-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QlofbXbKs4wyOdG0Cwp0+GYDrwjvO2Vje+eucm4J/dA0/jaFTutRfCYj+FyxzJ4C GFGl1l38J0RRn1BDV9OC5Q== 0000950146-95-000002.txt : 19950508 0000950146-95-000002.hdr.sgml : 19950508 ACCESSION NUMBER: 0000950146-95-000002 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941031 FILED AS OF DATE: 19950106 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: 95500482 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ STREET 2: MAILSTOP A14 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921000 MAIL ADDRESS: ZIP: ----- FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM INTERNATIONAL EQUITIES FUND DATE OF NAME CHANGE: 19900722 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM INTERNATIONAL EQUITIES FUND INC /PRED/ DATE OF NAME CHANGE: 19821109 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM EQUITIES FUND INC DATE OF NAME CHANGE: 19790906 N-30D 1 PUTNAM GLOBAL GROWTH FUND ANNUAL REPORT Putnam Global Growth Fund ANNUAL REPORT October 31, 1994 (Graphic- Balance Scales) B O S T O N * L O N D O N * T O K Y O Performance highlights > Morningstar, an independent mutual fund rating company, gave the fund's class A shares a rating of four stars (out of five possible), for risk-adjusted performance as of October 31, 1994.* > "We will continue to position this fund to provide an opportunity to access potential economic growth in the United States and around the world. We will pursue a diverse range of opportunities, while attempting to minimize the inherent risks in overseas investing." --Anthony Regan, fund manager > 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. FISCAL 1994 RESULTS AT A GLANCE
Class A Class B Total return NAV POP NAV CDSC ................................................................................................. (Change in value during period plus reinvested distributions) 12 months ended 10/31/94 8.62% 2.34 % 7.95 % 2.95% Share value NAV POP NAV ................................................................................................. 10/31/93 $9.30 $ 9.87 $9.19 10/31/94 9.92 10.53 9.74 Capital gains Distributions Long- Short- No. Income term term Total ................................................................................................. Class A 1 -- $ 0.151 $0.021 $0.172 Class B 1 -- 0.151 $0.021 0.172
Performance data represent past results and will differ for each share class. For performance over longer periods, see pages 8 and 9. POP assumes 5.75% maximum sales charge. CDSC assumes 5% maximum contingent deferred sales charge. *Morningstar, Inc., is an independent research firm that rates funds relative to funds with similar objectives, based on risk-adjusted medium- and long-term performance, as applicable, and adjusted for sales charges. A four-star rating put the fund in the top 32.5% of rated funds. Ratings are updated monthly. Past performance is not indicative of future results. From the Chairman (Photo of George Putnam) (c) Karsh, Ottawa Dear Shareholder: As recovery works its way through the global economy, stock markets around the world continue to feel the aftereffects of recession. Investors everywhere seem nervous about inflation. Their concern, justified or not, has been a major factor in the generally poor performance of bond markets. And until the bond markets improve, there isn't likely to be much upward movement in the stock markets of these countries. That's why Fund Manager Anthony Regan and his management team have assumed and are maintaining a cautious approach to the management of Putnam Global Growth Fund. Tony isn't ready to say these markets have turned the corner. Nevertheless, he sees growing room for optimism in the months ahead. In the report that follows, Tony and Gerald Zukowski, who manage the U.S. portion of the portfolio, look back on fiscal '94 and ahead on prospects for fiscal '95. Respectfully yours, (Signature of George Putnam) George Putnam Chairman of the Trustees December 14, 1994 Report from the fund managers Anthony W. Regan, lead fund manager Gerald S. Zukowski Looking back over Putnam Global Growth Fund's fiscal year, which ended on October 31, 1994, it appears that the note of caution we sounded in the semiannual report has proven accurate. Last April, we anticipated gradual economic recovery in Europe and Japan, coupled with strong U.S. growth. However, we were discouraged by poor bond markets and a corresponding weakness in equity prices. Our forecast for somewhat lackluster stock growth has been borne out. Global equities continue to track bond prices, which have fallen in the wake of inflation fears. For the year, your fund returned 8.62% at net asset value (NAV). Although not as strong as in previous years, these results well outperformed domestic stocks, as measured by the S&P 500(R) Index at 3.87% for the year through October 31. Your fund's performance at NAV for the same period also bested the MSCI World Index, which includes U.S. stocks. Please see page 8 for performance comparisons. > THE PACIFIC RIM: WEALTH BEGETS WEALTH Over the year, we have seen ongoing economic vigor in Southeast Asia. Gross domestic product (GDP) growth in Malaysia, Singapore, Hong Kong, Taiwan, and South Korea has been persistently robust. Furthermore, the region has many requisites for sustained growth: an inexpensive, educated work force, high personal savings rates, and liquid markets. We will continue to position assets in countries where we see the strongest growth potential. In Japan, where your fund maintains a large position, economic fundamentals appear increasingly solid for the coming months. Indeed, this continued recovery finally seems to mark the end of the slowdown which has plagued Japan for the past several years. And as Japan's condition improves, some of the booming Asian-Pacific economies may begin to reinvest there, further building on the recovery. Such infusions of foreign capital, coupled with the nation's traditional exporting strength, underscore the prospects for renewal of Japanese economic health. In the near term, however, we remain concerned about the impact of bond price declines both in Japan and around the globe. Global stock prices have been tracking rising bond yields, and Japan is not immune to the trend. This weakness has been felt all year in the Japanese stock market, as measured by the Nikkei Index, which grew only 1.45% for 1994 through October 31, in local currency terms. > EUROPEAN EQUITIES: ROOM FOR IMPROVEMENT In Europe, weak bond markets have impeded a rise in stock prices. Massive European budget deficits, which in some countries approach very high levels relative to GDP, are fueling inflationary fears. Such deficits invariably help depress stock and bond prices. Political uncertainty in France, Germany, and Italy add to investor fears that the ill effects of imbalances between government revenues and spending will not be addressed. There have been bright spots in Europe, however. Several U.K. holdings have performed well through the year, boosting your portfolio's value. In addition, we share the optimism of economists forecasting solid GDP performance in the United Kingdom over the coming year. We also believe Ireland, where your fund has substantial holdings, will continue to show strong growth this year, as it did in the past year. (Graphic bar chart representing Portfolio Allocation 10/31/94 to 4/30/94) (Supply plot points) *Based on net assets We are optimistic that the Continent will enjoy continued recovery in corporate earnings. Accordingly, we have added somewhat to our stock positions in the core European countries, with emphasis on France, Germany, and the United Kingdom. In these countries, stock market valuations are looking increasingly attractive as higher profit levels are established, a trend we believe will persist in the coming year. > U.S. MARKETS: WATCHING BOND YIELDS A lackluster bond market has undermined any meaningful advance in U.S. stock prices. Interest rate increases and fears of further raises have dampened enthusiasm for equities, despite strong GDP growth throughout fiscal 1994. A recent difficult period for financial stocks retarded the fund's performance