT Industries PLC + 11,694,837 1,652,540 Barclays Bank PLC 17,011,743 1,036,716 Burmah Oil PLC 14,580,374 1,463,700 CLM Insurance Fund PLC 2,004,391 836,000 East Midlands Electric PLC 8,875,394 3,937,500 Explaura Holdings PLC + 47,643 2,180,000 General Electric Co. (The) PLC 10,711,648 1,500,000 Guinness PLC 11,345,550 995,000 Molins PLC 9,617,670 1,119,094 North West Water Group PLC 10,204,235 205,000 Pearson PLC 1,892,355 2,500,338 Royal Insurance Holdings PLC 12,204,899 11,600,000 Sears PLC 19,528,600 272,000 Securicor Group PLC Class A 3,996,306 704,295 Security Services PLC 8,997,509 2,690,900 Senior Engineering Group PLC 3,576,475 1,527,316 Siebe PLC 13,852,603 393,100 Southern Electric PLC 4,186,004 2,815,476 Tate & Lyle PLC 19,639,634 4,032,786 Vodafone Group PLC 12,636,332 ---------------- 220,392,876 COMMON STOCKS NUMBER OF SHARES VALUE UNITED STATES (25.1%) - ------------------------------------------------------------------------------- 100,000 A.P.S. Holding Corp. + $ 2,237,500 124,000 AMR Corp. 8,354,500 172,400 Adaptec, Inc. + 5,516,800 15,000 Advocat, Inc. + 178,125 153,000 Alexander Haagen Properties 1,740,375 69,000 American Electronic Components, Inc. + 560,625 271,000 American Express Co. 9,417,250 376,000 American Family Restaurants + 1,692,000 118,500 American General Corp. 3,910,500 120,000 Armstrong World Industries, Inc. 5,460,000 23,100 Avalon Properties, Inc. 453,338 284,600 Avon Products, Inc. 18,000,950 113,000 Back Bay Restaurant Group, Inc. + 550,875 175,000 Baker (J.) Inc. 2,187,500 131,800 Bank of Boston Corp. 4,415,300 90,000 BankAmerica Corp. 4,455,000 47,500 Bankers Life Holding Corp. 997,500 45,000 Baxter International, Inc. 1,563,750 65,000 Beacon Properties Corp. 1,275,625 76,000 Beckman Instruments, Inc. New 2,071,000 54,000 Bell Atlantic Corp. 2,963,250 100,000 Best Products, Inc. + 662,500 137,000 Block (H & R), Inc. 5,771,125 531,900 Brunswick Corp. 11,369,363 143,700 Burlington Industries, Inc. + 1,580,700 54,405 CBS Inc. 3,488,721 46,000 CIGNA Corp. 3,340,750 97,000 CMC Group, Inc. + 218,250 136,800 CWM Mortgage Holdings, Inc. 1,470,600 86,000 Cabletron Systems, Inc. + 4,085,000 27,400 Camden Property Trust 575,400 337,000 Capco Automotive Products 2,990,875 101,000 Capital Cities/ABC, Inc. 8,534,500 89,000 Capstone Capital Trust, Inc. 1,412,875 134,500 Cavalier Homes, Inc. 1,546,750 72,400 CenterPoint Properties Corp. 1,375,600 50,000 Chambers Development Co., Inc. Class A + 281,250 14,400 Chateau Properties, Inc. 297,000 272,500 Chemical Banking Corp. 11,376,875 195,000 Circle K Corp. + 3,241,875 272,500 Circus Circus Enterprises, Inc. + 9,026,563 22,000 Citicorp 1,020,250 42,500 Citizens Investments, Inc. 568,650 330,000 Collins & Aikman Corp. + 2,475,000 50,000 Coltec Holdings Inc. + 912,500 53,000 Columbia/HCA Healthcare Corp. 2,226,000 63,000 Commercial Net Lease Realty, Inc. 763,875 142,100 Computer Associates International, Inc. 9,147,688 158,100 Congoleum Corp. Class A + 2,312,213 129,800 Corrpro Cos., Inc. + 2,401,300 235,300 Crown American Realty Trust 2,941,250 25,000 DPL, Inc. 521,875 101,000 Deere (John) & Co. 8,282,000 8,400 Dexter Corp. 192,150 41,000 Diebold, Inc. 1,701,500 COMMON STOCKS NUMBER OF SHARES VALUE UNITED STATES (continued) - ------------------------------------------------------------------------------- 45,600 Donnkenny, Inc. + $ 815,100 86,000 Duckwall-Alco Stores, Inc. + 752,500 114,600 Dun & Bradstreet Corp. 5,973,525 348,000 EMC Corp. + 6,873,000 69,600 Eastex Energy, Inc. + 261,000 28,000 Echlin, Inc. 1,022,000 69,000 Epitope, Inc. + 1,173,000 25,000 Federal National Mortgage Association 2,206,250 122,200 Felcor Suite Hotels, Inc. 2,856,425 43,700 Financing for Sciences + 125,637 12,000 First Financial Management Corp. 877,500 173,800 First Industrial Realty Trust 3,041,500 177,000 First Interstate Bancorp 13,606,875 247,000 Ford Motor Co. 6,669,000 104,000 Foundation Health Corp. + 2,886,000 175,000 GTE Corp. 5,971,875 342,850 General Electric Co. 19,199,600 50,000 General Growth Properties, Inc. 1,012,500 210,000 General Motors Corp. 9,476,250 43,000 General RE Corp. 5,477,125 70,000 Golden Systems Inc. + 35,000 148,300 Grace (W.R.) & Co. 7,952,587 38,000 Health Systems International, Inc. Class A + 969,000 50,000 Heinz (H.J.) Co. 2,100,000 199,000 Herbalife International, Inc. 2,462,625 92,000 Holophane Corp. + 1,748,000 55,000 Horizon Outlet Centers 1,210,000 134,000 IBM Corp. 12,696,500 470,107 ICN Pharmaceuticals, Inc. 7,874,292 146,000 ITT Corp. 15,257,000 205,800 IVF America, Inc. + 347,288 98,000 Imperial Oil Ltd. 3,503,500 103,000 Integrated Health Services, Inc. 3,566,375 212,200 LTC Properties Inc. 2,758,600 72,000 Landstar System, Inc. + 2,088,000 18,400 Lehman Brothers Holding, Inc. 358,800 105,600 Life Partners Group, Inc. 2,059,200 239,100 Limited Inc. (The) 5,110,763 94,000 Lowe's Cos., Inc. 2,714,250 9,000 MBNA Corp. 272,250 225,000 Magna International, Inc. Class A 7,790,625 116,000 Malan Realty Investors, Inc. 1,595,000 73,000 Manufactured Home Communities, Inc. 1,149,750 162,000 Mapco, Inc. 9,213,750 40,000 McArthur/Glen Realty Corp. 530,000 84,000 McDonnell Douglas Corp. 5,208,000 82,000 Merrill Lynch & Co., Inc. 3,731,000 78,000 Mid Atlantic Realty Trust 663,000 198,000 Mid Ocean, Ltd. + 5,667,750 49,900 Millipore Corp. 3,062,613 81,000 Minerals Technologies, Inc. 2,693,250 62,500 Morgan (J.P.) & Co., Inc. 4,101,563 21,000 Morgan Stanley Group, Inc. 1,459,500 140,500 National Health Investors, Inc. 3,688,125 57,000 NationsBank Corp. 2,850,000 COMMON STOCKS NUMBER OF SHARES VALUE UNITED STATES (continued) - ------------------------------------------------------------------------------- 101,700 Norfolk Southern Corp. $ 6,852,038 301,700 Northwest Airlines, Inc. Class A + 8,975,575 66,500 Norton McNaughton, Inc. + 1,147,125 66,400 Nuevo Energy Co. + 1,269,900 118,000 O'Sullivan Industries Holdings + 944,000 47,000 Oasis Residential, Inc. 1,028,125 120,800 Oroamerica, Inc. + 694,600 30,000 Owens & Minor, Inc. Holding Co. 405,000 519,000 Owens-Illinois Inc. + 