-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C0w2z85c9T+K/KlGnXrEmQguEkIVBmzLtUq4pMgha1IvCCLMUEgVyErm8ecYmcW7 L/eTei+x3Lc1JAEcVsiv/w== 0000928816-96-000174.txt : 19960701 0000928816-96-000174.hdr.sgml : 19960701 ACCESSION NUMBER: 0000928816-96-000174 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960628 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: 96587613 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ STREET 2: MAILSTOP A14 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 8002251581 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 SEMIANNUAL REPORT April 30, 1996 [LOGO: BOSTON * LONDON * TOKYO] * "If consistency is a virtue, then Putnam Global Growth Fund is a saint." -- Morningstar Report, March 12, 1996 * "We have continued to position Putnam Global Growth Fund to take advantage of attractive investment opportunities around the world. At the same time, our emphasis on quality companies with stable earnings has enabled us to post highly consistent results over the longer-term." -- Anthony Regan, Fund Manager, Putnam Global Growth Fund CONTENTS 4 Report from Putnam Management 8 Fund performance summary 11 Portfolio holdings 22 Financial statements [GRAPHIC OMITTED: photo of George Putnam] (copyright) Karsh, Ottawa From the Chairman Dear Shareholder: Around the globe, investing conditions vary. In Asia, Japan's slumbering economy seems to be moving tentatively toward wakefulness, Hong Kong's tensions with China appear to be easing, Singapore's stocks look overpriced, and Australia's new government may spark the market there. In Europe, slow growth, increasing unemployment, uncompetitive labor costs, and overvalued currencies persist, and yet many of the region's stock markets appear to be taking events in stride. At home, U.S. stocks have continued to rise in price -- with occasional bouts of volatility. Putnam Global Growth Fund fared fairly well in this moderate global equity investing environment, posting solid results for the six months ended April 30, 1996. Fund managers Anthony Regan on the international side and Carol McMullen on the domestic side are cautiously optimistic about prospects for the remainder of fiscal 1996. Respectfully yours, /S/George Putnam George Putnam Chairman of the Trustees June 19, 1996 Report from the Fund Managers Anthony W. Regan Carol C. McMullen Buoyed by a moderately upbeat investing environment and vigorous inflows of cash, many stock markets around the globe have been relatively strong over the past several months. Putnam Global Growth Fund's semiannual period results reflected this positive environment. For the six months ended April 30, 1996, your fund's class A shares returned 12.65% at net asset value (NAV) and 6.15% at public offering price (POP). For class B and class M share performance, please turn to page 8 of this report. * PERFORMANCE OF MANY INTERNATIONAL STOCK MARKETS GENERALLY POSITIVE Stock market and economic conditions differed markedly from region to region over the last six months. Asia, excluding Japan, continued to enjoy strong economic growth, although this did not boost prices in all stock markets there. Japan's market moved farther on the road to recovery -- if somewhat tenuously at times. Western Europe's overall economic picture was generally lusterless, but a number of companies there operated with renewed efficiency -- and so bolstered many local exchanges. The U.S. dollar strengthened over the period. We believe that more near- term increases against the Japanese yen remain possible and that the dollar will gain from any political turmoil in Europe. Accordingly we are maintaining defensive currency hedges on approximately 60% of the portfolio's yen exposure and around 30% on the European exposure (United Kingdom, France, the Netherlands and Germany). These hedges will protect the fund against a rapid rise in the dollar's value, which makes foreign stocks worth less in dollar terms. * JAPANESE ECONOMY MIXED; SMALLER ASIAN MARKETS BENEFIT FROM INVESTMENT INFLOWS The Japanese economy still appears to be on its year-long course of steady, though occasionally sluggish, growth. Consumer prices continue to decline, business expectations have improved, and there has been a pause in the rise of unemployment. Political consensus appears to have been reached over the issue of paying for massive housing loan defaults with tax revenues. Despite some periodic bouts of market pessimism, the outlook for corporate profits is positive enough, in our view, to maintain 18.3% of the fund's overall portfolio in Japanese stocks. Of course, this is subject to change. We have increased the fund's weighting in Hong Kong, both in response to encouraging 1995 corporate results there and because of reduced tension with China. We trimmed the portfolio's holdings in Singapore during the period. Many Singapore companies restrict foreign investors to special classes of shares that are typically more expensive than domestic shares of the identical companies. As of this report, foreign premiums had risen to 100% in some cases -- which we consider a poor value. For the coming months, we plan to maintain investment in Singapore at a reduced level. Elsewhere in the Pacific Basin, we decided to invest 1.4% of the fund's portfolio in Australia. This stock market has underperformed others in the region in recent months and now appears relatively attractively valued. Fiscally conservative reforms by Australia's new government could help the corporate sector and, in turn, boost the local stock market. * COST CUTTING AND CORPORATE EFFICIENCY: REVITALIZING WESTERN EUROPE Within Europe, it is apparent that several governments, especially those of Germany and France, are concerned about moderate growth, relatively high unemployment, expensive employment costs, and overvalued currencies. So far, the policy response has been to cut interest rates. However, it is unclear whether these rate cuts will spark a widespread boost in economic activity because consumers in most countries are facing a decline in disposable income. [GRAPHIC OF HORIZONTAL BAR CHART OMITTED: COUNTRY ALLOCATION*] Information reads: United States 28.8% Japan 18.3% United Kingdom 8.0% The Netherlands 6.4% France 5.2% *Based on net assets as of 4/30/96. Holdings will vary over time. Nevertheless, a number of European stock exchanges have performed well. Cuts in short-term interest rates have helped markets, as has an anticipated improvement in the economic situation. Another encouraging development in our view is an emphasis on shareholder value being stressed by some corporate managements. Holdings such as Ciba-Geigy, Swiss Re, and Philips have all sought to improve their efficiency and return on equity -- improvements that tend to benefit shareholders. While these stocks, along with others discussed in this report, were viewed favorably at the end of the fiscal period, all portfolio holdings are subject to review and adjustment in accordance with the fund's investment strategy and may vary in the future. We have decided to reduce the portfolio's weighting slightly in the United Kingdom and in Spain. Political developments played a large role in both decisions. The U.K. general election, which must be held by May 1997 at the latest, is likely to result in a government that will seek to raise taxes on the corporate sector. Results of the Spanish election were less clear-cut than we had initially hoped, and we took profits in stocks there whose prices had reached our initial projections. * MANY U.S. STOCKS REMAIN ATTRACTIVE U.S. holdings currently account for 28.8% of your fund's overall portfolio. Over the period, this portion of your fund handily outperformed the U.S. stock market. The technology sector, in which the fund continues to have a substantial stake, remained generally strong throughout the period. We have emphasized software companies, such as global leader Microsoft and Parametric Technology, as well as networking companies, such as Cisco Systems. The fund also had a large position in the health-care industry, in which we targeted several innovative medical-device makers including Medtronic and Boston Scientific. Your fund also maintained meaningful exposure in such leading pharmaceutical companies as Johnson & Johnson and Pfizer, that have strong product pipelines. [GRAPHIC CHART OMITTED: TOP TEN HOLDINGS (4/30/96) Chart reads: Getronics Electric (The Netherlands) Software Ciba-Geigy AG (Switzerland) Health-care products Veba AG (Germany) Conglomerate Greencore Group PLC (Ireland) Food processor and agricultural products Astra AB (Sweden) Pharmaceuticals Allied Irish Banks PLC (Ireland) Banking Daiwa Securities Ltd. (Japan) Stock brokerage Tabacalera (Spain) Tobacco producer CRH PLC (Ireland) Building materials Omron Tateisi Electronics (Japan) Advanced electronics Represents 9.0% of the fund's net assets. Holdings will vary over time. Resurgent aerospace companies, including Boeing and United Technologies, remain an area of investment focus. Finally, at the end of the semiannual period, the portfolio owned shares of Sears Roebuck and Federated Department Stores, which are benefiting from the improving outlook for domestic retail companies. However, in view of the strong performance of the U.S. market in recent years combined with the relative attractiveness of international markets, we have reduced the U.S. weighting. * OUTLOOK We are cautiously optimistic about the potential for many global stock markets in the coming months. We will continue to evaluate crucial corporate and political developments in Japan while tracking the state of Europe's economies. Finally, in the United States, fundamentals remain solid, but stock valuations are not inexpensive by most historical measures. In the longer term, we remain optimistic that global markets will continue on their course of growth. 