somewhat, since the portfolio was heavily weighted in that sector. However, we expect better prices in those stocks, as well as the fund's cyclical holdings, over the near term. Uncertainty about the country's political future could lead to some market swings in the coming months. The investment community has been moderately enthusiastic about Republican victories, but has demonstrated some concern over the future of global trade negotiations. > EMERGING MARKETS: A SUCCESS STORY FOR THE 1990s Overall economic growth in India, Mexico, China, and Thailand was strong throughout 1994. Although your fund has small holdings in several emerging markets, we have not made substantial investments in any of them. Despite the potential for high returns, we take a cautious approach to these nascent stock markets. We insist that certain criteria be met before we invest in newly industrializing countries (NICs). However, we will continue monitoring developments in these dynamic economies to seek out opportunities for strong potential returns without undertaking unduly large risk. > THE COMING MONTHS: CAUTIOUS OPTIMISM We remain cautiously optimistic about the chances for gains in global equity prices in the near future. However, we do not believe we have reached the turning point where stocks will perform dynamically. Although the linkage between soft bond prices and slow-moving equities around the world has not been NET CHANGE IN STOCK MARKETS 12 months ended 10/31/94
Local currency U.S. $ ..................................................................... United Kingdom 0.45% 10.89% ..................................................................... France -9.06 4.15 ..................................................................... Netherlands 4.19 17.00 ..................................................................... Spain -6.12 1.30 ..................................................................... Germany -1.72 10.15 ..................................................................... Switzerland -5.43 12.33 ..................................................................... Japan -2.84 8.78 ..................................................................... Australia 0.20 11.51 ..................................................................... Hong Kong 5.00 5.01 ..................................................................... Singapore/Malaysia 25.33/35.40 35.44 ..................................................................... United States 3.72 3.72 ..................................................................... World Index N/A 7.65 ..................................................................... World Index (ex U.S.) N/A 9.89
Source: Morgan Stanley Capital International World Indexes severed, we believe current inflationary fears to be exaggerated. When and if markets realize this in the coming year, there could be an uplift in prices. Fundamentally, the signs of economic vigor are apparent around the globe. We anticipate strong corporate earnings in Japan and the rest of Asia, in some core European countries, and in the United States. Even as we wait for broader markets to share this enthusiasm, we will continue to scour the globe for attractive individual investments. The opinions expressed here are exclusively those of Putnam Management. They are not meant as investment advice. Although the described holdings were viewed favorably as of October 31, 1994, there is no guarantee the fund will continue to hold these securities in the future. International investing involves certain risks, such as currency fluctuations and political developments. Performance summary TOTAL RETURN FOR PERIODS ENDED 10/31/94
S&P Class A Class B MSCI 500 NAV POP NAV CDSC World EAFE Index 1 year 8.62% 2.34% 7.95% 2.95% 7.65% 10.09% 3.87% 5 years 59.38 50.27 -- -- 33.06 22.45 61.96 Annual average 9.77 8.49 -- -- 5.88 4.13 10.12 10 years 379.97 352.31 -- -- 319.97 438.36 296.87 Annual average 16.98 16.29 -- -- 15.43 18.33 14.78 Life of class B -- -- 33.46 30.46 35.76 47.94 22.29 Annual average -- -- 12.19 11.18 13.01 16.96 8.35
TOTAL RETURN FOR PERIODS ENDED 9/30/94 (most recent calendar quarter)
S&P Class A Class B MSCI 500 NAV POP NAV CDSC World EAFE Index 1 year 10.57% 4.18% 9.76% 4.76% 7.56% 9.83% 3.72% 5 years 49.83 41.22 -- -- 25.06 13.75 54.66 Annual average 8.42 7.15 -- -- 4.57 2.61 9.11 10 years 383.77 356.03 -- -- 312.74 434.04 288.72 Annual average 17.07 16.39 -- -- 15.23 18.24 14.54 Life of class B -- -- 31.13 28.13 32.03 43.17 19.79 Annual average -- -- 11.80 10.74 12.18 16.01 7.71
Fund performance data do not take into account any adjustment for taxes payable on reinvested distributions. Effective April 27, 1992, the fund began offering class B shares. Performance of each share class will differ. Performance data represent past results and will differ for each share class. Investment returns and principal value will fluctuate so an investor's shares, when sold, may be worth more or less than their original cost. 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 back into the fund. Class A shares are generally subject to an initial sales charge. Class B shares may be subject to a sales charge upon redemption. 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. 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. (Graphic line chart-Growth of a $10,000 Investment 11/1/84 to 10/94) (Supply plot points) Past performance is no assurance of future results. A $10,000 investment in the fund's class B shares at inception on 4/27/92 would have been valued at $13,346 on 10/31/94 ($13,046 with a redemption at the end of the period). COMPARATIVE BENCHMARKS Standard & Poor's 500 Index (S&P 500) is an unmanaged list of large-capitalization common stocks and is frequently used as a general gauge of stock market performance. Morgan Stanley Capital International World Index (MSCI) is an unmanaged list of approximately 1,482 equity securities listed on stock exchanges in the United States, Europe, Canada, Australia, New Zealand, and the Far East. Morgan Stanley Capital International EAFE Index (EAFE) is an unmanaged list of approximately 1,045 equity securities from Europe, Australia, and the Far East. All indexes assume reinvestment of all distributions and do not take into account brokerage commissions or other costs. Performance figures in the Morgan Stanley Capital International indexes reflect changes in market prices and reinvestment of distributions net of withholding taxes, with all values expressed in U.S. dollars. The fund's portfolio contains securities that do not match those in the indexes. Life cycle investing As we move through life, our investment needs change. As these needs change, so does the way we allocate our assets. Here are some basic rules for setting up and maintaining an investment program and some examples of how assets might be allocated. > DETERMINE YOUR INVESTMENT OBJECTIVES. Objectives may include a new home, college education expenses, or retirement. > EVALUATE YOUR RISK TOLERANCE. Generally, risk tolerance is higher for younger investors with longer timelines and lower for older investors who may depend on their investment for current income. > ALLOCATE YOUR INVESTABLE SAVINGS. Your investment advisor will help you determine how much of your investable dollars should be allocated to each investment category. > CHOOSE THE APPROPRIATE PUTNAM FUNDS. Using Putnam's free exchange privilege, you can adjust your own Putnam portfolio of funds as your financial needs change -- without a service fee.