6,163,125 143,000 Parametric Technology Corp. + 6,792,500 57,900 Penn National Gaming, Inc. + 593,475 147,000 Penney (J.C.) Co., Inc. 6,431,250 220,100 PepsiCo, Inc. 9,161,663 85,000 Pfizer, Inc. 7,363,125 46,000 Pittston Minerals Group 563,500 42,000 Post Properties, Inc. 1,244,250 315,800 Premark International, Inc. 15,237,350 174,100 RFS Hotel Investors, Inc. 2,524,450 150,000 RJR Nabisco Holdings Corp. 4,106,250 106,000 Raychem Corp. 3,776,250 24,000 Reliance Group Holdings, Inc. 132,000 71,100 Reptron Electronics, Inc. + 1,039,837 97,200 Rightchoice Managed Care, Inc. Class A + 1,263,600 175,800 Rite Aid Corp. 4,087,350 111,000 River Bank America + 777,000 40,400 Ross Stores, Inc. 393,900 8,500 Royal Caribbean Cruises Ltd. 202,938 53,000 Royal Dutch Petroleum Co. PLC ADR 6,572,000 31,700 STB Systems, Inc. + 356,625 132,000 Sara Lee Corp. 3,679,500 24,400 Seda Specialty Packaging Corp. + 259,250 48,000 Seitel, Inc. + 1,536,000 112,000 Sensormatic Electronics Corp. 3,332,000 51,000 Service Corp. International 1,440,750 90,000 Shorewood Packaging Corp. + 1,417,500 81,500 Sizeler Property Investments, Inc. 815,000 264,650 Snap-On, Inc. 9,858,213 20,000 Speedway Motorsports, Inc. + 367,500 108,000 Sports Club Co., Inc. + 594,000 308,500 Sprint Corp. 10,180,500 213,800 Sterile Concepts Holdings 2,619,050 140,300 Sterling Software, Inc. + 4,770,200 118,600 Stone Energy Corp. + 1,645,575 64,600 Sun Communities, Inc. 1,380,825 177,450 TJX Cos., Inc. (The) 2,040,675 2,100 TRW, Inc. 156,187 99,500 Tandem Computers, Inc. + 1,268,625 289,800 Tandy Corp. 14,345,100 236,500 Team Rental Group, Inc. + 1,921,563 97,000 The PMI Group, Inc. + 3,613,250 139,800 Titan Holdings, Inc. + 1,537,800 1,100 Tivoli Systems, Inc. + 42,075 150,000 TransTexas Gas Corp. + 1,987,500 124,000 Tribune Co. 7,331,500 93,000 Trism, Inc. + 732,375 COMMON STOCKS NUMBER OF SHARES VALUE UNITED STATES (continued) - ------------------------------------------------------------------------------- 70,000 US WEST, Inc. $ 2,896,250 241,200 USX-Marathon Group 4,522,500 256,000 Union Texas Petroleum Inc. 5,472,000 20,837 Vishay Intertechnology, Inc. + 1,231,988 12,000 Walden Residential Properties, Inc. 231,000 139,000 Western Digital Corp. + 2,224,000 131,000 Winston Hotels 1,310,000 58,000 Xerox Corp. 7,141,250 111,000 Young Broadcasting Corp. Class A + 2,442,000 40,000 Zeigler Coal Holding Co. 455,000 ---------------- 611,776,506 URUGUAY (--%) - ------------------------------------------------------------------------------- 50,000 Banco Comercial S.A. 144A GDR 650,000 VENEZUELA (0.1%) - ------------------------------------------------------------------------------- 225,040 Venepal 144A 506,340 184,000 Venezolana de Prerreducidos Caroni Venprecar 920,000 ---------------- 1,426,340 ---------------- TOTAL COMMON STOCKS (cost $1,994,709,115) $2,270,342,684 PREFERRED STOCKS (0.7%)* NUMBER OF SHARES VALUE BRAZIL (0.1%) - ------------------------------------------------------------------------------- 79,100,000 Banco Bradesco $ 613,784 4,800,000 Companhia Vale Do Rio Doce 800,000 2,630,000 Coteminas Cia Tecidos Norte de Minas 692,710 228,000,000 Refrigeracao Parna S.A. 485,891 ---------------- 2,592,385 FINLAND (0.1%) - ------------------------------------------------------------------------------- 40,000 Nokia Corp. ADR 1,640,000 FRANCE (0.5%) - ------------------------------------------------------------------------------- 106,970 Essilor International 13,205,639 ---------------- TOTAL PREFERRED STOCKS (cost $14,696,502) $ 17,438,024 UNITS (0.6%)* NUMBER OF UNITS VALUE LUXEMBOURG (--%) - ------------------------------------------------------------------------------- 13,000 Cesc Ltd. units ADR $ 299,000 UNITED KINGDOM (0.6%) - ------------------------------------------------------------------------------- 1,500,000 Rothmans International units PLC 14,764,800 ---------------- TOTAL UNITS (cost $11,314,916) $ 15,063,800 CONVERTIBLE PREFERRED STOCKS (0.2%)* (cost $1,697,672) NUMBER OF SHARES VALUE UNITED STATES (0.2%) - ------------------------------------------------------------------------------- 40,000 Citicorp $5.375 cv. pfd. $ 5,100,000 CONVERTIBLE BONDS AND NOTES (0.1%)* PRINCIPAL AMOUNT VALUE TAIWAN (--%) - ------------------------------------------------------------------------------- $ 500,000 Teco Electric & Machinery 144A cv. 2 3/4s, 2004 $ 425,000 320,000 United Micro Electric 144A cv. 1 1/4s, 2004 480,000 ---------------- 905,000 UNITED KINGDOM (--%) - ------------------------------------------------------------------------------- 750,000 Danka Business Systems 144A cv. sub. notes 6 3/4s, 2002 836,250 UNITED STATES (0.1%) - ------------------------------------------------------------------------------- 160,000 O'Brien Environmental Energy Inc. cv. sub. deb. 11s, 2011 49,600 880,000 Regency Health Services, Inc. cv. 6 1/2s, 2003 994,400 ---------------- 1,044,000 ---------------- TOTAL CONVERTIBLE BONDS AND NOTES (cost $2,777,300) $ 2,785,250 WARRANTS (--%)*+ NUMBER OF EXPIRATION WARRANTS DATE VALUE ITALY (--%) - ------------------------------------------------------------------------------- 134,140 Cartiere Burgo S.P.A. Wts. 12/31/95 $ 18,095 UNITED STATES (--%) - ------------------------------------------------------------------------------- 43,700 Financing for Sciences Wts. 5/20/99 13,656 ---------------- TOTAL WARRANTS (cost $4,370) $ 31,751 SHORT-TERM INVESTMENTS (5.6%)* PRINCIPAL AMOUNT VALUE $25,000,000 Federal National Mortgage Association 5.87s, July 21, 1995 $ 24,669,813 30,000,000 GTE Southwest Inc. 5.93s, May 5, 1995 29,980,233 20,000,000 General Electric Capital Corp. 5.98s, June 20, 1995 19,833,889 15,000,000 MetLife Funding Inc. 5.93s, May 24, 1995 14,940,700 20,000,000 Morgan (J.P.) & Co., Inc. 5.92s, May 5, 1995 19,986,844 27,370,000 Interest in $485,809,000 joint repurchase agreement dated April 30, 1995 with Morgan (J.P.) & Co., Inc. due May 1, 1995 with respect to various U.S. Treasury obligations-- maturity value of $27,383,457 for an effective yield of 5.90% 27,383,457 ---------------- TOTAL SHORT-TERM INVESTMENTS (cost $136,794,936) $ 136,794,936 - ------------------------------------------------------------------------------- TOTAL INVESTMENTS (cost $2,161,994,811)*** $2,447,556,445 - ------------------------------------------------------------------------------- NOTES * Percentages indicated are based on net assets of $2,432,070,657, which co- rrespond to a net asset value per class A, class B, class M and class Y sha- res of $9.33, $9.12, $9.33 and $9.43 respectively. + Non-income-producing security. ++ Restricted, excluding 144A securities, as to public resale. At the date of acquisition, these securities were valued at cost. There were no outstanding unrestricted securities of the same class as those held. Total market value of restricted securities owned at April 30, 1995 was $1,046,400 or --% of net assets. *** The aggregate identified cost on a tax basis is $2,172,339,230, resulting in gross unrealized appreciation and depreciation of $358,951,873 and $83,734,658, respectively, or net unrealized appreciation of $275,217,215. ADR, ADS or GDR after the name of a foreign holding stands for American Deposi- tory Receipt, American Depository Shares or Global Depository Receipt respecti- vely, representing ownership of foreign securities on deposit with a domestic custodian bank. 144A after the name of a security represents those exempt from registration un- der Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional bu- yers. FORWARD CURRENCY CONTRACTS OUTSTANDING AT APRIL 30, 1995 (aggregate face value $555,473,732) AGGREGATE UNREALIZED MARKET FACE DELIVERY APPRECIATION/ VALUE VALUE DATE (DEPRECIATION) British Pounds (Sell) $ 35,807,244 $ 34,512,055 5/22/95 $ (1,295,189) British Pounds (Sell) 62,737,280 61,479,216 8/22/95 (1,258,064) French Francs (Sell) 12,128,080 12,270,591 8/22/95 142,511 French Francs (Sell) 26,410,796 24,263,501 5/22/95 (2,147,295) French Francs (Sell) 46,031,760 44,272,614 8/22/95 (1,759,146) Japanese Yen (Sell) 293,850,647 255,822,574 8/22/95 (38,028,073) Japanese Yen (Sell) 46,208,603 46,662,809 8/22/95 454,206 Netherland Guilders (Sell) 21,162,033 18,878,607 5/22/95 (2,283,426) Netherland Guilders (Sell) 21,570,980 20,184,653 8/22/95 (1,386,327) Swiss Francs (Sell) 18,639,150 16,381,830 5/22/95 (2,257,320) Swiss Francs (Sell) 22,687,615 20,745,282 8/22/95 (1,942,333) TOTAL $ (51,760,456) The accompanying notes are an integral part of these financial statements. STATEMENT OF ASSETS AND LIABILITIES April 30, 1995 (Unaudited) ASSETS - ------------------------------------------------------------------------------- Investments in securities, at value (identified cost $2,161,994,811) (Note 1) $2,447,556,445 Foreign currency (cost $3,231,781) (Note 1) 4,865,412 Dividends and interest receivable 11,611,955 Receivable for shares of the Fund sold 9,466,718 Receivable for securities sold 50,515,776 Foreign tax receivable 300,028 Receivable for open forward currency contracts 596,717 Prepaid expenses 2,634 - ------------------------------------------------------------------------------- TOTAL ASSETS $2,524,915,685 LIABILITIES - ------------------------------------------------------------------------------- Payable to subcustodian (Note 2) 2,195,749 Payable for securities purchased 23,160,651 Payable for shares of the Fund repurchased 2,902,608 Payable for compensation of Manager (Note 2) 3,796,082 Payable for administrative services (Note 2) 3,009 Payable for compensation of Trustees (Note 2) 848 Payable for investor servicing and custodian fees (Note 2) 1,754,181 Payable for distribution fees (Note 2) 996,035 Other accrued expenses 209,353 Payable for open forward currency contracts 52,357,173 Payable for closed forward currency contracts 5,469,339 - ------------------------------------------------------------------------------- TOTAL LIABILITIES 92,845,028 - ------------------------------------------------------------------------------- NET ASSETS $2,432,070,657 REPRESENTED BY - ------------------------------------------------------------------------------- Paid-in capital (Notes 1 and 4) $2,212,330,566 Undistributed net investment income 9,618,349 Accumulated net realized loss on investment transactions (25,395,950) Net unrealized appreciation on investments, forward currency contracts, and foreign currency translation 235,517,692 - ------------------------------------------------------------------------------- TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO CAPITAL SHARES OUTSTANDING $2,432,070,657 COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE - ------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($1,551,339,181 divided by 166,267,038 shares) $9.33 Offering price per class A share (100/94.25 of $9.33) * $9.90 Net asset value and offering price per class B share ($850,496,091 divided by 93,291,825 shares) + $9.12 Net asset value and redemption price per class M share ($636,463 divided by 68,206 shares) $9.33 Offering price per class M share (100/96.5 of $9.33) * $9.67 Net asset value and offering price per class Y share ($29,598,922 divided by 3,137,360 shares) $9.43 - ------------------------------------------------------------------------------- * On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. + 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. STATEMENT OF OPERATIONS Six months ended April 30, 1995 (Unaudited) INVESTMENT INCOME: - ------------------------------------------------------------------------------- Dividends (net of foreign tax of $2,110,646) $19,190,471 - ------------------------------------------------------------------------------- Interest 3,679,611 - ------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 22,870,082 - ------------------------------------------------------------------------------- EXPENSES: - ------------------------------------------------------------------------------- Compensation of Manager (Note 2) $7,666,267 - ------------------------------------------------------------------------------- Investor servicing and custodian