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 4/30/96, there is no guarantee the fund will continue to hold these securities in the future. International investing involves certain risks, including currency fluctuations, political developments, and economic instability. Performance summary Performance should always be considered in light of a fund's investment strategy. Putnam Global Growth Fund is designed for investors seeking capital appreciation through a globally diversified equity portfolio. This section provides, at a glance, information about your fund's performance. Total return shows how the value of the fund's shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund. TOTAL RETURN FOR PERIODS ENDED 4/30/96 Class A Class B Class M (inception date) (9/1/67) (4/27/92) (3/1/95) NAV POP NAV CDSC NAV POP - ----------------------------------------------------------------------- 6 months 12.65% 6.15% 12.26% 7.26% 12.41% 8.43% - ----------------------------------------------------------------------- 1 year 22.31 15.27 21.36 16.36 21.56 17.29 - ----------------------------------------------------------------------- 5 years 69.68 59.99 -- -- -- -- Annual average 11.15 9.86 -- -- -- -- - ----------------------------------------------------------------------- 10 years 167.18 151.79 -- -- -- -- Annual average 10.33 9.67 -- -- -- -- - ----------------------------------------------------------------------- Life of class -- -- 57.01 55.01 28.01 23.55 Annual average -- -- 11.91 11.55 23.50 19.81 - ----------------------------------------------------------------------- Performance data represent past results, do not reflect future performance, and will differ for each share class. They do not take into account any adjustment for taxes payable on reinvested distributions or for payments under the fund's class A distribution plan prior to its implementation in fiscal 1990. Investment returns and net asset value will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. POP assumes 5.75% maximum sales charge for class A shares and 3.50% for class M shares. CDSC for class B shares declines from a 5% maximum during the first year to 1% during the sixth year. COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 4/30/96 MSCI MSCI S&P 500 Consumer World EAFE Index Price Index - ----------------------------------------------------------- 6 months 13.37% 13.21% 13.75% 1.69% - ----------------------------------------------------------- 1 year 18.71 11.40 30.13 2.90 - ----------------------------------------------------------- 5 years 67.68 52.70 100.47 15.61 Annual average 10.89 8.83 14.92 2.94 - ----------------------------------------------------------- 10 years 192.63 174.41 278.35 43.92 Annual average 11.33 10.62 14.23 3.71 - ----------------------------------------------------------- Life of class B 68.50 66.86 75.77 12.04 Annual average 13.93 13.65 15.14 2.88 - ----------------------------------------------------------- Life of class M 28.71 22.80 38.29 3.58 Annual average 24.10 19.21 31.93 3.05 - ----------------------------------------------------------- TOTAL RETURN FOR PERIODS ENDED 3/31/96 (most recent calendar quarter) Class A Class B Class M (inception date) (9/1/67) (4/27/92) (3/1/95) NAV POP NAV CDSC NAV POP - ----------------------------------------------------------------------- 6 months 9.26% 2.94% 8.90% 3.90% 9.02% 5.21% - ----------------------------------------------------------------------- 1 year 24.01 16.90 23.06 18.06 23.25 18.91 - ----------------------------------------------------------------------- 5 years 68.96 59.19 -- -- -- -- Annual average 11.06 9.74 -- -- -- -- - ----------------------------------------------------------------------- 10 years 178.85 162.84 -- -- -- -- Annual average 10.80 10.15 -- -- -- -- - ----------------------------------------------------------------------- Life of class -- -- 54.32 51.32 25.75 21.37 Annual average -- -- 11.67 11.12 23.39 19.44 - ----------------------------------------------------------------------- PRICE AND DISTRIBUTION INFORMATION 6 months ended 4/30/96 Class A Class B Class M - ----------------------------------------------------------------------- Distributions (number) 1 1 1 - ----------------------------------------------------------------------- Income $0.1758 $0.1108 0.1318 - ----------------------------------------------------------------------- Capital gains - ----------------------------------------------------------------------- Long-term 0.4062 0.4062 0.4062 - ----------------------------------------------------------------------- Total $0.5820 $0.5170 $0.5380 - ----------------------------------------------------------------------- Share value: NAV POP NAV NAV POP - ----------------------------------------------------------------------- 10/31/95 $10.13 $10.75 $9.86 $10.09 $10.46 - ----------------------------------------------------------------------- 4/30/96 10.77 11.43 10.50 10.75 11.14 - ----------------------------------------------------------------------- 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 liabilities, divided by the number of outstanding shares, not including any initial or contingent deferred sales charge. Public offering price (POP) is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. POP performance figures shown here assume the maximum 5.75% sales charge for class A shares and 3.50% for class M shares. Contingent deferred sales charge (CDSC) is a charge applied at the time of the redemption of class B shares and assumes redemption at the end of the period. Your fund's CDSC declines from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. COMPARATIVE BENCHMARKS Morgan Stanley Capital International (MSCI) World Index is an unmanaged list of global equity securities, with all values expressed in U.S. dollars.* Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged list of equity securities from Europe, Australia and the Far East, with all values expressed in U.S. dollars.* Standard & Poor's (S&P) 500 Index is an unmanaged list of common stocks that is frequently used as a general measure of stock market performance. Consumer Price Index (CPI ) is a commonly used measure of inflation; it does not represent an investment return. *These indexes assume reinvestment of all distributions and interest payments and do not take into account commissions or other costs. 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.
Portfolio of investments owned April 30, 196 (Unaudited) COMMON STOCKS NUMBER OF SHARES VALUE Argentina (0.4%) - ------------------------------------------------------------------------------------------------ 450,000 Astra CIA Argentina DE Petro + $ 956,346 62,746 Banco De Galicia y Buenos Aires Class B ADR 1,474,531 397,325 Banco Frances del Rio De La Plata S.A. 3,802,781 57,500 Banco Frances del Rio De La Plata S.A. ADR 1,653,125 49,700 Capex S.A. 144A GDR 702,261 226,411 Cia Naviera Perez Compac S.A. 1,408,417 34,979 Inversiones Y Represent ADR + 1,049,370 15,300 Siderar S.A.I.C. + 260,100 75,000 Telecom Argentina Class B 339,034 17,100 Telecom Argentina S.A. ADR 773,775 -------------- 12,419,740 Australia (1.4%) - ------------------------------------------------------------------------------------------------ 3,000,000 Biota Holdings Ltd. + 9,106,512 11,389,000 Sydney Harbor Casino + 17,285,678 4,258,333 Westpac Banking Corp. # 20,695,294 -------------- 47,087,484 Austria (0.1%) - ------------------------------------------------------------------------------------------------ 410,000 Mayr-Melnhof Karton AG 144A ADS + 4,612,500 Belgium (0.9%) - ------------------------------------------------------------------------------------------------ 12,540 Bekaert S.A. 9,768,839 33,000 Solvay S.A. 19,411,763 -------------- 29,180,602 Brazil (0.1%) - ------------------------------------------------------------------------------------------------ 38,400 CIA Vale Do Rio Doce 704,587 27,615 Comp Energetica De Minas Gerais (Cemig) 144A ADR 686,923 26,600 Telebras Co. ADR 1,436,400 49,700 Usiminas Siderurg Minas 144A ADR + 571,028 -------------- 3,398,938 Canada (0.3%) - ------------------------------------------------------------------------------------------------ 225,000 Magna International, Inc. Class A 10,434,375 Chile (0.1%) - ------------------------------------------------------------------------------------------------ 60,600 Banco Osorno y La Union ADR 916,575 45,000 Santa Isabel S.A. ADR + 1,299,375 -------------- 2,215,950 Colombia (--%) - ------------------------------------------------------------------------------------------------ 60,000 Banco Industrial Colombiano ADR 1,177,500 39,000 Cementos Paz Del Rio 144A ADR + 482,625 -------------- 1,660,125 Denmark (0.9%) - ------------------------------------------------------------------------------------------------ 300,000 Danisco A/S 14,631,668 639,000 Tele Danmark ADS + 16,134,750 -------------- 30,766,418 Finland (0.1%) - ------------------------------------------------------------------------------------------------ 96,600 Repola 1,868,789 France (5.2%) - ------------------------------------------------------------------------------------------------ 62,304 Cetelem Group 13,356,879 203,100 Credit Locale de France S.A. 16,022,638 42,682 Docks de France S.A. 8,085,900 302,100 Lafarge Coppee 19,330,195 319,000 Michelin Corp. Class B 15,792,750 108,000 Peugeot S.A. 15,073,651 427,800 SGS-Thomson Microelectronics ADR + 20,106,600 140,000 Societe Generale Paris 16,238,159 249,324 Societe Nationale Elf Aquitaine 18,522,175 36,200 Sommer-Allibert 10,328,861 263,000 Total Corp. ADS 17,829,905 -------------- 170,687,713 Germany (1.9%) - ------------------------------------------------------------------------------------------------ 41,300 Millicom International Cellular S.A. + 1,951,425 12,165 Munich Re 22,073,429 28,500 Preussag AG 7,673,292 650,000 VEBA AG 32,285,752 -------------- 63,983,898 Hungary (--%) - ------------------------------------------------------------------------------------------------ 31,200 Gideon Richter GDR 144A + 1,076,400 Hong Kong (3.9%) - ------------------------------------------------------------------------------------------------ 9,983,000 Amoy Properties Ltd. 11,228,746 1,200,000 Chen Hsong Holdings. 