* Look at the facing page for some ways you can allocate your assets, then turn the page to see how the Putnam Family of Funds can help you make your choices. *Putnam reserves the right to change or terminate the exchange privilege. In some cases, a sales charge may apply. See prospectus for details. Four ways to allocate assets (Graphic pie charts) SEEKING MAXIMUM GROWTH Risk tolerance: 30%-40% Growth and income Generally investors with a higher risk 40%-50% Growth tolerance (often in their 20s and early 30s.) 5%-20% Income or tax-free income SEEKING GROWTH AND SOME INCOME Risk tolerance: 40%-50% Growth and income Generally investors with a high to moder- 30%-40% Growth ate risk toler- ance (often in their late 30s 10%-30% Income or tax-free income and early 40s.) SEEKING INCOME AND SOME GROWTH WITH PROTECTION AGAINST INFLATION Risk tolerance: 30%-40% Growth and income Generally investors with a moderate risk 10%-20% Growth tolerance (often in their late 40s 25%-60% Income or tax-free income and 50s.) SEEKING HIGH CURRENT INCOME AND PROTECTION AGAINST INFLATION Risk tolerance: 20%-30% Growth and income Generally investors with a moderate 5%-10% Growth to low risk tolerance 40%-70% Income or tax-free income (often over 60 and retired) The Putnam Fund Selector(TM) The Putnam Fund Selector shows the many opportunities for investors within every investment strategy. All investors should first accumulate a base of conservative, cash-equivalent investments. Then, with the help of your investment advisor, diversify your portfolio by investing in the Putnam Family of Funds. (Graphic-Pyramid showing risk\rewards.) Putnam Growth Funds Putnam Growth and Income Funds Putnam Income or Tax-Free Funds Most Conservative Investments PUTNAM GROWTH FUNDS Asia Pacific Growth Fund Capital Appreciation Diversified Equity Trust Europe Growth Fund Global Growth Fund Health Sciences Trust Investors Fund Natural Resources Fund* New Opportunities Fund OTC Emerging Growth Fund Overseas Growth Fund Vista Fund Voyager Fund PUTNAM GROWTH AND INCOME FUNDS Convertible Income-Growth Trust Dividend Growth Fund Equity Income Fund The George Putnam Fund of Boston The Putnam Fund for Growth and Income Managed Income Trust Utilities Growth and Income Fund PUTNAM INCOME FUNDS Adjustable Rate U.S. Government Fund American Government Income Fund Balanced Government Fund Corporate Asset Trust Diversified Income Trust Federal Income Trust Global Governmental Income Trust High Yield Advantage Fund High Yield Trust Income Fund U.S. Government Income Trust PUTNAM TAX-FREE INCOME FUNDS Intermediate Tax Exempt Fund Municipal Income Fund Tax Exempt Income Fund Tax-Free High Yield Fund Tax-Free Insured Fund State tax-free funds+ Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, and Pennsylvania LIFESTAGE(SM) FUNDS Putnam Asset Allocation Funds--three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments to help maximize your return and reduce your risk. The three portfolios: Putnam Asset Allocation: Balanced Portfolio Putnam Asset Allocation: Conservative Portfolio Putnam Asset Allocation: Growth Portfolio MOST CONSERVATIVE INVESTMENTS++ Putnam money market funds: Money Market FundS. Tax Exempt Money Market Fund CDs and savings accounts** * Formerly Energy-Resources Trust. + Not available in all states. ++ Relative to above. S. Formerly Daily Dividend Trust. ** Not offered by Putnam Investments. Certificates of deposit offer a fixed rate of return and may be insured, up to certain limits, by federal/state agencies. Savings accounts may also be insured up to certain limits. Please call your financial advisor or Putnam to obtain a prospectus for any Putnam fund. It contains more complete information, including charges and expenses. Read it carefully before you invest or send money. Report of Independent Accountants For the Year Ended October 31, 1994 To the Trustees and Shareholders of Putnam Global Growth Fund We have audited the accompanying statement of assets and liabilities of Putnam Global Growth Fund, including the portfolio of investments owned, as of October 31, 1994, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended and the "Financial Highlights" for each of the periods indicated therein. These financial statements and "Financial Highlights" are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and "Financial Highlights" based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and "Financial Highlights" are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1994, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and "Financial Highlights" referred to above present fairly, in all material respects, the financial position of Putnam Global Growth Fund as of October 31, 1994, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the "Financial Highlights" for each of the periods indicated therein, in conformity with generally accepted accounting principles. Coopers & Lybrand L.L.P. Boston, Massachusetts December 21, 1994 Portfolio of investments owned October 31, 1994
COMMON STOCKS (91.0%)(a) NUMBER OF SHARES VALUE Japan (23.5%)(b) 479,000 Asahi Diamond Industrial Co. Ltd. $ 8,796,260 1,022,000 Bridgestone Corp. Japan 16,869,950 250,000 CSK Corp. 8,382,350 196,000 Chudenko Corp. 7,198,590 1,100,000 Dai Nippon Printing Co., Ltd. 20,427,110 1,420,000 Daiwa Securities Ltd. 20,656,172 1,800,000 Fujitsu, Ltd. 20,612,880 130,000 Hirose Electric Co. Ltd. 7,711,750 363,000 Ito Yokado Ltd. 19,810,906 1,770,000 Komatsu, Ltd. 16,799,777 330,000 Komori Corp. 8,817,698 300,000 Kurita Water Ltd. 8,604,150 120,000 Mabuchi Motor Co. Ltd. 9,186,011 1,100,000 Marui Co., Ltd. 20,086,660 1,330,000 Matsushita Electric Ind. Ltd. 22,091,166 1,850,000 Mitsubishi Motors Corp. 17,291,950 585,000 Mitsubishi Trust & Banking 9,052,934 2,020,000 Mitsui Co. 18,130,712 1,250,000 Mitsui Fudosan Co., Ltd. 14,056,500 495,000 Murata Manufacturing Co. Ltd. 20,222,828 1,900 Nippon Telegraph and Telephone Corp. 17,739,606 960,000 Nippondenso Co., Ltd. 20,501,376 805,000 Nishimatsu Construction Co. 8,554,091 3,900,000 Nisshin Steel Co., Ltd. 20,479,680 1,200,000 Omron Corp. 21,912,720 316,000 Santen Pharmaceutical Co., Ltd. 8,411,030 270,000 Secom Co. 18,022,284 70,000 Shandong Huaneng Pwr. ADR 752,500 930,000 Shimizu Corp. 9,594,531 399,000 Sony Corp. 24,327,747 96,600 Sony Music Entertainment Inc. 5,471,307 300,000 Taihei Dengyo 8,232,750 490,000 Takuma Co. Ltd. 9,705,969 1,400,000 Tokio Marine & Fire Insurance Co. Ltd. 16,609,880 2,500,000 Toray Industries, Inc. 19,730,750 240,000 Toyo Seikan Kaisha 8,022,288 358,000 Yamanouchi Pharm Co. Ltd. 7,054,354 520,000 Yamatake Honeywell 7,778,836 1,204,000 Yamato Transport Co. Ltd. 15,154,026 1,000,000 Yasuda Fire & Marine Insurance Co., Ltd. 7,345,500 550,207,579 United States (17.6%) 100,000 A.P.S. Holding Corp. 2,950,000 63,000 AMR Corp. 3,472,870 46,000 AT&T Capital Corp. 1,069,500 137,400 Adaptec, Inc. 3,194,550 19,000 Advocat, Inc. 199,500 18,000 Air Products & Chemicals, Inc. 859,500 COMMON STOCKS NUMBER OF SHARES VALUE United States (continued) 125,230 Ak Steel Holding Corp. $ 4,101,283 150,000 Alexander Haagen Properties 2,418,750 69,000 American Electronic Components, Inc. 707,250 209,000 American Express Co. 6,426,750 376,000 American Fam. Restaurants 1,880,000 141,000 American General Corp. 3,877,500 17,100 Avalon Properties, Inc. 333,450 218,600 Avon Products, Inc. 13,826,450 113,000 Back Bay Restaurant Group, Inc. 1,017,000 145,000 Baker (J.) Inc. 2,446,870 50,000 Banco Comercial S A Gdr 144A(c) 975,000 75,800 Bank of Boston Corp. 2,179,250 28,500 Bankers Life Holding Corp. 548,625 64,000 Bankers Trust New York Corp. 4,272,000 20,800 Baxter International 543,442 78,200 Beacon Properties Corp. 1,476,025 25,000 Bell Atlantic Corp. 1,309,370 255,900 Brunswick Corp. 5,245,950 182,000 Burlington Industries, Inc. 1,706,250 54,405 CBS Inc. 3,257,499 97,000 CMC Group, Inc. 388,000 27,400 Camden Property Trust 582,250 337,000 Capco Automotive Products 4,170,375 58,000 Capital Cities/ABC, Inc. 4,821,250 77,000 Capstone Capital Trust, Inc. 1,270,500 45,281 Caremark International, Inc. 984,862 83,300 Cavalier Homes, Inc. 1,062,070 69,400 CenterPoint Properties Corp. 1,301,250 50,000 Chambers Development Co., Inc. Class A 100,000 14,400 Chateau Properties, Inc. 288,000 150,000 Chemical Banking Corp. 5,700,000 253,500 Circus Circus Enterprises, Inc. 5,640,370 42,500 Citizens Investments, Inc. 144A(c) 552,500 330,000 Collins & Aikman Corp. 2,928,750 50,000 Coltec Holdings Inc. 906,250 63,000 Commercial Net Lease Realty, Inc. 779,625 128,100 Computer Associates International, Inc. 6,356,963 58,800 Corrpro Cos., Inc. 918,750 235,300 Crown American Realty Trust 3,235,375 45,600 Donnkenny, Inc. 946,200 86,000 Duckwall-Alco Stores, Inc. 817,000 114,600 Dun & Bradstreet Corp. 6,718,420 348,000 EMC Corp. 7,482,000 36,000 