fee (Note 2) 3,629,509 - ------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 24,456 - ------------------------------------------------------------------------------- Reports to shareholders 72,212 - ------------------------------------------------------------------------------- Auditing 31,326 - ------------------------------------------------------------------------------- Legal 15,178 - ------------------------------------------------------------------------------- Registration fees 99,612 - ------------------------------------------------------------------------------- Administrative services (Note 2) 17,358 - ------------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 1,812,896 - ------------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 3,945,317 - ------------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 283 - ------------------------------------------------------------------------------- Other 51,204 - ------------------------------------------------------------------------------- TOTAL EXPENSES 17,365,618 - ------------------------------------------------------------------------------- NET INVESTMENT INCOME 5,504,464 - ------------------------------------------------------------------------------- Net realized gain on investments (Notes 1 and 3) 7,996,436 - ------------------------------------------------------------------------------- Net realized loss on forward currency contracts and foreign currency translation (Note 1) (15,496,396) - ------------------------------------------------------------------------------- Net unrealized depreciation on forward currency contracts and foreign currency translation during the period (49,057,583) - ------------------------------------------------------------------------------- Net unrealized depreciation of investments during the period (10,437,762) - ------------------------------------------------------------------------------- NET LOSS ON INVESTMENTS (66,995,305) - ------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(61,490,841) - ------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED YEAR ENDED APRIL 30 OCTOBER 31 1995* 1994 - ------------------------------------------------------------------------------- INCREASE IN NET ASSETS - ------------------------------------------------------------------------------- Operations: - ------------------------------------------------------------------------------- Net investment income $ 5,504,464 $ 11,127,270 - ------------------------------------------------------------------------------- Net realized gain (loss) on investments, forward currency contracts and foreign currency translation (7,499,960) 54,003,718 - ------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments, forward currency contracts, and foreign currency translation (59,495,345) 64,744,066 - ------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (61,490,841) 129,875,054 - ------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized gain on investments Class A (48,143,318) (18,205,009) - ------------------------------------------------------------------------------- Class B (26,738,828) (5,583,193) - ------------------------------------------------------------------------------- Class Y (918,308) -- - ------------------------------------------------------------------------------- Increase from capital share transactions (Note 4) 230,972,801 1,058,122,192 - ------------------------------------------------------------------------------- TOTAL INCREASE IN NET ASSETS 93,681,506 1,164,209,044 - ------------------------------------------------------------------------------- NET ASSETS - ------------------------------------------------------------------------------- Beginning of period 2,338,389,151 1,174,180,107 - ------------------------------------------------------------------------------- END OF PERIOD (including undistributed net investment income of $9,618,349 and $4,113,885, respectively) $2,432,070,657 $2,338,389,151 - ------------------------------------------------------------------------------- * Unaudited. The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS * (For a share outstanding throughout the period) MAR. 1, 1995 JUNE 15, 1994 APR. 27, 1992 (COMMENCE- SIX (COMMENCE- SIX (COMMENCE- MENT OF MONTHS MENT OF MONTHS MENT OF OPERATIONS) ENDED OPERATIONS) ENDED YEAR ENDED OPERATIONS) TO APR. 30 APR. 30 TO OCT. 31 APR. 30 OCT. 31 TO OCT. 31 1995+ 1995+ 1994 1995+ 1994 1993 1992 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS M CLASS Y CLASS B - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $8.86 $10.00 $9.46 $9.74 $9.19 $7.22 $7.50 - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT OPERATIONS Net investment income -- .04 .01 -- .01 .05 .01 - ----------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments .47 (.30) .53 (.31) .71 1.99 (.29) - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL FROM INVESTMENT OPERATIONS .47 (.26) .54 (.31) .72 2.04 (.28) - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS FROM: Net investment income -- -- -- -- -- (.06) -- - ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments -- (.31) -- (.31) (.17) (.01) -- - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- (.31) -- (.31) (.17) (.07) -- - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $9.33 $9.43 $10.00 $9.12 $9.74 $9.19 $7.22 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT RETURN AT NET ASSET VALUE (%) (b) 5.30(c) (2.48)(c) 5.71(c) (3.07)(c) 7.95 28.44 (3.73)(c) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS, END OF PERIOD (in thousands) $636 $29,599 $29,396 $850,496 $801,443 $233,195 $18,154 - ----------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) .41(c) .49(c) .37(c) 1.00(c) 2.11 2.09 1.16(c) - ----------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) .07(c) .50(c) .42(c) -- .12 .23 .21(c) - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 28.92(c) 28.92(c) 17.45 28.92(c) 17.45 49.53 61.84 - ----------------------------------------------------------------------------------------------------------------------------------- + Unaudited. * The table has been restated to reflect a 4-for-1 share split declared by the fund to shareholders of record on October 27, 1989, payable on October 28, 1989. ** Per share investment income, expenses and net investment income for the year ended December 31, 1986 have been determined on the basis of the weighted average number of shares outstanding during the year. (a) Reflects an expense limitation applicable during the year. As a result of such limitation, expenses of the fund for fiscal 1986 reflect a reduction of $0.01 per share. (b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (c) Not annualized.