616,693 3,172,000 Cheung Kong Holdings Ltd. 22,657,730 2,928,000 Citic Pacific Ltd. 11,507,887 362,000 Consolidated Electric Power Asia Ltd. 599,059 46,500 Ek Chor China Motorcycle Co. 685,875 540,075 First Pacific Co., Ltd. 719,188 3,100,000 Golden Resources Development Intl. Ltd. 440,865 1,501,200 Guoco Group Ltd. 7,472,230 4,060,000 Hong Kong Electric Holdings, Ltd. 12,912,552 3,500,000 Hong Kong Land Holdings, Ltd. 7,490,000 310,000 Hong Kong Telecommunications, Ltd. 591,159 1,412,458 HSBC Holdings PLC 21,091,548 2,425,000 Hutchison Whampoa, Ltd. 15,048,871 405,400 New World Infrastructure Ltd. + 901,495 66,000 Shun Tak Holdings Ltd. 47,784 168,000 Sun Hung Kai Properties 1,601,851 1,235,700 Swire Pacific Ltd. Class A 10,544,061 337,000 Varitronix International Ltd. 618,684 -------------- 126,776,278 India (0.2%) - ------------------------------------------------------------------------------------------------ 58,000 Ashok Leyland Ltd. 144A GDR + 754,000 36,000 East India Hotel 144A GDR + 1,035,000 50,000 Gujarat Narmada Valley Fertilizer 144A GDR + 375,000 96,710 India Cements Ltd. 144A GDR + 471,461 31,400 Indian Hotels, Ltd. 144A GDR + 910,600 55,600 Indian Petrochemicals Corp. Ltd. 144A ADR + 1,084,200 157,500 KEC International Ltd. 566,087 192,400 Salora International Ltd. 211,919 102,000 State Bank of India Ltd. 897,304 55,680 Telco 144A 988,320 -------------- 7,293,891 Indonesia (0.1%) - ------------------------------------------------------------------------------------------------ 432,600 PT Mulia Industrindo 836,205 90,000 Sampoerna Industries 995,482 -------------- 1,831,687 Ireland (2.7%) - ------------------------------------------------------------------------------------------------ 5,551,306 Allied Irish Banks PLC 28,878,171 3,061,097 CRH PLC 27,414,037 38,300 Elan Corp. PLC ADR + 2,532,588 6,581,192 Greencore Group PLC 31,263,130 -------------- 90,087,926 Italy (0.2%) - ------------------------------------------------------------------------------------------------ 1,404,840 Cartiere Burgo S.P.A. 8,034,085 Japan (18.3%) - ------------------------------------------------------------------------------------------------ 1,300,000 Bridgestone Corp. 24,019,049 74,200 Chubu Electric Power, Inc. 1,872,667 316,000 Cosmo Oil Co. Ltd. # 2,061,523 1,230,000 Dai Nippon Printing Co., Ltd. 23,077,144 1,819,000 Daiwa Securities Ltd. 27,891,335 3,900 East Japan Railway Co. 20,762,858 287,500 Hirose Electric Co. Ltd. 17,688,096 390,000 Ito Yokado Co., Ltd. 22,917,144 1,700,000 KAO Corp. 22,666,668 416,000 Komori Corp. 11,014,096 715,000 Kurita Water Ltd. 17,909,049 77,800 Kyushu Electric Power Inc. 1,926,476 1,053,000 Marui Co., Ltd. 23,166,001 2,424,000 Mitsubishi Motors Corp. 21,792,915 2,360,000 Mitsui Fudoscan Co. Ltd. 22,408,763 526,000 Murata Manufacturing Co. Ltd. 20,338,668 1,060,000 Nippon Express 11,003,810 2,368 Nippon Telegraph and Telephone Corp. 18,289,982 1,059,000 Nippondenso Co., Ltd. 22,995,430 955,000 Nishimatsu Construction Co. 11,187,143 1,100,000 Omron Tateisi Electronics Co. 24,723,811 389,000 Onward Kashiyama Co. Ltd. 6,557,429 473,000 Santen Pharmaceutical Co., Ltd. 11,036,667 225,000 Secom Co., Ltd. 15,857,144 1,569,000 Sekisui Chemical Co., Ltd. 19,724,572 1,330,000 Sharp Corp. 23,053,334 1,080,000 Shimizu Corp. 12,342,858 1,679,000 Tokio Marine & Fire Insurance Co. Ltd. 23,026,287 832,000 Tokyo Electric Power Co., Inc. 22,582,858 3,170,000 Toray Industries Inc. 21,495,620 610,000 Tostem Corp. 18,880,953 936,000 Yamanouchi Pharmaceutical Co. Ltd. 22,107,430 1,000,000 Yamatake Honeywell 18,857,144 1,023,000 Yamato Transport Co. Ltd. 12,470,858 410,000 Yasuda Fire & Marine Insurance Co., Ltd. 3,221,429 -------------- 600,927,211 Malaysia (0.8%) - ------------------------------------------------------------------------------------------------ 437,000 Hong Leong Industries Berhad 2,366,426 406,000 Leader Universal 1,196,992 380,000 Malayawata Steel Berhad 716,406 261,000 Malaysian Assurance Alliance 1,559,928 300,000 Malayan Banking Berhad 2,924,188 285,000 Maruichi Malaysia 1,103,189 4,620,000 Sime Darby Berhad 12,787,003 338,000 Southern Bank Berhad 833,815 169,000 Sungei Way Holdings Berhad 779,583 5,368 Tung Ho Steel GDR + 64,416 177,750 Ytl Corp. Berhad 891,245 -------------- 25,223,191 Mexico (0.2%) - ------------------------------------------------------------------------------------------------ 216,000 Apasco S.A. 1,174,737 990,000 Cifra S.A. de C.V. Class C + 1,320,000 32,050 International De Ceramica Spons ADR + 240,375 20,000 Panamerican Beverages Inc. Class A 877,500 143,000 Sears Roebuck de Mexico S.A. + 357,018 22,500 Telefonos de Mexico S.A. Class L ADR 765,000 11,562 Telemig (Telec De Minas Gerais) 945,335 -------------- 5,679,965 Morocco (--%) - ------------------------------------------------------------------------------------------------ 59,300 Banque Marocaine GDR 144A 882,088 Netherlands (6.4%) - ------------------------------------------------------------------------------------------------ 429,962 ABN AMRO Holding N.V. 22,263,648 457,247 Aegon N.V. 21,781,293 130,000 Akzo-Nobel N.V. 15,102,160 137,600 Dutch State Mines N.V. 14,057,210 488,386 Getronics Electric N.V. 33,927,574 128,500 Gucci Group + 6,987,188 600,000 IHC Caland N.V. 23,572,679 412,300 K.L.M.-Royal Dutch Airlines 13,839,609 606,000 Philips Electronics N.V. 21,402,802 422,400 Royal PTT 15,855,412 140,000 Unilever N.V. 19,107,998 -------------- 207,897,573 Norway (--%) - ------------------------------------------------------------------------------------------------ 100,000 Maritime Investment Fund Ltd. + 1,025,000 Pakistan (0.1%) - ------------------------------------------------------------------------------------------------ 82,695 Hubco Power GDR 1,984,680 62,530 Pakistan State Oil 578,193 5,700 Pakistan Telecomm Ltd. 144A GDR + 575,700 -------------- 3,138,573 Philippines (0.2%) - ------------------------------------------------------------------------------------------------ 23,210 Benpres Holdings Corp. 144A + 165,487 2,850,000 Bankard, Inc. + 1,581,516 1,900,000 Intl. Container Terminal Svcs. + 1,327,019 94,300 Philippine Commercial International 1,263,108 8,800 Philippine Long Distance Telephone Co. ADR 442,200 297,000 Pilipino Telephone Co. + 443,284 -------------- 5,222,614 Portugal (--%) - ------------------------------------------------------------------------------------------------ 107,300 Portucel Industrial Empresa S.A. 144A ADS 603,563 Russia (--%) - ------------------------------------------------------------------------------------------------ 15,000 Oil Co. Lukoil ADR 360,000 35,300 Mosenergo 144A ADS + 423,600 -------------- 783,600 Singapore (2.7%) - ------------------------------------------------------------------------------------------------ 995,000 Cycle & Carriage Ltd. 12,036,576 764,000 Development Bank of Singapore 9,677,080 1,187,200 Jardine Matheson Holdings Ltd. 9,497,600 2,465,000 Leader Universal 7,267,449 1,106,000 Malayan Banking Berhad 10,780,505 96,000 Overseas Union Bank Ltd. 744,610 1,490,000 Singapore Airlines Ltd. 15,055,860 310,000 Singapore Press Holdings. 5,867,786 1,863,082 United Overseas Bank Ltd. 18,162,829 -------------- 89,090,295 South Africa (0.1%) - ------------------------------------------------------------------------------------------------ 61,700 Energy Africa 740,400 1,006,324 Iscor Iron & Steel Industrial Corp. # 912,090 18,300 Nedcor Ltd. 144A GDR 45,750 74,284 Nedcor 1,012,120 14,592 Polifin Ltd. 27,328 28,145 South African Breweries Ltd. 813,439 97,194 Sasol Ltd. 1,024,751 -------------- 4,575,878 South Korea (0.2%) - ------------------------------------------------------------------------------------------------ 500,000 Cho Hung Bank Co. Ltd. 6,939,108 3,000 L.G. Chemical Ltd. 60,139 -------------- 6,999,247 Spain (2.1%) - ------------------------------------------------------------------------------------------------ 285,231 Banco de Bilbao-Vizcaya S.A. 10,838,504 363,000 Repsol S.A. 13,308,662 425,000 Repsol S.A. ADS 15,725,000 605,000 Tabacalera S.A. 27,577,792 -------------- 67,449,958 Sweden (2.3%) - ------------------------------------------------------------------------------------------------ 657,000 Astra AB Free + 29,181,718 154,230 Electrolux AB 7,770,575 430,000 Pharmacia & Upjohn, Inc. + 16,343,548 139,830 Sandvik AB Class B 3,079,638 1,048,510 Svenska Cellulosa Ser. B 19,771,550 -------------- 76,147,029 Switzerland (3.4%) - ------------------------------------------------------------------------------------------------ 12,060 BBC Brown Boveri & Cie AG Ltd. 14,503,022 28,970 Ciba-Geigy AG 33,557,693 8,280 Nestle S.A. 9,191,865 32,500 Rieter