Eagle Finance Corp. 558,000 69,600 Eastex Energy, Inc. 169,650 100,400 Felcor Suite Hotels, Inc. 2,233,900 43,700 Financing for Sciences 142,025 173,800 First Ind. Realty Trust 3,389,100 130,000 First Interstate Bancorp 10,400,000 206,000 Ford Motor Co. 6,077,000 75,000 GTE Corp. 2,306,250 238,850 General Electric Co. 11,673,794 91,900 General Growth Properties, Inc. 1,929,900 169,000 General Motors Corp. 6,675,500 59,706 General RE Corp. 6,687,072 70,000 Golden Systems Inc. 122,500 United States (continued) 69,300 Grace (W.R.) & Co. $ 2,746,013 92,000 Holophane Corp. 1,633,000 52,000 Horizon Outlet Centers 1,222,000 82,695 Hubco Pwr. Gdr 950,993 66,000 ICN Pharmaceuticals, Inc. 767,250 133,000 ITT Consumer Service Corp. 11,737,250 96,000 Integrated Health Services, Inc. 3,912,000 212,200 LTC Properties Inc. 2,732,070 90,000 Landstar System, Inc. 2,992,500 18,400 Lehman Brothers Holding, Inc. 285,200 179,000 Levitz Furniture 144A(c) 1,566,250 68,600 Life Partners Group, Inc. 1,492,050 239,100 Limited Inc. (The) 4,393,463 180,000 Lyondell Petrochemical Co. 4,927,500 9,000 MBNA Corp. 240,750 116,000 Malan Realty Investors, Inc. 1,740,000 70,000 Manufactured Home Communities, Inc. 1,303,750 134,000 Mapco, Inc. 7,319,750 100,000 Maritime Investment Fund(c) 1,050,000 40,000 McArthur/Glen Realty Corp. 635,000 79,000 Merrill Lynch & Co., Inc. 3,110,620 78,000 Mid Atlantic Realty Trust 682,500 175,000 Mid Ocean, Ltd. 4,200,000 36,500 Millicom International Cellular S.A. 1,026,563 43,900 Millipore Corp. 2,255,363 76,000 Minerals Technologies, Inc. 2,261,000 59,500 Morgan (J.P.) & Co., Inc. 3,681,563 140,500 National Health Investors, Inc. 3,846,188 18,000 NN Ball & Roller, Inc. 366,750 95,000 Norfolk Southern Corp. 5,985,000 450,700 Northwest Airlines, Inc. Class A 9,464,700 39,500 Norton McNaughton Inc. 720,870 77,400 Nuevo Energy Co. 1,731,820 118,000 O'Sullivan Industries Holdings 1,489,750 62,000 OM Group, Inc. 1,240,000 47,000 Oasis Residential, Inc. 1,098,620 80,800 Oroamerica, Inc. 606,000 508,000 Owens-Illinois Inc. 5,715,000 13,200 Parametric Technology Corp. 475,200 69,900 Penn National 524,250 120,000 Penney (J.C.) Co., Inc. 6,075,000 175,100 PepsiCo, Inc. 6,128,500 85,000 Pfizer, Inc. 6,300,625 42,000 Post Properties, Inc. 1,233,750 312,800 Premark International, Inc. 13,997,800 100,000 Raychem Corp. 3,700,000 71,100 Reptron Electronics, Inc. 728,775 154,100 Rfs Hotel Investors, Inc. 2,388,550 40,000 Rite Aid Corp. 960,000 111,000 River Bank America 1,304,250 40,400 Ross Stores, Inc. 560,550 21,000 Royal Caribbean Cruises Ltd. 624,750 92,375 SPI Pharmaceuticals Inc. 2,124,625 140,000 SafeCard Services, Inc. 2,240,000 192,400 Salora Int. Equity Share 705,261 24,400 Seda Specialty Parking Corp. 317,200 United States (continued) 48,000 Seitel, Inc. $ 1,344,000 121,000 Shoney's Inc. 1,815,000 116,000 Signet Banking Corp. 3,944,000 81,500 Sizeler Property Investments, Inc. 896,500 249,650 Snap-On Tools Corp. 7,926,388 108,000 Sports Club Co., Inc. 918,000 297,500 Sprint Corp. 9,705,938 162,800 Sterile Concepts Holdings 2,564,100 154,600 Stone Energy Corp. 2,763,475 64,600 Sun Communities, Inc. 1,453,500 176,450 TJX Cos., Inc. (The) 2,779,088 10,000 Talbots, Inc. 347,500 70,000 Tandem Computers Inc. 1,233,750 187,800 Tandy Corp. 8,310,150 224,500 Team Rental Group, Inc. 2,581,750 139,800 Titan Holdings, Inc. 1,432,950 224,000 Transtexas Gas Corp. 2,968,000 105,000 Tribune Co. 5,525,625 93,000 Trism, Inc. 1,395,000 52,000 US WEST, Inc. 1,956,500 57,800 USAir Group, Inc. 252,875 241,200 USX-Marathon Group 4,522,500 251,000 Union Texas Petroleum 5,239,625 19,845 Vishay Intertechnology, Inc. 974,886 121,000 Western Digital Corp. 2,057,000 131,000 Winston Hotels 1,277,250 410,313,517 United Kingdom (10.3%)(b) 3,000,000 Amec PLC 4,854,600 600,000 Anglian Water. PLC 5,364,420 1,977,275 Argyll Group PLC 8,467,482 1,851,800 Associated British Ports PLC 8,323,656 1,517,481 BAT Industries PLC 10,888,680 1,217,322 Barclays Bank PLC 11,599,983 6,564,200 British Steel PLC 17,166,696 530,327 Burmah Oil 7,350,650 2,400,000 CLM Insurance Fund PLC(c) 3,530,640 950,000 East Midlands Electric PLC 10,652,060 3,937,500 Explaura Holdings PLC 96,469 2,180,000 General Electric Co. (The) PLC 9,870,168 1,500,000 Guinness PLC 11,474,250 381,800 Meyer International 2,327,720 850,000 Molins PLC 7,488,500 1,119,095 North West Water Group PLC 10,298,136 600,000 Northern Electric PLC 8,188,860 1,355,000 Pearson PLC 14,041,459 1,500,000 Rothmans International PLC 10,223,850 2,428,900 Royal Insurance Holdings PLC 11,592,411 8,316,200 Sears PLC 14,544,202 272,000 Securicor Group PLC Class A 4,192,417 704,295 Security Services PLC 8,748,893 2,690,900 Senior Engineering Group PLC 3,518,621 1,215,384 Siebe PLC 10,687,601 2,750,000 Tate & Lyle PLC 19,148,250 2,000,000 Vodafone Group PLC 6,914,000 241,554,674 France (6.2%)(b) 41,536 Cetelem $ 8,108,720 203,100 Credit Local de France 15,548,116 42,682 Docks de France 5,919,763 224,324 Elf Aquitaine 16,580,280 106,970 Essilor ADP 10,701,161 206,000 Lafarge Coppee (Bearer Shares) 16,338,354 380,000 Michelin (CGDE)-B 15,907,142 156,200 Pechiney International 4,836,498 53,000 Peugeot S.A. 7,937,646 140,000 Societe Generale D'Enterprises 15,800,316 36,200 Sommer-Allibert 13,501,166 66,818 Ugine 5,015,512 305,000 Union Assurance 8,045,656 144,240,330 Netherlands (4.8%)(b) 29,962 ABN AMRO Holding N.V. 1,064,550 162,263 Aegon N.V. (Bearer) 10,019,317 110,000 Akzo N.V. 13,891,097 153,900 DSM N.V. 13,327,832 1,050,000 Elsevier N.V. 10,712,410 497,580 Getronics Electric N.V. 15,317,851 600,000 IHC Caland N.V. 15,232,200 422,400 Royal Ptt 13,454,454 261,857 Wolters Kluwer N.V. 18,933,727 111,953,438 Switzerland (4.2%)(b) 20,500 BBC Brown Boveri AG-Bearer 17,580,759 14,731 Fischer Georg (Bearer) 16,992,798 3,845 Fischer Georg (Registered) 825,895 8,280 Nestle S.A. (Registered) 7,733,272 5,700 Rieter Holding AG Part Cert 7,346,063 2,750 Rieter Holding AG Part Cert 656,325 9,300 Societe Generale De Surveillance Holdings S.A. 13,465,396 8,350 Sulzer PC 5,746,022 69,000 Swiss Bank Corp. (Registered) 9,523,870 17,286 Swiss Reinsurance Co. (Registered) 10,245,084 10,000 Zurich Insurance Co. (Bearer) 9,108,990 99,224,474 Singapore (3.5%)(b) 1,203,000 Cycle & Carriage Ltd. 11,066,758 1,105,000 Development Bank of Singapore 11,746,482 1,800,000 Genting Berhad 16,555,860 1,257,000 Jurong Shipyard Ltd. 11,306,589 700,000 Singapore Airlines Ltd. 6,725,740 465,000 Singapore Press For. A 8,523,683 1,552,569 United Overseas Bank Ltd. 17,033,234 82,958,346 Hong Kong (3.0%)(b) 1,300,000 Chen Hsong Holdings 824,460 1,300,000 Cheung Kong Holdings Ltd. 6,258,980 272,000 Citic Pacific Ltd. 818,470 Hong Kong (continued) 345,000 Consolidated Electric Pwr. Asia Ltd. $ 805,950 280,000 Dao Heng Bank Ltd. 929,516 3,100,000 Golden Resources Dev. Int. Ltd. 481,430 1,350,000 Guangdong Investment Ltd. 856,170 1,400,000 Guoco Group Ltd. 6,613,600 933,956 HSBC Holdings PLC 11,060,281 3,420,000 Hong Kong Land Holdings Ltd. 8,764,092 2,742,000 Hong Kong Telecommunications Ltd. 5,873,364 1,432,000 Hutchison Whampoa, Ltd. 6,616,556 755,000 Jinhui Shipping & Transp 144A ADR(c) 1,359,000 1,060,000 Johnson Electric Holdings Ltd. 2,949,556 1,700,000 Manhattan Card Co., Ltd. 693,090 1,455,000 Swire Pacific Ltd. Class A 11,110,526 16,000,000 UDL Holdings Ltd. 2,443,200 3,150,000 Yue Yuen Ind. Hldgs 676,930 69,135,171 Ireland (2.6%)(b) 4,474,508 Allied Irish Banks 18,227,356 2,775,000 CRH PLC 15,414,848 108,000 Elan Corp., PLC ADR 3,982,500 87,800 Fleming Russia Securities Fund Ltd. 790,200 2,666,428 Greencore PLC 16,528,921 1,681,426 Irish Life PLC 5,143,818 60,087,643 Malaysia (2.2%)(b) 1,690,000 Hong Leong Industries 9,061,780 1,746,000 Leader Universal 9,703,744 1,500,000 Malayan Banking Berhad 10,215,300 285,000 Maruichi Malaysia Steel Tube 836,589 675,000 Public Bank 1,532,318 3,850,000 Sime Darby Berhad 10,623,300 169,000 SungeiWay Holdings 668,057 106,000 Telekom Malaysia Berhad 858,791 154,000 Tenaga Naszonal 819,727 51,000 Tung Ho Steel Gdr 144A(c) 688,500 1,150,000 United Engineers Berhad 6,211,380 137,000 Ytl 777,502 51,996,988 Germany (2.2%)(b) 85,000 BASF AG 18,036,290 21,100 Benpres Holding Corp. 144A