FINANCIAL HIGHLIGHTS * (Continued) (For a share outstanding throughout the period) SIX MONTHS ENDED APR. 30 YEAR ENDED OCTOBER 31 1995+ 1994 1993 1992 1991 1990 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS A - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $9.92 $9.30 $7.25 $7.64 $7.12 $7.42 - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT OPERATIONS Net investment income .03 .02 .07 .10 .12 .12 - ----------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments (.31) .77 2.06 (.22) .96 (.21) - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL FROM INVESTMENT OPERATIONS (.28) .79 2.13 (.12) 1.08 (.09) - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS FROM: Net investment income -- -- (.07) (.12) (.15) (.14) - ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments (.31) (.17) (.01) (.15) (.41) (.07) - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS (.31) (.17) (.08) (.27) (.56) (.21) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $9.33 $9.92 $9.30 $7.25 $7.64 $7.12 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT RETURN AT NET ASSET VALUE (%) (b) (2.71)(c) 8.62 29.62 (1.51) (16.51) (1.35) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS, END OF PERIOD (in thousands) $1,551,339 $1,507,550 $940,985 $630,764 $648,450 $560,019 - ----------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) .63(c) 1.33 1.39 1.56 1.47 1.44 - ----------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) .37(c) .83 .85 1.28 1.60 1.56 - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 28.92(c) 17.45 49.53 61.84 70.64 95.39 - -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS * (Continued) (For a share outstanding throughout the period) TEN MONTHS ENDED OCT. 31 YEAR ENDED DECEMBER 31 1989 1988 1987 1986** 1985 - ----------------------------------------------------------------------------------------------------------------------------------- CLASS A - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $6.51 $6.07 $7.60 $5.88 $3.94 - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT OPERATIONS Net investment income .11 .09 .07 .06(a) .03 - ----------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments .80 .46 .44 2.07 2.31 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL FROM INVESTMENT OPERATIONS .91 .55 .51 2.13 2.34 - ----------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS FROM: Net investment income -- (.11) (.13) (.03) (.06) - ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments -- -- (1.91) (.38) (.34) - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- (.11) (2.04) (.41) (.40) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $7.42 $6.51 $6.07 $7.60 $5.88 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT RETURN AT NET ASSET VALUE (%) (b) 14.07(c) 9.04 7.26 37.66 65.03 - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS, END OF PERIOD (in thousands) $482,750 $478,489 $522,569 $411,793 $90,625 - ----------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) 1.06(c) 1.40 1.39 1.07(a) 1.32 - ----------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) 1.52(c) 1.34 1.03 .85(a) 1.04 - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 66.91(c) 102.90 113.05 175.68 134.07 - -----------------------------------------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS April 30, 1995 (Unaudited) NOTE 1 SIGNIFICANT ACCOUNTING POLICIES The fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The fund seeks capital appreciation by investing primarily in common stocks traded in securities mar- kets located in a number of foreign countries and in the United States. The fund offers class A, class B, class M and class Y shares. The fund commenced its public offering of Class M shares on March 1, 1995. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class B shares do not pay a front-end sales charge, but pay a higher ongoing distribution fee than Class A shares, and may be subject to a contingent deferred sales charge, if those sha- res are redeemed within six years of purchase. Class M shares are sold with a maximum front-end sales charge of 3.50%, and an ongoing distribution fee that is higher than class A shares and lower than class B shares. Class Y shares, which do not pay a front-end or contingent deferred sales charge, are generally sub- ject to the same expenses as class A, class B and class M shares, but do not bear a distribution fee. Class Y shares are sold only to defined contribution plans with an initial investment of $250 million in a combination of Putnam funds and other investments managed by Putnam. In addition, the Trustees decla- re separate dividends on each class of shares. Expenses of the fund are borne pro-rata by the holder of all classes of shares, except that each class bears expenses unique to that class (including the distribution fees applicable to such class), and 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 decla- re separate dividends on each class of shares. The following is a summary of significant accounting policies consistently fo- llowed by the fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A) SECURITY VALUATION Investments for which market quotations are readily avail- able are stated at market value, which is determined using the last reported sa- le price, or, if no sales are reported -- as in the case of some securities tra- ded over-the-counter -- the last reported bid price, except that certain U.S. government obligations are stated at the mean between the last reported bid and asked prices. Short-term investments having remaining maturities of 60 days or less are stated at amortized cost which approximates market, and other invest- ments are stated at fair value following procedures approved by the Trustees. B) JOINT TRADING ACCOUNT Pursuant to an exemptive order issued by the Securities and Exchange commission the fund may transfer uninvested cash balances into a joint trading account, along with the cash of other registered investment compa- nies managed by Putnam Investment Management, Inc. (Putnam Management), the fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., and certain accounts. 