Holding AG 9,405,145 10,300 SGS Societe Generale De Surveillance Holdings S.A. 23,183,280 21,406 Swiss Reinsurance 22,369,614 -------------- 112,210,619 Taiwan (--%) - ------------------------------------------------------------------------------------------------ 38,849 Hocheng Group Corp. 144A GDR + 485,613 41,813 Yageo Corp 144A GDR + 397,224 -------------- 882,837 Thailand (0.2%) - ------------------------------------------------------------------------------------------------ 469,333 Industrial Finance Corp. 1,879,265 16,200 Siam Cement PLC 833,927 302,000 Siam Makro PLC 1,458,937 130,000 Thai Farmers Bank Public Co. 1,492,833 -------------- 5,664,962 United Kingdom (8.0%) - ------------------------------------------------------------------------------------------------ 1,200,000 Anglian Water PLC 10,460,214 2,246,484 Argyll Group PLC 11,228,511 3,069,628 B A T Industries PLC 23,222,158 1,418,538 Barclays Bank PLC 15,718,082 87,800 British Petroleum PLC ADR 9,592,150 1,060,603 Burmah Oil PLC 16,973,323 836,000 East Midlands Electric PLC + 7,891,409 3,937,500 Explaura Holdings PLC + 19,562 3,736,000 General Electric Co. (The) PLC 20,164,005 2,000,000 Guinness PLC 14,407,635 995,000 Molins PLC 15,504,015 618,182 North West Water Group PLC 5,528,198 2,536,574 Royal Insurance Holdings PLC 13,900,476 3,405,000 Scottish Power PLC 19,095,197 10,576,400 Sears PLC 16,002,384 272,000 Securicor Group PLC Class A 5,008,136 704,295 Security Services PLC 12,967,666 1,447,356 Siebe PLC 18,739,352 192,600 Smithkline Beecham PLC ADR 10,400,400 14 Tate & Lyle PLC 102 4,032,786 Vodafone Group PLC 16,119,459 -------------- 262,942,434 United States (28.8%) - ------------------------------------------------------------------------------------------------ 69,300 3Com Corp. + 3,196,463 45,400 Accustaff, Inc. + 1,350,650 49,300 Adaptec, Inc. + 2,834,750 51,900 Adtran, Inc. + 2,750,700 68,700 American Medical Response + 2,541,900 71,700 America Online, Inc. + 4,588,800 90,600 American International Group, Inc. 8,278,575 237,100 American Telephone & Telegraph Co. 14,522,375 119,700 Amgen, Inc. + 6,882,750 100,700 AON Corp. 5,400,038 79,500 Apollo Group, Inc. Class A 3,498,000 134,900 Ascend Communications, Inc. + 8,296,350 158,800 Bank of Boston Corp. 7,681,950 163,700 BankAmerica Corp. 12,400,275 164,100 Baxter International, Inc. 7,261,425 53,500 Biochem Pharmaceutical, Inc. + 2,434,250 65,600 Bisys Group, Inc. (The) + 2,509,200 97,500 BMC Industries, Inc. 2,608,125 163,700 Boeing Co. 13,443,863 67,700 Boston Chicken, Inc. + 2,166,400 257,900 Boston Scientific Corp. + 11,121,938 101,100 Burlington Northern Santa Fe Corp. 8,846,250 29,400 Cabletron Systems, Inc. + 2,216,025 107,100 Calenergy Inc. 2,784,600 34,700 Cambridge Technology Partners, Inc. + 2,333,575 41,300 Camco International Inc. 1,471,313 140,100 Campbell Soup Co. 8,756,250 63,700 Canandaigua Wine Co. Class A + 1,934,888 46,600 Cardinal Health, Inc. 2,924,150 88,700 Cascade Communications Corp. + 8,892,175 249,100 Case Corp. 12,579,550 136,400 Caterpillar, Inc. 8,729,600 55,400 Charter One Financial, Inc. 1,932,075 118,500 Chase Manhattan Corp. 8,161,688 216,900 Cisco Systems, Inc. + 11,251,688 138,300 Citicorp 10,891,125 44,900 Clear Channel Communications, Inc. + 3,041,975 150,800 Computer Associates Intl., Inc. 11,064,950 37,200 Congoleum Corp. Class A + 344,100 66,800 Corporate Express, Inc. + 2,496,650 31,800 Corrections Corp. of America 2,027,250 86,400 Credit Acceptance Corp. + 1,620,000 66,900 Dayton Hudson Corp. 6,388,950 121,900 Denamerica Corp. + 449,507 167,310 Disney (Walt) Productions, Inc. 10,373,220 69,500 DST Systems, Inc. + 2,554,125 158,600 du Pont (E.I.) de Nemours & Co., Ltd. 12,747,475 116,200 Eastman Kodak Co. 8,889,300 54,900 Eckerd Corp. + 2,621,475 48,300 Electronics for Imaging, Inc. + 2,946,300 157,700 Enron Corp. 6,347,425 139,600 Equifax, Inc. 3,420,200 192,600 Federated Department Stores Inc. + 6,428,025 62,900 Finova Group, Inc. 3,490,950 89,100 First Brands Corp. 2,361,150 133,002 First Data Corp. 10,108,152 9,600 Fluor Corp. 634,800 100,700 Franklin Resources, Inc. 5,765,075 183,900 Freeport-McMoRan Copper & Gold Co., Inc. Class A 5,815,838 54,300 Fritz Companies, Inc. + 1,995,525 108,300 Gannett Co., Inc. 7,405,013 76,400 Gartner Group Inc. Class A + 2,616,700 180,100 General Motors Corp. Class E 10,153,138 107,900 General Motors Corp. Class H 6,595,388 145,600 General Nutrition Companies, Inc. + 2,839,200 54,750 Genesis Health Ventures, Inc. + 1,621,969 244,300 GTE Corp. 10,596,513 49,100 Guidant Corp. 2,755,738 192,200 Halliburton Co. 11,027,475 267,200 Harrah's Entertainment Inc. + 9,218,400 63,900 HBO & Co. 7,588,125 67,200 Health Care & Retirement Corp. + 2,478,000 86,950 Health Management Assoc., Inc. (New) + 2,782,400 54,800 Healthsource, Inc. + 1,870,050 43,800 Heritage Media Corp. Class A + 1,680,825 101,100 Hershey Foods Corp. 7,670,963 114,000 Hewlett-Packard Co. 12,069,750 87,000 HFS, Inc. + 4,469,625 165,300 Home Depot, Inc. (The) 7,831,088 223,800 Honeywell, Inc. 11,777,475 107,368 ICN Pharmaceuticals, Inc. 2,415,780 58,400 IDEXX Laboratories, Inc. + 2,598,800 190,300 Informix Corp. + 5,019,163 97,600 Intel Corp. 6,612,400 133,000 Johnson & Johnson 12,302,500 85,900 LCI International, Inc. + 2,233,400 169,400 Lilly (Eli) & Co. 9,994,600 103,700 Lockheed Martin Corp. 8,360,813 39,200 Manpower, Inc. 1,450,400 110,900 Marriott International, Inc. 5,406,375 212,500 MBNA Corp. 6,029,688 31,150 McAfee Associates, Inc. + 1,907,938 234,800 McDonald's Corp. 11,241,050 446,000 MCI Communications Corp. 13,129,125 23,900 Medic Computer Systems, Inc. + 2,234,650 127,300 Medtronic, Inc. 6,762,813 106,600 Mentor Corp. Minnesota 2,518,425 133,300 Microsoft Corp. + 15,112,512 188,300 Mirage Resorts, Inc. + 9,862,213 96,500 Mobil Corp. 11,097,500 48,600 Monsanto Co. 7,362,900 112,800 Morgan (J.P.) & Co., Inc. 9,489,300 43,300 Nabisco Holdings Corp. Class A 1,326,063 106,000 NationsBank Corp. 8,453,500 96,500 Nike, Inc. 8,443,750 58,100 Nine West Group Inc. + 2,491,038 44,600 Octel Communications Corp. + 1,995,850 207,300 Officemax, Inc. + 5,441,625 48,500 Omnicare, Inc. 2,910,000 57,100 Omnicom Group, Inc. 2,476,713 154,400 Oxford Health Plans Inc. + 7,797,200 27,500 Pacificare Health Systems, Inc. Class B + 2,306,563 113,500 Paging Network, Inc. + 2,667,250 312,700 Parametric Technology Corp. + 12,586,175 57,700 Paychex, Inc. 3,909,175 72,100 PeopleSoft, Inc. + 4,542,300 218,400 PepsiCo, Inc. 13,868,400 125,700 Pfizer, Inc. 8,657,588 306,760 Pharmacia & Upjohn, Inc. 11,733,570 156,500 Philip Morris Cos., Inc. 14,104,563 22,800 Physician Reliance Network+ 986,100 53,000 Physician Sales & Service, Inc. + 1,431,000 251,700 Praxair, Inc. 9,721,913 50,400 Premisys Communications, Inc. + 2,205,000 66,900 Primark Corp. + 2,374,950 30,700 Quintiles Transnational Corp. + 2,248,775 74,300 Reynolds & Reynolds Co. Class A 3,436,375 32,000 Robert Half International, Inc. + 1,840,000 309,200 Safeway, Inc. + 10,435,500 51,900 Sanifill, Inc. + 2,251,163 187,700 SBC Communications, Inc. 9,385,000 258,700 Sears, Roebuck & Co. 12,902,663 114,700 Service Corp. 6,093,438 54,100 Sherwin Williams Co. 2,529,175 46,400 Shiva Corp. + 2,772,400 133,200 Sonat, Inc. 5,810,850 6,600 St. John Knits, Inc. 391,875 365,450 Staples, Inc. + 6,943,550 40,500 Sterling Commerce Inc. + 1,417,500 57,800 Stewart Enterprises, Inc. Class A 2,644,350 44,300 Stryker Corp. 2,143,013 42,500 Sun Bancorp, Inc. + 747,150 237,000 Sundstrand Corp. 8,709,750 71,700 Symbol Technologies, Inc. + 3,316,125 47,200 Synopsys, Inc. + 1,947,000 63,700 TCF Financial Corp. 2,253,388 189,500 Tele-Comm Liberty Media Group, Inc. Class A + 5,187,563 172,200 Tellabs, Inc. + 9,514,050 71,800 Textron, Inc. 6,156,850 44,800 The PMI Group, Inc. 1,904,000 74,700 The Sports Auth., Inc. + 2,222,325 60,200 Thermo Electron Corp. + 3,709,825 311,700 TJX Cos., Inc. (The) 9,195,150 44,800 Tommy Hilfiger Corp. + 2,038,400 170,300 Travelers Group Inc. 10,473,450 114,400 U.S. Filter Corp. + 3,517,800 65,400 U.S. Robotics Corp. + 10,235,100 67,100 U.S. Surgical Corp. 2,482,700 118,500 United Healthcare Corp. 6,932,250 66,100 United Technologies Corp. 7,304,050 31,500 United Waste Systems, Inc. + 1,732,500 40,000 Unum Corp. 2,380,000 46,800 Vencor, Inc. + 1,579,500 83,100 Vons Co. + 2,659,200 210,500 Walgreen Co. 6,736,000 88,500 Warner-Lambert Co. 9,889,875 105,400 Whitman Corporation 2,661,350 27,100 Wisconsin Central Transportation Co. + 2,289,950 -------------- 945,047,540 Venezuela (--%) - ------------------------------------------------------------------------------------------------ 225,040 Venepal 144A GDR 478,210 184,000 Venezolana de Prerreducidos Caroni Venprecar 1,035,000 -------------- 1,513,210 -------------- Total Common Stocks (cost $2,482,345,438) $3,037,324,186 PREFERRED STOCKS (0.1%) * NUMBER OF SHARES VALUE - ------------------------------------------------------------------------------------------------ 138,200 Banco Bradesco BRC 0.12 NPV (No Par Value) pfd. (Brazil) $ 1,560,480 3,880 Coteminas Cia Tecidos Norte de Minas BRC 9.64 NPV pfd. (Brazil) 1,627,261 24,700 Companhia Vale Do Rio Doce BRC 2.307 NPV pfd. (Brazil) 697,248 228,000 Refrigeracao Parna S.A. BRC 0.0463 NPV pfd. (Brazil) 567,759 -------------- Total Preferred Stocks (cost $3,691,132) $ 4,452,748 INVESTMENT COMPANIES (0.2%) * NUMBER OF SHARES VALUE - ------------------------------------------------------------------------------------------------ 104,200 Fleming Russia Securities Fund Ltd. (Russia)+ $ 690,325 21,800 India Magnum Fund Class A (India)+ 1,199,000 3,250 Nordic Recovery