Gdr(c) 242,650 39,000 Cementos Paz Deleware Rio 144A ADR(c) 955,500 13,000 Cesc Limited Units ADR 767,000 16,795 Schering AG 11,220,484 61,000 VEBA AG 20,437,416 51,659,340 Spain (2.1%)(b) 386,200 Argentaria 14,957,140 300,000 Hidrolectrica del Cantabrico 9,112,710 300,000 Inmobiliaria Metropolitana Vasco Central 9,832,140 28,000 Repsol S.A. 896,403 425,000 Repsol S.A. ADS 13,812,500 48,610,893 Australia (1.9%)(b) 1,196,752 Amcor, Ltd. $ 7,958,520 2,250,000 Biota Holdings Ltd. 4,920,730 1,348,000 Brambles Industries, Ltd. 13,486,605 142,500 CRA Ltd. 2,026,436 4,376,682 MIM Holdings Ltd. 9,517,970 911,076 Western Mining Holdings, Ltd. 5,673,361 43,583,622 Sweden (1.0%)(b) 3,250 Nordic Recovery Fund 144A(c) 5,037,500 1,110,000 Svenska Cellulosa AB 18,137,511 23,175,011 Belgium (0.9%)(b) 21,500 Bekaert S.A. 16,698,489 8,930 Solvay SA 4,428,732 21,127,221 Denmark (0.9%)(b) 706,450 Tele Danmark A/S ADR 20,310,438 Finland (0.8%)(b) 910,000 Repola 19,100,627 Argentina (0.7%)(b) 450,000 Astra CIA Argentina DE Petro 945,360 30,500 Banco De Galicia ADR Class B 823,500 345,500 Banco Frances del Rio De La Plata S.A. 2,937,925 50,000 Banco Frances del Rio De La Plata S.A. ADR 1,281,250 39,100 Capex S.A. Gdr 144A(c) 752,675 93,000 Cia Naviera Perez Companc Sa 502,405 590,235 Ciadea 8,237,025 15,000 Inversiones Y Represent-ADR 491,250 75,000 Telecom 454,830 16,426,220 Thailand (0.7%)(b) 45,000 Advanced Information Service 794,768 950,000 Bangkok Bank (Registered) 10,295,815 231,000 Bank of Ayudhya 904,042 352,000 Industrial Finance Corp. 911,328 24,000 Shinawatra Comp Commerce Public Co. 747,562 16,200 Siam Cement 935,079 130,000 Thai Farmers Bank Public Co. 1,147,991 15,736,585 Italy (0.4%)(b) 1,404,840 Cartiere Burgo S.P.A. 8,719,701 1,974,500 Cir Savings 1,258,941 9,978,642 Norway (0.4%)(b) 400,000 Christiana Bank Kreditkass ADR 7,800,000 35,000 Smedvig Transportation ADR 538,125 8,338,125 Austria (0.2%)(b) 410,000 Mayr-Melnhof Karton AG ADS 144A(c) $ 5,586,250 Brazil (0.2%)(b) 79,100 Banco Bradesco Pn 740,392 15,600 Comp Energetica De Minas Gerais 144A ADS(c) 382,200 24,700 Companhia Siderurgica Nacional 1,135,499 4,800 Companhia Vale Do 1,040,758 1,620 Coteminas C Tecidos Norte 690,976 1,469 Eletrobas (Centrais Eletr Bras) 572,631 228,000 Refripar Preference (Refrigeracao Parana) 688,856 5,251,312 India (0.2%)(b) 66,300 Autoriders Finance Ltd. 739,756 36,000 East India Hotel Gdr 144A(c) 519,480 40,000 Gnfc Gdr India 144A(c) 510,000 46,800 India Cements Ltd. Gdr 144A(c) 468,000 21,800 India Magnum Fund 1,308,000 105,000 Kec International Ltd. 970,599 12,300 Southern Petrochemical Ltd.(c) 176,874 4,692,709 Mexico (0.1%)(b) 405,000 Cifra, Series A 1,164,699 58,700 Grupo Mexicano De Desarrollo Sa Senior B ADR 1,063,938 180,900 Transportacion Maritima Mexicana, S.A. Class A ADS 144A(c) 1,266,300 3,494,937 Portugal (0.1%)(b) 175,000 Banco Commercial Portugues, S.A. (Registered) 2,392,583 Indonesia (0.1%)(b) 325,000 Indorayon 883,350 13,900 Part Tri Polyta ADR 413,525 267,000 Pt Astra International Foreign Registered 590,390 1,887,265 Venezuela (0.1%)(b) 225,040 Venepal(d) 562,600 184,000 Venezolana de Prerreducidos Caroni Venprecar 1,081,000 1,643,600 Taiwan (0.1%)(b) 40,700 Hocheng Group Corp. Gdr 144A(c) 1,180,300 22,000 Yageo Gdr 144A(c) 456,500 1,636,800 Pakistan (--%)(b) 37,000 Pakistan State Oil 534,106 2,693 Pakistan Telecommunication Ltd. 144A Gds(c) 438,959 973,065 Colombia (--%)(b) 33,300 Banco Ganadero S.A. ADS $ 899,100 Chile (--%)(b) 31,400 Empresas Telex-Chile Sa ADR 576,975 Total Common Stocks (cost $1,835,912,324) $2,128,753,480 Convertible Preferred Stocks (0.3%)(a) Number of Shares Value 40,000 Citicorp $5.375 cv. pfd. $ 5,290,000 68,600 IVF America, Inc. $0.20 cv. Prf. Ser. A 248,675 Total Convertible Preferred Stocks (cost $2,383,671) $ 5,538,675 Convertible Bonds (--%)(a) Principal Amount Value $160,000 O'Brien Environmental Energy Inc. cv. sub. deb. 11s, 2011 $ 68,000 880,000 Regency Health Services, Inc. cv. 6-1/2s, 2003 928,400 Total Convertible Bonds (cost $1,017,600) $ 996,400 Warrants (--%)(a)(b)(d) Expiration Date Value Italy (--%)(b) 134,140 Cartiere Burgo S.P.A. 12/31/95 $ 17,881 United States (--%) 43,700 Financing for Sciences Wts 5/20/99 10,925 Venezuela (--%)(b) 184,000 Siderurigica Venezolana Sivensa 04/01/95 1,840 Total Warrants (cost $6,210) $ 30,646 Short-Term Investments (8.8%)(a) Principal Amount Value $21,000,000 Bell Atlantic Financial Services, Inc. 4.87s, November 17, 1994 $ 20,954,547 20,000,000 Federal Farm Credit Bank 4.74s, November 15, 1994 19,963,133 25,000,000 Federal Home Loan Mortgage Corp. 4.9s, December 5, 1994 24,884,305 40,000,000 Federal National Mortgage Assn. 4.88s to 4.97s, with various due dates to December 19, 1994 39,788,844 25,000,000 Ford Motor Credit Co. 5.06s, November 30, 1994 24,898,097 30,000,000 General Motors Acceptance Corp. 4.93s, November 23, 1994 29,909,617 45,216,000 Interest in $497,257,000 joint repurchase agreement dated October 31, 1994 with Lehman Brothers, Inc. due November 1, 1994 with respect to various U.S. Treasury obligations -- maturity value of $45,221,966 for an effective yield of 4.75% 45,221,966 Total Short-Term Investments (cost $205,620,509) $ 205,620,509 Total Investments (cost $2,044,940,314)(e) $2,340,939,710
(a) Percentages indicated are based on total net assets of $2,338,389,151, which correspond to a net asset value per class A, class B and class Y shares of $9.92, $9.74 and $10.00 respectively. (b) Value is determined or significantly influenced by trading on exchanges not in the United States or Canada. ADR or ADS after the name of a foreign holding stands for American Depository Receipt or American Depository Shares, respectively, representing ownership of securities on deposit with a domestic custodian bank. (c) Securities 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. At October 31, 1994 these securities amounted to $27,695,078 or 1.2% of net assets. (d) Non-income-producing security. (e) The aggregate identified cost on a tax basis is $2,054,684,508, resulting in gross unrealized appreciation and depreciation of $597,753,102 and $311,497,900, respectively, or net unrealized appreciation of $286,255,202. Forward Currency Contracts Outstanding (at October 31, 1994) (aggregate face value $207,878,096)
Aggregate Market Face Delivery Unrealized Value Value Date Depreciation Japanese Yen (Sell) $105,082,992 $103,352,810 2/22/95 $(1,730,182) Japanese Yen (Sell) 105,082,992 104,525,286 2/22/95 (557,706) Total $(2,287,888)
The accompanying notes are an integral part of these financial statements. Statement of assets and liabilities October 31, 1994
Assets Investments in securities, at value (identified cost $2,044,940,314) (Note 1) $2,340,939,710 Foreign currency (cost $3,231,781) 4,225,552 Dividends, interest and other receivables 5,652,823 Receivable for shares of the Fund sold 10,913,805 Receivable for securities sold 3,677,959 Foreign tax receivable 2,238,614 Prepaid expenses 2,634 Total assets 2,367,651,097 Liabilities Payable to subcustodian (Note 2) 172,634 Payable for securities purchased 17,717,308 Payable for shares of the Fund repurchased 2,009,043 Payable for compensation of Manager (Note 2) 3,802,758 Payable for administrative services (Note 2) 10,874 Payable for compensation of Trustees (Note 2) 4,692 Payable for investor servicing and custodian fees (Note 2) 1,298,270 Payable for distribution fees (Note 2) 968,562 Other accrued expenses 989,917 Payable for open forward currency contracts 2,287,888 Total liabilities 29,261,946 Net assets $2,338,389,151 Represented by Paid-in capital (Notes 4 and 5) $1,981,357,765 Undistributed net investment income (Note 5) 4,113,885 Accumulated net realized gain on investment transactions (Note 5) 57,904,464 Net unrealized foreign currency translation gains 1,301,529 Net unrealized appreciation of investments and forward currency contracts 293,711,508 Total--Representing net assets applicable to capital shares outstanding $2,338,389,151 Computation of net asset value and offering price Net asset value and redemption of class A price per share ($1,507,549,950 divided by 152,036,952 shares) $9.92 Offering price per share (100/94.25 of $9.92)* $10.53 Net asset value and offering price of class B per share ($801,443,339 divided by 82,323,782 shares)+ $9.74 Net asset value, offering price and redemption price of class Y shares ($29,395,862 divided by 2,940,217 shares) $10.00
