N-CSR 1 a_voyager.htm PUTNAM VOYAGER FUND a_voyager.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES




Investment Company Act file number: (811-01682)
Exact name of registrant as specified in charter: Putnam Voyager Fund
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109
Name and address of agent for service: Beth S. Mazor, Vice President
One Post Office Square
Boston, Massachusetts 02109
Copy to:         John W. Gerstmayr, Esq.
Ropes & Gray LLP
800 Boylston Street
Boston, Massachusetts 02199-3600
Registrant’s telephone number, including area code: (617) 292-1000
Date of fiscal year end: July 31, 2011
Date of reporting period: August 1, 2010 — July 31, 2011



Item 1. Report to Stockholders:

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:




Putnam
Voyager
Fund

Annual report
7 | 31 | 11

Message from the Trustees  1 

About the fund  2 

Performance snapshot  4 

Interview with your fund’s portfolio manager  5 

Your fund’s performance  10 

Your fund’s expenses  13 

Terms and definitions  15 

Trustee approval of management contract  16 

Other information for shareholders  20 

Financial statements  21 

Federal tax information  51 

About the Trustees  52 

Officers  54 

 

Consider these risks before investing: Investments in small and/or midsize companies increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and the market may not favor growth-style investing.



Message from the Trustees

Dear Fellow Shareholder:

In early August, equity markets around the world were rocked by indications of slowing economic growth and worsening debt issues in Europe and the United States. Significantly, Standard & Poor’s downgraded U.S. sovereign debt to AA+ from AAA on August 5. Markets did show signs of stabilizing after the initial shock wore off, but it seems clear that volatility will be with us in the near term.

Putnam’s investment team believes the downgrade will have limited impact on the real economy today and that many investment opportunities still exist. Long-term investors are wise to seek the counsel of their financial advisors during volatile times and to remember that market volatility historically has served as an opportunity for nimble managers to both guard against risk and pursue new opportunities. We believe that Putnam’s active, research-intensive investment approach offers shareholders a potential advantage in this environment.

We would like to thank John A. Hill, who has served as Chairman of the Trustees since 2000 and who continues on as a Trustee, for his service. We are pleased to announce that Jameson A. Baxter is the new Chair, having served as Vice Chair since 2005 and a Trustee since 1994. Ms. Baxter is President of Baxter Associates, Inc., a private investment firm, and Chair of the Mutual Fund Directors Forum. In addition, she serves as Chair Emeritus of the Board of Trustees of Mount Holyoke College, Director of the Adirondack Land Trust, and Trustee of the Nature Conservancy’s Adirondack Chapter.

Lastly, we would like to take this opportunity to welcome new shareholders to the fund and to thank all of our investors for your continued confidence in Putnam.








Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 5.75%; had they, returns would have been lower. See pages 5 and 10–12 for additional performance information. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com.

* The fund’s benchmark, the Russell 1000 Growth Index, was introduced on 12/31/78, which post-dates the inception of the fund’s class A shares.

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Interview with your fund’s portfolio manager

Nick C. Thakore

Stocks turned increasingly volatile in the second half of the fund’s fiscal year, which ended July 31, 2011. What has driven this negative performance?

Investor belief in the economic recovery’s endurance was shaken in 2011 due to a combination of events. China, a critical source of global economic activity, began raising interest rates to curb the potential inflationary impact of growth in that country. Around the time of the Middle East uprisings, oil prices briefly hit $120 per barrel before declining again. The Federal Reserve’s $600 billion stimulus program ceased at the end of June, and investors displayed renewed concern about sovereign debt issues both in Europe and the United States.

Significantly, just after the close of the period, rating agency Standard & Poor’s [S&P] downgraded U.S. debt by one notch to AA+. The combination of this negative news and uncertainty among investors about its significance led to a great deal of volatility in early August.

Why has the fund’s performance lagged its benchmark index?

My approach in managing Putnam Voyager Fund has always been to seek a portfolio of stocks that have superior outlooks for earnings and cash-flow growth over the next couple of years, but that also have a superior combination of growth and valuation. This approach has led to a portfolio that today favors cyclical growth stocks over stable growth stocks, and to other stocks that are more controversial in nature.

While my strategy has not changed, it did lead to underperformance during the second half of the period, and I believe there are


This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 7/31/11. See pages 4 and 10–12 for additional fund performance information. Index descriptions can be found on page 15.