Fund N.V. (Sweden)+ 4,241,250 -------------- Total Investment Companies (cost $5,416,790) $ 6,130,575 SHORT-TERM INVESTMENTS (7.0%)* PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------ $20,000,000 Ciesco Inc. effective yield of 5.32s, May 22, 1996 $ 19,937,933 25,000,000 Federal National Mortgage Association effective yield of 5.20s, July 12, 1996 24,740,000 15,000,000 Federal National Mortgage Association effective yield of 5.14s, May 3, 1996 14,995,717 20,000,000 Ford Motor Credit Co. effective yield of 5.07s, June 6, 1996 19,898,600 25,000,000 General Motors Acceptance Corp. effective yield of 5.35s, May 28, 1996 24,899,688 20,000,000 Morgan (J.P.) & Co., Inc. effective yield of 5.06s, May 7, 1996 19,983,133 20,000,000 Walt Disney Corp. effective yield of 5.26s, May 31, 1996 19,912,333 25,030,000 Walt Disney Corp. effective yield of 5.25s, May 20, 1996 24,930,922 59,849,000 Interest in $500,000,000 joint repurchase agreement dated April 30, 1996 with Lehman Brothers Inc. due May 1, 1996 with respect to various U.S. Treasury obligations -- maturity value of $59,857,894 for an effective yield of 5.30% 59,857,894 -------------- Total Short-Term Investments (cost $229,156,220) $ 229,156,220 -------------- Total Investments (cost $2,720,609,580)*** $3,277,063,729 - ------------------------------------------------------------------------------------------------ * Percentages indicated are based on net assets of $3,289,017,470. + Non-income producing security. # Forward commitment (Note 1) *** The aggregate identified cost on a tax basis is $2,731,485,729, resulting in gross unrealized appreciation and depreciation of $668,773,289 and $123,195,289, respectively, or net unrealized appreciation of $545,578,000. ADR, ADS, or GDR, after the name of a holding stands for American Depository Receipt, American Depository Shares or Global Depository Receipt, respectively, representing ownership of foreign securities on deposit with a domestic custodian bank. 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. - ------------------------------------------------------------------------------------------------ Forward Currency Contracts to Sell at April 30, 1996 (aggregate face value $556,246,338) Market Aggregate Face Delivery Unrealized Value Value Date Appreciation - ------------------------------------------------------------------------------------------------ British Pounds $108,526,405 $111,232,717 5/31/96 $2,706,312 French Francs 79,757,853 83,567,019 5/31/96 3,809,166 Japan Yen 358,349,640 361,446,602 7/17/96 3,096,962 - ------------------------------------------------------------------------------------------------ $9,612,440 - ------------------------------------------------------------------------------------------------ The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities April 30, 1996 (Unaudited) Assets - ----------------------------------------------------------------------------- Investments in securities, at value (identified cost $ 2,720,609,580) (Note 1) $3,277,063,729 - ----------------------------------------------------------------------------- Cash 2,742,269 - ----------------------------------------------------------------------------- Foreign currency (cost $ 442,760) 409,443 - ----------------------------------------------------------------------------- Dividends and interest receivable 7,481,374 - ----------------------------------------------------------------------------- Receivable for shares of the fund sold 8,686,819 - ----------------------------------------------------------------------------- Receivable for securities sold 11,269,557 - ----------------------------------------------------------------------------- Foreign tax reclaim 2,914,423 - ----------------------------------------------------------------------------- Receivable for open forward currency contracts 9,612,440 - ----------------------------------------------------------------------------- Receivable for closed forward currency contracts 2,317,238 - ----------------------------------------------------------------------------- Total assets 3,322,497,292 Liabilities - ----------------------------------------------------------------------------- Payable for securities purchased 20,783,329 - ----------------------------------------------------------------------------- Payable for shares of the fund repurchased 3,498,968 - ----------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 5,047,537 - ----------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 2,277,606 - ----------------------------------------------------------------------------- Payable for compensation of Trustees (Note 2) 6,897 - ----------------------------------------------------------------------------- Payable for administrative services (Note 2) 3,713 - ----------------------------------------------------------------------------- Payable for distribution fees (Note 2) 1,381,338 - ----------------------------------------------------------------------------- Other accrued expenses 480,434 - ----------------------------------------------------------------------------- Total liabilities 33,479,822 - ----------------------------------------------------------------------------- Net assets $3,289,017,470 Represented by - ----------------------------------------------------------------------------- Paid-in-capital (Notes 1 and 4) 2,651,251,296 - ----------------------------------------------------------------------------- Distributions in excess of net investment income (Note 1) (18,182,648) - ----------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions (Note 1) 90,031,884 - ----------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 565,916,938 - ----------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $3,289,017,470 Computation of net asset value and offering price - ----------------------------------------------------------------------------- Net asset value and redemption price per class A share ($2,009,743,519 divided by 186,607,487 shares) $10.77 - ----------------------------------------------------------------------------- Offering price per class A share (100/94.25 of $10.77)* $11.43 - ----------------------------------------------------------------------------- Net asset value and offering price per class B share ($1,208,963,459 divided by 115,176,787 shares)+ $10.50 - ----------------------------------------------------------------------------- Net asset value and redemption price per class M share ($13,972,260 divided by 1,300,299 shares) $10.75 - ----------------------------------------------------------------------------- Offering price per class M share (100/96.50 of $10.75)* $11.14 - ----------------------------------------------------------------------------- Net asset value, redemption and offering price per class Y share ($56,338,232 divided by 5,172,757 shares) $10.89 - ----------------------------------------------------------------------------- * 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, 1996 (Unaudited) Investment Income: - ----------------------------------------------------------------------------- Dividends (net of foreign tax of $2,070,443) $21,869,722 - ----------------------------------------------------------------------------- Interest 5,385,584 - ----------------------------------------------------------------------------- Total investment income 27,255,306 Expenses: - ----------------------------------------------------------------------------- Compensation of Manager (Note 2) 9,751,338 - ----------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 4,790,818 - ----------------------------------------------------------------------------- Compensation of Trustees (Note 2) 41,066 - ----------------------------------------------------------------------------- Administrative services (Note 2) 22,198 - ----------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 2,284,599 - ----------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 5,392,857 - ----------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 35,398 - ----------------------------------------------------------------------------- Reports to shareholders 120,072 - ----------------------------------------------------------------------------- Auditing 39,537 - ----------------------------------------------------------------------------- Legal 22,776 - ----------------------------------------------------------------------------- Other 115,338 - ----------------------------------------------------------------------------- Total expenses 22,615,997 - ----------------------------------------------------------------------------- Expense reduction (Note 2) (287,535) - ----------------------------------------------------------------------------- Net expenses 22,328,462 - ----------------------------------------------------------------------------- Net investment income 4,926,844 - ----------------------------------------------------------------------------- Net realized gain on investments (Notes 1 and 3) 63,593,840 - ----------------------------------------------------------------------------- Net realized gain on forward currency contracts and foreign currency translation (Note 1) 37,332,300 - ----------------------------------------------------------------------------- Net unrealized depreciation on forward currency contracts and foreign currency translation during the period (7,520,874) - ----------------------------------------------------------------------------- Net unrealized appreciation on investments during the peri 252,117,627 - ----------------------------------------------------------------------------- Net gain on investments 345,522,893 - ----------------------------------------------------------------------------- Net increase in net assets resulting from operations $350,449,737 - ----------------------------------------------------------------------------- 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 1996* 1995 - -------------------------------------------------------------------------------------------------- Increase in net assets - -------------------------------------------------------------------------------------------------- Operations: - -------------------------------------------------------------------------------------------------- Net investment income $4,926,844 $19,339,153 - -------------------------------------------------------------------------------------------------- Net realized gain on investments and foreign currency transactions 100,926,140 100,455,864 - -------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 244,596,753 26,307,148 - -------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 350,449,737 146,102,165 - -------------------------------------------------------------------------------------------------- Distributions to shareholders - -------------------------------------------------------------------------------------------------- From net investment income Class A (29,544,233) (1,159,070) - -------------------------------------------------------------------------------------------------- Class B (11,187,413) (644,782) - -------------------------------------------------------------------------------------------------- Class M (95,055) -- - -------------------------------------------------------------------------------------------------- Class Y (836,208) (22,144) - -------------------------------------------------------------------------------------------------- From net realized gain on investments Class A (68,153,175) (46,984,247) - -------------------------------------------------------------------------------------------------- Class B (40,919,727) (26,094,046) - -------------------------------------------------------------------------------------------------- Class M (292,366) -- - -------------------------------------------------------------------------------------------------- Class Y (1,697,504) (896,166) - -------------------------------------------------------------------------------------------------- Increase from capital share transactions (Note 4) 377,409,359 305,193,194 - -------------------------------------------------------------------------------------------------- Total increase in net assets 575,133,415 375,494,904 - -------------------------------------------------------------------------------------------------- Net Assets - -------------------------------------------------------------------------------------------------- Beginning of period 2,713,884,055 2,338,389,151 - -------------------------------------------------------------------------------------------------- End of period (including distributions in excess of net investment income and undistributed net investment income of $18,182,648 and $18,553,417, respectively) $3,289,017,470 $2,713,884,055 - -------------------------------------------------------------------------------------------------- * Unaudited The accompanying notes are an integral part of these financial statements.
Financial highlights (For a share outstanding throughout the period) March 1, 1995 June 15, 1994 Six months (commencement Six months (commencement ended of operations) to ended Year ended of operations) to April 30 October 31 April 30 October 31 October 31 - ------------------------------------------------------------------------------------------------------------------- 1996*+ 1995 1996*+ 1995 1994 - ------------------------------------------------------------------------------------------------------------------- Class M Class Y - ------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $10.09 $8.86 $10.25 $10.00 $9.46 - ------------------------------------------------------------------------------------------------------------------- Investment operations - ------------------------------------------------------------------------------------------------------------------- Net investment income .01 .01 .04 .09 .01 - ------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 1.19 1.22 1.21 .47 .53 - ------------------------------------------------------------------------------------------------------------------- Total from investment operations 1.20 1.23 1.25 .56 .54 - ------------------------------------------------------------------------------------------------------------------- Less distributions: - ------------------------------------------------------------------------------------------------------------------- From net investment income (.13) -- (.20) (.01) -- - ------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (.41) -- (.41) (.30) -- - ------------------------------------------------------------------------------------------------------------------- Total distributions (.54) -- (.61) (.31) -- - ------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $10.75 $10.09 $10.89 $10.25 $10.00 - ------------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) 12.41(b) 13.88(b) 12.77(b) 6.00 5.71(b) - ------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $13,972 $5,853 $56,338 $42,582 $29,396 - ------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(c) .98(b) 1.23(b) .50(b) 1.06 .37(b) - ------------------------------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) .06(b) .17(b) .43(b) 1.20 .42(b) - ------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 33.13(b) 63.31 33.13(b) 63.31 17.45 - ------------------------------------------------------------------------------------------------------------------- Average commission rate paid (d) $.0380 -- $.0380 -- -- - ------------------------------------------------------------------------------------------------------------------- See page 27 for notes to financial highlights.
Financial highlights (For a share outstanding throughout the period) Six months ended Year ended April 30 October 31 - -------------------------------------------------------------------------------------------- 1996*+ 1995 1994 1993 - -------------------------------------------------------------------------------------------- Class B - -------------------------------------------------------------------------------------------- Net asset value, beginning of period $9.86 $9.74 $9.19 $7.22 - -------------------------------------------------------------------------------------------- Investment operations - -------------------------------------------------------------------------------------------- Net investment income (.01) .03 .01 .05 - -------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 1.17 .40 .71 1.99 - -------------------------------------------------------------------------------------------- Total from investment operations 1.16 .43 .72 2.04 - -------------------------------------------------------------------------------------------- Less distributions: - -------------------------------------------------------------------------------------------- From net investment income (.11) (.01) -- (.06) - -------------------------------------------------------------------------------------------- From net realized gain on investments (.41) (.30) (.17) (.01) - -------------------------------------------------------------------------------------------- Total distributions (.52) (.31) (.17) (.07) - -------------------------------------------------------------------------------------------- Net asset value, end of period $10.50 $9.86 $9.74 $9.19 - -------------------------------------------------------------------------------------------- Total investment return at net asset value (%) (a) 12.26(b) 4.80 7.95 28.44 - -------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $1,208,963 $975,794 $801,443 $233,195 - -------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(c) 1.00(b) 2.04 2.11 2.09 - -------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) (.07)(b) .29 .12 .23 - -------------------------------------------------------------------------------------------- Portfolio turnover (%) 33.13(b) 63.31 17.45 49.53 - -------------------------------------------------------------------------------------------- Average commission rate paid (d) .0380 -- -- -- - -------------------------------------------------------------------------------------------- Financial highlights (Continued) (For a share outstanding throughout the period) April 27, 1992 (Commencement Six months of operations) ended Year ended to October 31 April 30 October 31 - -------------------------------------------------------------------------------------------- 1992 1996*+ 1995 1994 - -------------------------------------------------------------------------------------------- Class A - -------------------------------------------------------------------------------------------- Net asset value, beginning of period $7.50 $10.13 $9.92 $9.30 - -------------------------------------------------------------------------------------------- Investment operations - -------------------------------------------------------------------------------------------- Net investment income .01 .03 .09 .02 - -------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments (.29) 1.19 .43 .77 - -------------------------------------------------------------------------------------------- Total