* 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 Year ended October 31, 1994
Investment income: Dividends (net of foreign tax of $2,895,543) $ 33,975,446 Interest 5,437,347 Total investment income 39,412,793 Expenses: Compensation of Manager (Note 2) $ 12,562,847 Investor servicing and custodian fee (Note 2) 5,393,663 Compensation of Trustees (Note 2) 53,179 Reports to shareholders 341,857 Auditing 58,943 Legal 40,246 Registration fees 311,079 Administrative services (Note 2) 62,390 Postage 746,879 Distribution fees--class A (Note 2) 3,117,765 Distribution fees--class B (Note 2) 5,554,686 Other 41,989 Total expenses 28,285,523 Net investment income 11,127,270 Net realized gain on investments (Notes 1 and 3) 64,734,648 Net realized loss on forward currency contracts (Note 1 and 3) (10,783,242) Net realized gain on foreign currency (Note 1) 52,312 Net unrealized foreign currency translation gains during the year 914,363 Net unrealized appreciation of investments, and forward currency contracts during the year 63,829,703 Net gain on investments 118,747,784 Net increase in net assets resulting from operations $129,875,054
The accompanying notes are an integral part of these financial statements. Statement of changes in net assets
Year ended October 31 1994 1993 Increase in net assets Operations: Net investment income $ 11,127,270 $ 6,406,339 Net realized gain on investments 64,734,648 19,887,985 Net realized gain (loss) on forward currency contracts (10,783,242) 3,250,656 Net realized gain (loss) on foreign currency 52,312 (111,102) Net unrealized foreign currency translation gains 914,363 384,641 Net unrealized appreciation of investments, options and forward currency contracts 63,829,703 181,620,117 Net increase in net assets resulting from operations 129,875,054 211,438,636 Distributions to shareholders from: Net investment income Class A -- (6,035,088) Class B -- (188,835) Net realized gain on investments Class A (18,205,009) (786,486) Class B (5,583,193) (29,244) Increase from capital share transactions (Note 4) 1,058,122,192 320,863,037 Total increase in net assets 1,164,209,044 525,262,020 Net assets Beginning of year 1,174,180,107 648,918,087 End of year (including undistributed net investment income of $4,113,885 and $2,869,595, respectively) $2,338,389,151 $1,174,180,107
The accompanying notes are an integral part of these financial statements. Financial Highlights* (For a share outstanding throughout the period)
June 15, 1994 April 27, 1992 (commencement (commencement of of operations) to operations) to October 31 Year ended October 31 October 31 1994 1994 1993 1992 Class Y Class B Net asset value, beginning of period $ 9.46 $ 9.19 $ 7.22 $ 7.50 Investment operations Net investment income .01 .01 .05 .01 Net realized and unrealized gain (loss) on investments .53 .71 1.99 (.29) Total from investment operations .54 .72 2.04 (.28) Less distributions from: Net investment income -- -- (.06) -- Net realized gain on investments -- (.17) (.01) -- Total distributions -- (.17) (.07) -- Net asset value, end of period $ 10.00 $ 9.74 $ 9.19 $ 7.22 Total investment return at net asset value (%) (b) 5.71(c) 7.95 28.44 (3.73)(c) Net assets, end of period (in thousands) $29,396 $801,443 $233,195 $18,154 Ratio of expenses to average net assets (%) .37(c) 2.11 2.09 1.16(c) Ratio of net investment income to average net assets (%) .42(c) .12 .23 .21(c) Portfolio turnover (%) 17.45 17.45 49.53 61.84
Year Ten months ended ended Year ended October 31 October 31 October 31 1994 1993 1992 1991 1990 1989 Class A Class A $9.30 $ 7.25 $ 7.64 $ 7.12 $ 7.42 $ 6.51 .02 .07 .10 .12 .12 .11 .77 2.06 (.22) .96 (.21) .80 .79 2.13 (.12) 1.08 (.09) .91 -- (.07) (.12) (.15) (.14) -- (.17) (.01) (.15) (.41) (.07) -- (.17) (.08) (.27) (.56) (.21) -- $9.92 $ 9.30 $ 7.25 $ 7.64 $ 7.12 $ 7.42 8.62 29.62 (1.51) (16.51) (1.35) 14.07(c) $1,507,550 $940,985 $630,764 $648,450 $560,019 $482,750 1.33 1.39 1.56 1.47 1.44 1.06(c) .83 .85 1.28 1.60 1.56 1.52(c) 17.45 49.53 61.84 70.64 95.39 66.91
Year ended December 31 1988 1987 1986** 1985 Class A Net asset value, beginning of period $ 6.07 $ 7.60 $ 5.88 $ 3.94 Investment operations Net investment income .09 .07 .06(a) .03 Net realized and unrealized gain (loss) on investments .46 .44 2.07 2.31 Total from investment operations .55 .51 2.13 2.34 Less distributions from: Net investment income (.11) (.13) (.03) (.06) Net realized gain on investments -- (1.91) (.38) (.34) Total distributions (.11) (2.04) (.41) (.40) Net asset value, end of period $ 6.51 $ 6.07 $ 7.60 $ 5.88 Total investment return at net asset value (%) (b) 9.04 7.26 37.66 65.03 Net assets, end of period (in thousands) $478,489 $522,569 $411,793 $90,625 Ratio of expenses to average net assets (%) 1.40 1.39 1.07(a) 1.32 Ratio of net investment income to average net assets (%) 1.34 1.03 .85(a) 1.04 Portfolio turnover (%) 102.90 113.05 175.68 134.07
* The table has been restated to reflect a 4-for-1 share split declared by the Fund to shareholders of record on October 27, 1989, payable on October 28, 1989. ** Per share investment income, expenses and net investment income for the year ended December 31, 1986 have been determined on the basis of the weighted average number of shares outstanding during the year. (a) Reflects an expense limitation applicable during the year. As a result of such limitation, expenses of the Fund for fiscal 1986 reflect a reduction of $0.01 per share. (b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (c) Not annualized. Notes to financial statements October 31, 1994 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 and class Y shares. The fund commenced offering its class Y shares June 15, 1994. The fund commenced its public offering of class B shares on April 27, 1992. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class B shares do not pay a front-end sales charge, but pay a higher ongoing distribution fee than class A shares, and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class Y shares which do not pay a front-end or contingent deferred sales charge, are generally subject to the same expenses as class A and class B shares, but do not bear a distribution fee. Class Y shares are sold only to defined contribution plans with an initial investment of $250 million in a combination of Putnam funds and other investments managed by Putnam. Expenses of the fund are borne pro- rata by the holders of all classes of shares, except that each class bears expenses unique to that class (including the distribution fees applicable to such class), and votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or to be determined by the Trustees. Shares of each class would receive their pro-rata share of the net assets of the fund if the fund were liquidated. In addition the Trustees declare separate dividends on each class of shares. The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. 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, except that certain U.S. government obligations are stated at the mean between the last reported bid and asked prices. Securities quoted in foreign currencies are translated into U.S. dollars at the current exchange rate. Gains and losses that arise from changes in exchange rates are not segregated from 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. 