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three reasons for this. First, the market has dramatically shifted its view of the economic recovery, and that affected the kind of stocks that performed well during the period. Defensive stocks sharply outperformed cyclical stocks, which tend to benefit when economic growth is stronger. More controversial companies generally performed poorly. In the growth universe, the cheapest stocks performed poorly, and the most expensive stocks performed well.

The second factor that detracted from performance was the macroeconomic shocks around the globe. The fund had some direct Japanese exposure, for example, at the time of the earthquake and tsunami. The fund also had exposure to automobile stocks and several technology positions, which were negatively affected by the supply-chain disruptions following the catastrophe. The high price of oil up until May hurt oil and airline stocks in the portfolio.

Finally, some stock-specific returns detracted from the fund’s performance during the year. These include out-of-benchmark positions in U.K. mining company Vedanta Resources, Goldman Sachs, and OfficeMax, as well as an overweight position in Hewlett-Packard.

Have recent market events altered the fund’s positioning?

The investment approach remains the same, and while there have been some adjustments in positions, no wholesale repositioning has occurred. I believe the odds of recession are higher than before, but recession is still not my base case in the near term. It is important to realize that we are in a negative feedback loop that could perpetuate itself. Additionally, the European debt situation and economic outlook are troubling, and investor confidence is lacking in both the United States and Europe. On the positive side, however, many U.S. corporations have reacted favorably to


Allocations are represented as a percentage of the fund’s net assets. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities and the exclusion of as-of trades, if any, and the use of different classifications of securities for presentation purposes. Holdings and allocations may vary over time.

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economic events so far, oil prices are lower than earlier this year, rebuilding/rebounding from the Japan earthquake may help second half growth, and there are early signs of emerging markets entering an interest rate easing cycle.


I believe the market has likely already discounted at least a mild recession. Many stocks vulnerable to recession have sold off so hard that in my view the risk/reward metrics remain favorable. In terms of cyclical exposure, I have looked to lighten positions in stocks with higher leverage and with greater downside to recessionary earnings, while maintaining or adding to positions where balance sheets are strong, free-cash-flow generation is high, buyback activity is strong, and the stock appears to have reasonably discounted a recessionary outlook already.

The biggest positive, in my view, is that corporations are in great shape in terms of balance sheets, cash-flow generation and earnings. Companies are aggressively buying back stock, and insiders are also buying at a heightened rate. If we re-enter a recession, most companies should have substantially higher earnings than in past cycles because of structurally improved cost structures and balance sheets. Additionally, a slowdown, if it occurs, may be milder in the United States than the last cycle, because there is less leverage in the financial system and because many elements of the economy, such as housing, are still hovering near historic lows.


This table shows the fund’s top 10 holdings by percentage of the fund’s net assets as of 7/31/11. Short-term holdings are excluded. Holdings will vary over time.

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How have recent market events changed equity valuations?

Losses since April have made valuations more compelling, in my estimation, pushing the price of the S&P 500 Index to roughly 12 times this year’s earnings. Meanwhile, many U.S. corporations continue to generate near-record profits. One of the reasons I am cautiously optimistic about the coming fiscal year is that today’s negative sentiment may provide a catalyst for change in psychology if investors refocus on the evidence of record earnings rather than on the fear of another recession. However, it is important to recognize that this optimism is rooted in a scenario in which investors gain confidence in the economic rebound.

What are some examples of stocks that aided performance during the year?

Apple, the fund’s largest holding, was also one of its top performers during the year. Apple has consistently beaten sales and earnings estimates; enjoys a loyal customer base; and has a tremendous balance sheet, with no debt and more than $76 billion in cash. Other top performers included Irish biotechnology company Elan and U.S. health insurer Aetna.

Did you employ derivatives to execute any strategies during the period?

Derivatives generally represent a small amount of the fund’s assets and are primarily used to help improve a risk-reward relationship versus owning the underlying security. It is also a means to help manage overall risk in the portfolio.

How are you approaching the coming fiscal year?

Throughout my career, I have sought to find stocks that represent better-than-average growth potential but are trading at below-average valuation. As a result of recent


This chart shows the fund’s largest allocation shifts, by percentage, over the past six months. Weightings are shown as a percentage of net assets. Chart data reflect a new calculation methodology that went into effect within the past six months. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities and the exclusion of as-of trades, if any, and the use of different classifications of securities for presentation purposes. Holdings will vary over time.