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 cus- todian, 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. The fund's Manager 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). In- terest income is recorded on the accrual basis and 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 Securities quoted in foreign currencies are translated into U.S. dollars at the current exchange rate. The fund does not isolate that portion of the results of operations resulting from changes in fo- reign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investment. Foreign-denominated receivables and payables are "marked-to-market" daily using the current exchange rate. The fluctuation between the original exchange rate and the current exchange rate is recorded as unrealized translation gain or loss. Upon receipt or payment, the fund realizes a gain or loss amounting to the difference between the original value and the ending value of the receivable or payable. F) OPTION ACCOUNTING PRINCIPLES When the fund writes a call or put option, an amount equal to the premium received by the fund is included in the fund's "Statement of Assets and Liabilities" as an asset and an equivalent liability. The amount of the liability is subsequently "marked-to-market" to reflect the current market value of the option written. The current market value of an op- tion is the last sale price or, in the absence of a sale, the last offering pri- ce. If an option expires on its stipulated expiration date, or if the fund en- ters into a closing purchase transaction, the fund realizes a gain or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written without regard to any unrealized gain or loss on the underly- ing security, and the liability related to such option is extinguished. If a written call option is exercised, the fund realizes a gain or loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received reduces the cost of the security which the fund purchases upon exercise of the option. The fund writes covered call options; that is, options for which it holds the underlying security or its equivalent. Accordingly, the risk in writing a call option is that the fund relinquishes the opportunity to profit if the market price of the underlying security increases and the option is exercised. In wri- ting a put option, the fund assumes the risk of incurring a loss if the market price of the underlying security decreases and the option is exercised. The premium paid by the fund for the purchase of a call or put option is inclu- ded in the fund's "Statement of Assets and Liabilities" as an investment and subsequently "marked-to-market" to reflect the current market value of the op- tion. If an option which the fund has purchased expires on the stipulated expi- ration date, the fund realizes a loss in the amount of the cost of the option. If the fund enters into a closing sale transaction, the fund realizes a gain or loss, depending on whether the proceeds from the closing sale transaction are greater or less than the cost of the option. If the fund exercises a call op- tion, the cost of the security acquired by exercising the call is increased by the premium paid to buy the call. If the fund exercises a put option, it reali- zes a gain or loss from the sale of the underlying security and the proceeds from such sale are decreased by the premium originally paid. OPTIONS ON FOREIGN CURRENCIES The fund writes and purchases put and call options on foreign currencies. The accounting principles and risks involved are similar to those described above relating to options on securities. The amount of poten- tial loss to the fund upon exercise of a written call option is the value (in U.S. dollars) of the currency sold, converted at the spot price, less the value of the U.S. dollars received in exchange. The amount of potential loss to the fund upon exercise of a written put option is the value (in U.S. dollars) of the currency received converted at the spot price, less the value of the U.S. do- llars paid in exchange. FORWARD CURRENCY CONTRACTS A forward currency contract is an agreement between two parties to buy or sell a currency at a set price on a future date. The mar- ket value of the contract will fluctuate with changes in currency exchange ra- tes. The contract is "marked-to-market" daily and the change in market value is recorded by the fund as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the va- lue of the contract at the time it was opened and the value at the time it was closed. The maximum potential loss from forward currency contracts is the aggre- gate face value in U.S. dollars at the time the contract was opened; however, management believes the likelihood of such a loss to be remote. G) FEDERAL TAXES It is the policy of the fund to distribute all of its income within the prescribed time and otherwise comply with the provisions of the In- ternal 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. Therefo- re, no provision has been made for federal taxes on income, capital gains or un- realized appreciation of securities held and excise tax on income and capital gains. H) DISTRIBUTIONS TO SHAREHOLDERS Distributions to shareholders are recorded by the fund on the ex-dividend date. The character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences include treatment of certain gains and losses on foreign currency transactions. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. NOTE 2 MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS Compensation of Putnam Management, for management and investment advisory servi- ces is paid quarterly based on the average net assets of the fund for the quar- ter. Such fee is based on an annual rate of 0.80% of the first $500 million of average net assets, 0.70% of the next $500 million, 0.65% of the next $500 mi- llion and 0.60% of any amount over $1.5 billion. Under current law, the fee is subject to reduction in any year to the extent that expenses (exclusive of dis- tribution fees, brokerage, interest and taxes) of the fund exceed 2.5% of the first $30 million of average net assets, 2.0% of the next $70 million and 1.5% of any amount over $100 million and by the amount of certain brokerage commi- ssions and fees (less expenses) received by affiliates of the Manager on the fund's portfolio transactions. The fund also reimburses the Manager for the compensation and related expenses of certain officers of the fund and their staff who provide administrative ser- vices to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. Trustees of the fund receive an annual Trustee's fee of $3,700 and an additional fee for each Trustees. meeting attended. Trustees who are not interested persons of the Manager and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. Custodial functions for the fund are provided by the Putnam Fiduciary Trust Com- pany (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing agent functions are currently provided by Putnam Investor Services, a division of PFTC. Investor servicing and custodian fees reported in the Statement of Operations for the period ended April 30, 1995 have been reduced by credits allowed by PFTC. As part of the custodial contract between Putnam Fiduciary Trust Company and the subcustodian bank, the subcustodian has a lien on the securities of the fund to the extent permitted by the fund's investment restrictions to cover any advances made by the subcustodian for the settlement of securities purchased by the fund. At April 30, 1995, the payable to subcustodian represents the amount due for cash advanced for the settlement of a security purchase. The fund has adopted distribution plans (the "Plans") with respect to its class A, class B and class M shares pursuant to Rule 12b-1 under the Investment Compa- ny 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 provi- ded and expenses incurred by it in distributing shares of the fund. The Plans provide for payment by the fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets attributable to class A, class B and class M shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00% and 0.75% of the average net assets attributable to class A, class B and class M shares respectively. For the six months ended April 30, 1995, Putnam Mutual funds Corp., acting as underwriter received net commissions of $489,671 from the sale of class A sha- res, $874,585 in contingent deferred sales charges from redemptions of class B shares, and net commissions of $1,966 from the sale of class M shares. A de- ferred sales charge of up to 1% is assessed on certain redemptions of class A shares purchased as part of an investment of $1 million or more. For the six months ended April 30, 1995, Putnam Mutual Funds Corp., acting as underwriter received $6,596 on class A redemptions. NOTE 3 PURCHASES AND SALES OF SECURITIES During the six months ended April 30, 1995, purchases and sales of investment securities other than short-term investments aggregated $652,619,243 and $474,288,149, respectively. There were no purchases or sales of U.S. government obligations during the period. 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 April 30, 1995, there was an unlimited number of shares of beneficial inte- rest authorized. Transactions in capital shares were as follows: SIX MONTHS ENDED APRIL 30 1995 CLASS A SHARES AMOUNT - ------------------------------------------------------------------------------- Shares sold 35,947,718 $327,230,099 - ------------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 4,941,329 44,867,269 - ------------------------------------------------------------------------------- 40,889,047 372,097,368 - ------------------------------------------------------------------------------- Shares repurchased (26,658,961) (242,463,082) - ------------------------------------------------------------------------------- NET INCREASE 14,230,086 $129,634,286 - ------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31 1994 CLASS A SHARES AMOUNT - ------------------------------------------------------------------------------- Shares sold 89,867,991 $864,456,541 - ------------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,757,924 16,542,020 - ------------------------------------------------------------------------------- 91,625,915 880,998,561 - ------------------------------------------------------------------------------- Shares repurchased (40,809,495) (391,801,048) - ------------------------------------------------------------------------------- NET INCREASE 50,816,420 $489,197,513 - ------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30 1995 CLASS B SHARES AMOUNT - ------------------------------------------------------------------------------- Shares sold 20,196,460 $180,943,975 - ------------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 2,773,150 24,653,302 - ------------------------------------------------------------------------------- 22,969,610 205,597,277 - ------------------------------------------------------------------------------- Shares repurchased (12,001,567) (106,812,212) - ------------------------------------------------------------------------------- NET INCREASE 10,968,043 $98,785,065 - ------------------------------------------------------------------------------- YEAR ENDED OCTOBER 31 