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 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. The fund's Manager is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. D Security transactions and related investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Interest income is recorded on the accrual basis and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the fund is informed of the ex-dividend date. Foreign-denominated receivables and payables are "marked-to-market" daily using the current exchange rate. The fluctuation between the original exchange rate and the current exchange rate is recorded as unrealized translation gain or loss. Upon receipt or payment, the fund realizes a gain or loss amounting to the difference between the original value and the ending value of the receivable or payable. E Option accounting principles When the fund writes a call or put option, an amount equal to the premium received by the fund is included in the fund's "Statement of Assets and Liabilities" as an asset and an equivalent liability. The amount of the liability is subsequently "marked-to-market" to reflect the current market value of the option written. The current market value of an option is the last sale price or, in the absence of a sale, the last offering price. If an option expires on its stipulated expiration date, or if the fund enters into a closing purchase transaction, the fund realizes a gain or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written call option is exercised, the fund realizes a gain or loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received reduces the cost of the security which the fund purchases upon exercise of the option. The fund writes covered call options; that is, options for which it holds the underlying security or its equivalent. Accordingly, the risk in writing a call option is that the fund relinquishes the opportunity to profit if the market price of the underlying security increases and the option is exercised. In writing a put option, the fund assumes the risk of incurring a loss if the market price of the underlying security decreases and the option is exercised. The premium paid by the fund for the purchase of a call or put option is included in the fund's "Statement of Assets and Liabilities" as an investment and subsequently "marked-to-market" to reflect the current market value of the option. If an option which the fund has purchased expires on the stipulated expiration date, the fund realizes a loss in the amount of the cost of the option. If the fund enters into a closing sale transaction, the fund realizes a gain or loss, depending on whether the proceeds from the closing sale transaction are greater or less than the cost of the option. If the fund exercises a call option, the cost of the security acquired by exercising the call is increased by the premium paid to buy the call. If the fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are decreased by the premium originally paid. Options on foreign currencies The fund writes and purchases put and call options on foreign currencies. The accounting principles and risks involved are similar to those described above relating to options on securities. The amount of potential loss to the fund upon exercise of a written call option is the value (in U.S. dollars) of the currency sold, converted at the spot price, less the value of the U.S. dollars received in exchange. The amount of potential loss to the fund upon exercise of a written put option is the value (in U.S. dollars) of the currency received converted at the spot price, less the value of the U.S. dollars paid in exchange. Forward currency contracts A forward currency contract is an agreement between two parties to buy or sell a currency at a set price on a future date. The 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 by the fund as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The maximum potential loss from forward currency contracts is the aggregate face value in U.S. dollars at the time the contract was opened; however, management believes the likelihood of such a loss to be remote. F Federal taxes It is the policy of the fund to distribute all of its income within the prescribed time and otherwise comply with the provisions of the 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 of securities held and excise tax on income and capital gains. G Distributions to shareholders Distributions to shareholders are recorded by the Fund on the ex-dividend date. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences include treatment of certain gains and losses on foreign currency transactions. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. For the year ended October 31, 1994, the fund reclassified $7,490,439 to decrease undistributed net investment income, $7,765,332 to increase accumulated net realized gain in investments and $274,893 to decrease paid-in capital. H Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of transactions. Effective November 1, 1993, the fund adopted Statement of Position (SOP) 93-4, Foreign Currency Accounting and Financial Statement Presentation for Investment Companies. In accordance with this SOP, reported net realized gains and losses on foreign currency transactions represent net gains and losses from sales and maturities of forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. Further, as permitted under the SOP, the effects of changes in foreign currency exchange rates on investments in securities are not segregated in the Statement of Operations from the effects of changes in market prices of those securities, but are included with the net realized and unrealized gain or loss on investments. Note 2 Management fee, administrative services, and other transactions Compensation of Putnam Management, for management and investment advisory services is paid quarterly based on the average net assets of the fund for the quarter. Such fee is based on an annual rate of 0.80% of the first $500 million of average net assets, 0.70% of the next $500 million, 0.65% of the next $500 million and 0.60% of any amount over $1.5 billion. Under current law, the fee is subject to reduction in any year to the extent that expenses (exclusive of distribution fees, brokerage, interest and taxes) of the fund exceed 2.5% of the first $30 million of average net assets, 2.0% of the next $70 million and 1.5% of any amount over $100 million and by the amount of certain brokerage commissions and fees (less expenses) received by affiliates of the Manager on the fund's portfolio transactions. The fund also reimburses the Manager for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. For the year ended October 31, 1994, the Fund paid $62,390 for these services. Trustees of the fund receive an annual Trustee's fee of $3,480 and an additional fee for each Trustees' meeting attended. Trustees who are not interested persons of the Manager and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. Custodial functions for the fund are provided by the Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing agent functions are currently provided by Putnam Investor Services, a division of PFTC. Fees paid for these investor servicing and custodial functions for the year ended October 31, 1994 amounted to $5,393,663. Investor servicing and custodian fees reported in the Statement of Operations for the year ended October 31, 1994 have been reduced by credits allowed by PFTC. As part of the custodial contract between Putnam Fiduciary Trust Company and the subcustodian bank, the subcustodian has a lien on the securities of the fund to the extent permitted by the fund's investment restrictions to cover any advances made by the subcustodian for the settlement of securities purchased by the fund. At October 31, 1994, the payable to subcustodian represents the amount due for cash advanced for the settlement of a security purchase. The fund has adopted a distribution plan with respect to class A shares (the "Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Class A Plan is to compensate Putnam Mutual Funds Corp., a wholly owned subsidiary of Putnam Investments Inc. for services provided and expenses incurred by it in distributing class A shares. The Trustees have approved payment by the fund to Putnam Mutual Funds Corp. at an annual rate of 0.25% of the fund's average net assets attributable to class A shares. For the year ended October 31, 1994, the fund paid $3,117,765 in distribution fees for class A shares. During the year ended October 31, 1994, Mutual Funds Corp., acting as an underwriter, received net commissions of $1,359,290 from the sale of class A shares of the fund. A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares purchased as part of an investment of $1 million or more. For