from investment operations (.28) 1.22 .52 .79 - -------------------------------------------------------------------------------------------- Less distributions: - -------------------------------------------------------------------------------------------- From net investment income -- (.17) (.01) -- - -------------------------------------------------------------------------------------------- From net realized gain on investments -- (.41) (.30) (.17) - -------------------------------------------------------------------------------------------- Total distributions -- (.58) (.31) (.17) - -------------------------------------------------------------------------------------------- Net asset value, end of period $7.22 $10.77 $10.13 $9.92 - -------------------------------------------------------------------------------------------- Total investment return at net asset value (%) (a) (3.73)(b) 12.65(b) 5.64 8.62 - -------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $18,154 $2,009,744 $1,689,656 $1,507,550 - -------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(c) 1.16(b) .63(b) 1.28 1.33 - -------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) .21(b) .30(b) 1.05 .83 - -------------------------------------------------------------------------------------------- Portfolio turnover (%) 61.84 33.13(b) 63.31 17.45 - -------------------------------------------------------------------------------------------- Average commission rate paid (d) -- .0380 -- -- - -------------------------------------------------------------------------------------------- Financial highlights (Continued) (For a share outstanding throughout the period) Year ended October 31 - ---------------------------------------------------------------------------- 1993 1992 1991 - ---------------------------------------------------------------------------- Class A - ---------------------------------------------------------------------------- Net asset value, beginning of period $7.25 $7.64 $7.12 - ---------------------------------------------------------------------------- Investment operations - ---------------------------------------------------------------------------- Net investment income .07 .10 .12 - ---------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 2.06 (.22) .96 - ---------------------------------------------------------------------------- Total from investment operations 2.13 (.12) 1.08 - ---------------------------------------------------------------------------- Less distributions: - ---------------------------------------------------------------------------- From net investment income (.07) (.12) (.15) - ---------------------------------------------------------------------------- From net realized gain on investments (.01) (.15) (.41) - ---------------------------------------------------------------------------- Total distributions (.08) (.27) (.56) - ---------------------------------------------------------------------------- Net asset value, end of period $9.30 $7.25 $7.64 - ---------------------------------------------------------------------------- Total investment return at net asset value (%) (a) 29.62 (1.51) (16.51) - ---------------------------------------------------------------------------- Net assets, end of period (in thousands) $940,985 $630,764 $684,450 - ---------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(c) 1.39 1.56 1.47 - ---------------------------------------------------------------------------- Ratio of net investment income to average net assets (%) .85 1.28 1.60 - ---------------------------------------------------------------------------- Portfolio turnover (%) 49.53 61.84 70.64 - ---------------------------------------------------------------------------- Average commission rate paid (d) -- -- -- - ---------------------------------------------------------------------------- * Unaudited. + Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period. (a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Not annualized. (c) The ratio of expenses to average net assets for the period ended October 31, 1995 and thereafter includes amounts paid through brokerage service and expense offset arrangements. Prior period ratios exclude these amounts. (Note 2) (d) Average commission rate paid is presented for fiscal periods beginning on or after September 1, 1995 in conformance with requirements issued by the SEC.
Notes to financial statements April 30, 1996 (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 markets 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. 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 eight years, 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 shares are redeemed within approximately six years of purchase. Class M shares are sold with a maximum front end sales charge of 3.50% and pay an ongoing distribution fee that is higher than class A shares but lower than class B shares. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A shares and class B shares, but do not bear a distribution fee. Class Y shares are sold to defined contribution plans that initially invest at least $250 million in a combination of Putnam Funds. 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 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. Securities quoted in foreign currencies are translated into U.S. dollars at the current exchange rate. Gains and losses that arise from changes in market prices of investments. The effects on net investment income arising from changes in exchange rates are also not segregated. Short-term investments having remaining maturities of 60 days or less are stated at amortized cost which approximates market, and other investments are stated at fair value following procedures approved by the Trustees. Securities purchased or sold on a forward commitment or delayed delivery basis may be settled a month or more after the trade date; interest income is not accrued until settlement date. The fund instructs the custodian to segregate assets in a separate account with a current value at least equal to the amount of its forward commitment purchase commitment. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract. 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 managed by Putnam Investment Management, Inc. ("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc. and certain other 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 custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. D) Security transactions and related investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the fund is informed of the ex-dividend date. E) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, other assets and liabilities are recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when accrued or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such fluctuations are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net exchange gains or losses on closed forward currency contracts, disposition of foreign currencies and the difference between the amount of investment income and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized gains and losses on foreign currency transactions arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. F) Forward currency contracts The fund may engage in forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date, to protect against a decline in value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of a currency in which securities a fund intends to buy are denominated, when a fund holds cash reserves and short-term investments). The U.S. dollar value of forward currency contracts is determined using forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is "marked to market" daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. G) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held and for excise tax on income and capital gains. H) Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Capital gain distributions, if any, are recorded on the ex-dividend date and paid annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. 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 managment and investment advisory services is paid quarterly based on the average net assets of the fund. Such fee is based on the following annual rates: 0.80% of the first $500 million of average net assets, 0.70% of the next $500 million, 0.65% of the next $500 million, 0.60% of any amount over $1.5 billion subject, under current law, to reduction in any year to the extent that expenses (exclusive of 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 excess over $100 million and by the amount of certain brokerage commissions and fees (less expenses) received by affiliates of Putnam Management on the fund's portfolio transactions. The fund reimburses Putnam Management for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. Trustees of the fund receive an annual Trustees fee of $4,770 and an additional fee for each Trustee's meeting attended. Trustees who are not interested persons of Putnam Management and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. The fund adopted a Trustee Fee Deferral Plan (the "Plan") which allows the Trustees to defer the receipt of all or a portion of Trustees Fees payable on or after July 1, 1995. The deferred fees remain in the fund and are invested in the fund or in other Putnam funds until distribution in accordance with the Plan. Custodial functions for the fund's assets are provided by Putnam Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc. Investor servicing agent functions are provided by Putnam Investor