1994 CLASS B SHARES AMOUNT - ------------------------------------------------------------------------------- Shares sold 67,923,259 $643,916,531 - ------------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 543,647 5,055,913 - ------------------------------------------------------------------------------- 68,466,906 648,972,444 - ------------------------------------------------------------------------------- Shares repurchased (11,507,056) (108,633,648) - ------------------------------------------------------------------------------- NET INCREASE 56,959,850 $540,338,796 - ------------------------------------------------------------------------------- FOR THE PERIOD MARCH 1, 1995 (COMMENCEMENT OF OPERATIONS) TO APRIL 30 1995 CLASS M SHARES AMOUNT - ------------------------------------------------------------------------------- Shares sold 68,432 $622,292 - ------------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - ------------------------------------------------------------------------------- 68,432 622,292 - ------------------------------------------------------------------------------- Shares repurchased (226) (2,050) - ------------------------------------------------------------------------------- NET INCREASE 68,206 $620,242 - ------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30 1995 CLASS Y SHARES AMOUNT - ------------------------------------------------------------------------------- Shares sold 575,547 $5,404,567 - ------------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 100,143 918,308 - ------------------------------------------------------------------------------- 675,690 6,322,875 - ------------------------------------------------------------------------------- Shares repurchased (478,547) (4,389,667) - ------------------------------------------------------------------------------- NET INCREASE 197,143 $1,933,208 - ------------------------------------------------------------------------------- FOR THE PERIOD JUNE 15, 1994 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31 1994 CLASS Y SHARES AMOUNT - ------------------------------------------------------------------------------- Shares sold 2,962,991 $28,809,511 - ------------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - ------------------------------------------------------------------------------- 2,962,991 28,809,511 - ------------------------------------------------------------------------------- Shares repurchased (22,774) (223,628) - ------------------------------------------------------------------------------- NET INCREASE 2,940,217 $28,585,883 - ------------------------------------------------------------------------------- OUR COMMITMENT TO QUALITY SERVICE CHOOSE AWARD-WINNING SERVICE. Putnam Investor Services has won the DALBAR Quality Tested Service Seal for the past five years, through 1994. DALBAR, an independent research firm, ran more than 10,000 tests of 38 shareholder service components. In every category, Putnam outperformed the industry standard. HELP YOUR INVESTMENT GROW. Set up a systematic program for investing with as little as $25 a month from a Putnam fund or from your checking or savings account. * SWITCH FUNDS EASILY. You can move money from one account to another with the same class of shares 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 their original cost. 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 repre- sentative. 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. * Regular investing, of course, does not guarantee a profit or protect against a loss in a declining market. Investors should consider their ability to con- tinue purchasing shares during periods of low price levels. FUND INFORMATION INVESTMENT MANAGER Putnam Investment Management, Inc. One Post Office Square Boston, MA 02109 MARKETING SERVICES Putnam Mutual Funds Corp. One Post Office Square Boston, MA 02109 CUSTODIAN Putnam Fiduciary Trust Company LEGAL COUNSEL Ropes & Gray TRUSTEES George Putnam, Chairman William F. Pounds, Vice Chairman Jameson Adkins Baxter Hans H. Estin John A. Hill Elizabeth T. Kennan Lawrence J. Lasser Robert E. Patterson Donald S. Perkins George Putnam, III Eli Shapiro A.J.C. Smith W. Nicholas Thorndike OFFICERS George Putnam Charles E. Porter President Executive Vice President Patricia C. Flaherty Lawrence J. Lasser Senior Vice President Vice President Gordon H. Silver Peter Carman Vice President Vice President Brett Browchuk Thomas V. Reilly Vice President Vice President Anthony W. Regan Gerald Zukowski Vice President and Fund Manager Vice President and Fund Manager William N. Shiebler John R. Verani Vice President Vice President Paul M. O.Neil John D. Hughes Vice President Vice President and Treasurer Beverly Marcus Clerk and Assistant Treasurer This report is for the information of shareholders of Putnam Global Growth Fund. It may also be used as sales literature when preceded or accompanied by the cu- rrent prospectus, which gives details of sales charges, investment objectives and operating policies of the fund, and the most recent copy of Putnam's Quar- terly Performance Summary. For more information, or to request a prospectus, call toll free: 1-800-225-1581. SHARES OF MUTUAL FUNDS ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPO- RATION (FDIC), THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. --------------- PUTNAM INVESTMENTS Bulk Rate U.S. Postage THE PUTNAM FUNDS PAID One Post Office Square Putnam Boston, Massachusetts 02109 Investments --------------- 18303-005/882/513 APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND EDGAR-FILED TEXTS: (1) Boldface typeface is displayed with capital letters, italic typeface is displayed in normal type. (2) Because the printed page breaks are not reflected, certain tabular and columnar headings and symbols are displayed differently in this filing. (3) Bullet points and similar graphic signals are omitted. (4) Page numbering has been omitted. (5) The trademark symbol has been replaced by (TM). 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