the year ended October 31, 1994, Putnam Mutual Funds Corp., acting as underwriter, received $8,713 on class A redemptions. The fund has adopted a separate distribution plan with respect to its class B shares (the "Class B Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Class B Plan is to compensate Putnam Mutual Funds Corp. for services provided and expenses incurred by it in distributing class B shares. The Trustees have approved payment by the fund to Putnam Mutual Funds Corp. at an annual rate of 1.00% of the fund's average net asset value of class B shares. For the year ended October 31, 1994, the fund paid Putnam Mutual Funds Corp. distribution fees of $5,554,686 for class B shares. Putnam Mutual Funds Corp. also receives the proceeds on the contingent deferred sales charges levied on class B share redemptions within six years of purchase. The charge is based on declining rates, which begins at 5.0% of the net asset value of the redeemed shares. Putnam Mutual Funds Corp. has received contingent deferred sales charges of $755,561 from sales of class B shares during the year ended October 31, 1994. Note 3 Purchases and sales of securities During the year ended October 31, 1994, purchases and sales of investment securities other than short-term investments aggregated $1,482,228,063 and $537,153,242, respectively. There were no purchases or sales of U.S. government obligations during the year. In determining the net gain or loss on securities sold, the cost of securities has been determined on the identified cost basis. Transactions in forward currency contracts during the year are summarized as follows:
Sales of Forward Currency Contracts Aggregate Face Value Contracts outstanding at beginning of year $ 104,773,120 Contracts opened 506,608,874 Contracts closed (403,503,898) Contracts Open at end of year $ 207,878,096
Note 4 Capital shares At October 31, 1994, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:
Year ended October 31 1994 Class A Shares Amount Shares sold 89,867,991 $ 864,456,541 Shares issued in connection with reinvestment of distributions 1,757,924 16,542,020 91,625,915 880,998,561 Shares repurchased (40,809,495) (391,801,048) Net increase 50,816,420 $ 489,197,513 Year ended October 31 1993 Class A Shares Amount Shares sold 44,065,078 $ 367,610,548 Shares issued in connection with reinvestment of distributions 816,802 6,085,174 44,881,880 373,695,722 Shares repurchased (30,696,170) (247,602,245) Net increase 14,185,710 $ 126,093,477 Year ended October 31 1994 Class B Shares Amount Shares sold 67,923,259 $ 643,916,531 Shares issued in connection with reinvestment of distributions 543,647 5,055,913 68,466,906 648,972,444 Shares repurchased (11,507,056) (108,633,648) Net increase 56,959,850 $ 540,338,796 Year ended October 31 1993 Class B Shares Amount Shares sold 24,618,432 $ 209,632,239 Shares issued in connection with reinvestment of distributions 27,755 205,947 24,646,187 209,838,186 Shares repurchased (1,797,350) (15,068,626) Net increase 22,848,837 $ 194,769,560 From June 15, 1994 (commencement of operations) to October 31, 1994 Class Y Shares Amount Shares sold 2,962,991 $ 28,809,511 Shares issued in connection with reinvestment of distributions -- -- 2,962,991 28,809,511 Shares repurchased (22,774) (223,628) Net increase 2,940,217 $ 28,585,883
Note 5 Reclassification of Capital Accounts Effective November 1, 1993 Putnam Global Growth Fund has adopted the provisions of the AICPA Statement of Position (SOP) 93-2 "Determination, Disclosure and Financial Statement Presentation of Income, Capital Gain and Return of Capital Distributions by Investment Companies." The purpose of this SOP is to report the accumulated net investment income and accumulated net realized gain (loss) accounts in such a manner as to approximate amounts available for future distributions (or to offset future realized capital gains) and to achieve uniformity in the presentation of distributions by investment companies. As a result of the SOP, the fund has reclassified $2,392,541 to decrease undistributed net investment income and $20,658,232 to increase accumulated net realized gain and $18,265,691 to decrease paid-in capital. These adjustments represent the cumulative amounts necessary to report these balances through October 31, 1993, the close of the fund's prior fiscal year end for financial reporting and tax purposes. These reclassifications have no impact on the total net asset value of the fund. Federal tax information The distribution shown in the table from "short-term capital gain" totaling $.037 per share constitutes "dividend income" for federal income tax purposes. The Fund has designated 100% as qualifying for the dividends-received deduction for corporations. Of the total distributions made, $.135 per share was classified as a long-term capital gain, whether received in cash or additional Fund shares, and regardless of how long you had owned your shares before the distribution was made. The Form 1099 you receive in January 1995 will show the tax status of all distributions paid to your account in calendar 1994. If you are a shareholder in an IRA or other tax-sheltered retirement plan, this statement is for information only and will serve as a record of distributions reinvested in your account during the fiscal year. Money invested in these plans generally is not subject to federal income tax until you withdraw it. As required by law, your Fund reports to the Internal Revenue Service on a calendar year basis the amount of distributions paid to each shareholder.
Investment Short-Term Long-Term Total Date Paid Income Capital Gain Capital Gain Paid December 31, 1993 $-- $.037 $.135 $.172
The Fund has elected under Section 853 of the Internal Revenue Code to pass through to its shareholders the opportunity to claim a foreign tax credit or deduction. Therefore, you will be deemed to have received in your December 1994 dividend, the allocable amount of foreign taxes and to have paid those taxes directly. When you file your federal income tax return (Form 1040), you may claim the amount of foreign taxes paid either as a foreign tax credit or as an itemized deduction but not both. A foreign tax credit will generally result in a direct reduction in your U.S. tax liability, subject to the limitations of Section 904 of the Code. The amount of your foreign tax credit will be reflected on the Form 1099 that you will receive after December 31, 1994. During the fiscal year ended October 31, 1994, the Fund earned $30,020,267 from foreign countries and paid $2,895,543 in taxes to those foreign countries for which it has received a foreign tax credit. 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 INDEPENDENT ACCOUNTANTS Coopers & Lybrand L.L.P. TRUSTEES George Putnam, Chairman William F. Pounds, Vice Chairman Jameson Adkins Baxter Hans H. Estin John A. Hill Elizabeth T. Kennan Lawrence J. Lasser Robert E. Patterson Donald S. Perkins George Putnam, III A.J.C. Smith W. Nicholas Thorndike OFFICERS George Putnam President Charles E. Porter Executive Vice President Patricia C. Flaherty Senior Vice President John R. Verani Vice President 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 Gerald S. Zukowski Vice President and Fund Manager William N. Shiebler Vice President Paul M. O'Neil Vice President John D. Hughes Vice President and Treasurer Beverly Marcus Clerk and Assistant Treasurer This report is for the information of shareholders of Putnam Global Growth Fund. It may also be used as sales literature when preceded or accompanied by the 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. Bulk Rate U.S. Postage PAID Putnam Investments A05/A53-15439 The Putnam Funds One Post Office Square Boston, Massachusetts 02109 APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND EDGAR-FILED TEXTS: (1) Bold and italic typefaces are displayed in normal type. (2) Headers (e.g., the name of the fund) are omitted. (3) Certain tabular and columnar headings and symbols are displayed differently in this filing. (4) Bullet points and similar graphic signals are omitted. (5) Page numbering is omitted. (6) Trademark symbol replaced with (TM) -----END PRIVACY-ENHANCED MESSAGE-----