Services, a division of PFTC. For the six months ended April 30, 1996, fund expenses were reduced by $287,535 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. The fund has adopted distribution plans (the "Plans") with respect to its class A, class B and class M shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments Inc., for services provided and expenses incurred by it in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets attributable to class A, class B and class M shares, respectively. The Trustees 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, 1996, Putnam Mutual Funds Corp., acting as underwriter received net commissions of $592,969 and $15,969 from the sale of class A and class M shares, respectively and $779,996 in contingent deferred sales charges from redemptions of class B shares. A deferred sales charge of up to 1% is assessed on certain redemptions of class A shares. For the six months ended April 30, 1996, Putnam Mutual Funds Corp., acting as underwriter received $15,290 on class A redemptions. Note 3 Purchases and sales of securities During the six months ended April 30, 1996, purchases and sales of investment securities other than short-term investments aggregated $1,649,468,562 and $925,123,489, 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 April 30, 1996, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Six months ended April 30, 1996 - ---------------------------------------------------- Class A Shares Amount - ---------------------------------------------------- Shares sold 38,100,355 $392,349,839 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 9,383,632 91,678,073 - ---------------------------------------------------- 47,483,987 484,027,912 Shares repurchased (27,681,447) (285,053,643) - ---------------------------------------------------- Net increase 19,802,540 $198,974,269 - ---------------------------------------------------- Year ended October 31, 1995 - ---------------------------------------------------- Class A Shares Amount - ---------------------------------------------------- Shares sold 68,492,496 $649,257,185 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 4,941,635 44,870,047 - ---------------------------------------------------- 73,434,131 694,127,232 Shares repurchased (58,666,136) (560,108,246) - ---------------------------------------------------- Net increase 14,767,995 $134,018,986 - ---------------------------------------------------- Six months ended April 30, 1996 - ---------------------------------------------------- Class B Shares Amount - ---------------------------------------------------- Shares sold 21,248,424 $213,831,170 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 5,083,323 48,545,746 - ---------------------------------------------------- 26,331,747 262,376,916 Shares repurchased (10,138,565) (101,914,369) - ---------------------------------------------------- Net increase 16,193,182 $160,462,547 - ---------------------------------------------------- Year ended October 31, 1995 - ---------------------------------------------------- Class B Shares Amount - ---------------------------------------------------- Shares sold 36,604,976 $339,453,881 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 2,773,499 24,656,265 - ---------------------------------------------------- 39,378,475 364,110,146 Shares repurchased (22,718,652) (210,414,554) - ---------------------------------------------------- Net increase 16,659,823 $153,695,592 - ---------------------------------------------------- Six months ended April 30, 1996 - ---------------------------------------------------- Class M Shares Amount - ---------------------------------------------------- Shares sold 801,569 $8,269,284 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 37,518 366,553 - ---------------------------------------------------- 839,087 8,635,837 Shares repurchased (118,655) (1,220,182) - ---------------------------------------------------- Net increase 720,432 $7,415,655 - ---------------------------------------------------- For the period March 1, 1995 (commencement of operations) to October 31, 1995 - ---------------------------------------------------- Class M Shares Amount - ---------------------------------------------------- Shares sold 618,124 $6,076,061 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - ---------------------------------------------------- 618,124 6,076,061 Shares repurchased (38,257) (382,704) - ---------------------------------------------------- Net increase 579,867 $5,693,357 - ---------------------------------------------------- Six months ended April 30, 1996 - ---------------------------------------------------- Class Y Shares Amount - ---------------------------------------------------- Shares sold 1,528,852 $15,994,261 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 256,730 2,533,712 - ---------------------------------------------------- 1,785,582 18,527,973 Shares repurchased (767,719) (7,971,085) - ---------------------------------------------------- Net increase 1,017,863 $10,556,888 - ---------------------------------------------------- Year ended October 31, 1995 - ---------------------------------------------------- Class Y Shares Amount - ---------------------------------------------------- Shares sold 2,547,793 $24,844,353 - ---------------------------------------------------- Shares issued in connection with reinvestment of distributions 100,142 918,308 - ---------------------------------------------------- 2,647,935 25,762,661 Shares repurchased (1,433,258) (13,977,402) - ---------------------------------------------------- Net increase 1,214,677 $11,785,259 - ---------------------------------------------------- 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 Voyager Fund II PUTNAM GROWTH AND INCOME FUNDS Balanced Retirement Fund Convertible Income-Growth Trust Equity Income Fund The George Putnam Fund of Boston The Putnam Fund for Growth and Income Growth and Income Fund II Utilities Growth and Income Fund PUTNAM INCOME FUNDS Adjustable Rate U.S. Government Fund American Government Income Fund Diversified Income Trust Federal Income Trust Global Governmental 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 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 LIFESTAGESM 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 INVESTMENT+ 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++ * Not available in all states. + Relative to above. ++ Not offerred by Puttnam 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, including charges and expenses. Please read it carefully before you invest or send money. Our commitment to quality service * CHOOSE AWARD-WINNING SERVICE Putnam Investor Services has won the DALBAR Quality Tested Service Seal for the past six years. In 1995, over 146,000 tests of 56 shareholder service components demonstrated that Putnam outperformed the industry standard in every category. * HELP YOUR INVESTMENT 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 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 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 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. 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 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 Peter Carman Vice President Brett C. Browchuk Vice President Anthony W. Regan Vice President and Fund Manager Carol C. McMullen Vice President and Fund Manager William N. Shiebler Vice President John R. Verani Vice President Paul M. O'Neil Vice President Beverly Marcus Clerk and Assistant Treasurer This report is for the information of shareholders of Putnam Global Growth 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. 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. Putnam Investments The Putnam Funds One Post Office Square Boston, Massachusetts 02109 - ------------------- Bulk Rate U.S. Postage PAID Putnam Investments - ------------------- 25118-005/882/907 6/96 PUTNAM INVESTMENTS [SCALE LOGO OMITTED] - ------------------------------------------------------------------------- Putnam Global Growth Fund Supplement to Semiannual Report dated 4/30/96 The following information has been prepared to provide class Y shareholders with a performance overview specific to their holdings. Class Y shares are offered exclusively to defined contribution plans investing $250 million or more in one or more of Putnam's funds or private accounts. Performance of class Y shares, which incur neither a front-end load, distribution fee, nor contingent deferred sales charge, will differ from performance of class A, B, and M shares, which are discussed more extensively in the semiannual report. SEMIANNUAL RESULTS AT A GLANCE - ------------------------------------------------------------------------- Total return: NAV Six months ended 4/30/96 12.77% One year ended 4/30 /96 22.57 Life of class (since 6/15/94) 26.49 Annual average 12.74 - ------------------------------------------------------------------------- Share value: NAV 10/31/95 $10.25 4/30/96 10.89 - ------------------------------------------------------------------------- Distributions: No. Income Capital gains Total 1 $0.2000 $0.406 $0.606 - ------------------------------------------------------------------------- Please note that past performance does not indicate future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. See full report for information on comparative benchmarks. If you have questions, please consult your fund prospectus or call Putnam toll free at 1-800-752-9894. -----END PRIVACY-ENHANCED MESSAGE-----