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market performance, I believe the portfolio — which is diversified across multiple sectors and companies — now exhibits some of the most compelling growth and valuation metrics of my career. Many stocks in the portfolio have performed poorly despite the fact that earnings expectations haven’t changed. The valuation side of this equation can help act as a buffer during periods when equity prices are falling.

We are in a period of unusually high macroeconomic uncertainty and volatility. Such periods often create greater inefficiencies and greater stocks-picking opportunities. I am focused on taking advantage of such opportunities, applying my investment approach consistently, factoring in the possibility of different economic scenarios, and staying flexible.

Thanks, Nick, for your time and insights.

The views expressed in this report are exclusively those of Putnam Management and are subject to change. They are not meant as investment advice.

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk.


Portfolio Manager Nick C. Thakore is Co-Head of U.S. Equities at Putnam. He has an M.B.A. from the Wharton School of the University of Pennsylvania and a B.B.A. from the University of Michigan. Nick joined Putnam in 2008 and has been in the investment industry since 1993.

IN THE NEWS

Lower corporate debt, higher profits, and record cash on hand are factors fueling a positive outlook for U.S. mergers and acquisitions, according to a recent study of the world’s 1,000 largest companies by KPMG International. Among the 338 U.S. companies in the survey, net debt is projected to decline 34% by June 2012, compared with a 19% decline projected for their global peers. Lower debt levels may enhance the ability of corporations to pursue acquisitions. U.S. corporations in general have also continued to report robust profits this year. Through August 9, of the 441 S&P 500 companies that had reported second-quarter earnings, 69.6% beat analyst estimates, according to Standard & Poor’s research. By the end of the first quarter, U.S. firms held nearly $2 trillion in cash on hand, which could be used to fund business expansion, dividends, stock buy-backs, or mergers and acquisitions.

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Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended July 31, 2011, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance as of the most recent calendar quarter-end and expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class R and class Y shares are not available to all investors. See the Terms and Definitions section in this report for definitions of the share classes offered by your fund.

Fund performance Total return for periods ended 7/31/11

  Class A  Class B  Class C  Class M  Class R  Class Y 
(inception dates)  (4/1/69)  (4/27/92)  (7/26/99)  (12/1/94)  (1/21/03) (3/31/94)  

  Before  After              Before   After  Net  Net 
  sales  sales    Before  After  Before  After  sales  sales  asset  asset 
charge   charge   CDSC   CDSC   CDSC   CDSC   charge  charge   value  value 

Annual average                     
(life of fund)  10.72%  10.57%  9.75%  9.75%  9.89%  9.89%  10.04%  9.94%  10.45%  10.84% 

10 years  24.44  17.29  15.33  15.33  15.37  15.37  18.30  14.15  21.45  27.55 
Annual average  2.21  1.61  1.44  1.44  1.44  1.44  1.69  1.33  1.96  2.46 

5 years  42.63  34.42  37.24  35.24  37.28  37.28  39.07  34.22  40.82  44.41 
Annual average  7.36  6.09  6.54  6.22  6.54  6.54  6.82  6.06  7.09  7.63 

3 years  36.48  28.66  33.45  30.45  33.40  33.40  34.48  29.78  35.51  37.51 
Annual average  10.92  8.76  10.10  9.27  10.08  10.08  10.38  9.08  10.66  11.20 

1 year  13.73  7.18  12.87  7.87  12.86  11.86  13.13  9.19  13.46  13.99 

 

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A and M shares reflect the deduction of the maximum 5.75% and 3.50% sales charge, respectively, levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable CDSC, which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class R and Y shares have no initial sales charge or CDSC. Performance for class B, C, M, R, and Y shares before their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares, except for class Y shares, for which 12b-1 fees are not applicable.

Recent performance may have benefitted from one or more legal settlements.

For a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Class B share performance does not reflect conversion to class A shares.

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Comparative index returns For periods ended 7/31/11   
 
    Lipper Large-Cap Growth Funds 
  Russell 1000 Growth Index  category average* 

Annual average (life of fund)  —†  9.44% 

10 years  26.71%  24.17 
Annual average  2.40  2.10 

5 years  30.85  24.41 
Annual average  5.52  4.37 

3 years  16.87  10.42 
Annual average  5.33  3.26 

1 year  24.76  23.32 

 

Index and Lipper results should be compared with fund performance before sales charge, before CDSC, or at net asset value.

* Over the 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 7/31/11, there were 780, 688, 596, 373, and 11 funds, respectively, in this Lipper category.

† The fund’s benchmark, the Russell 1000 Growth Index, was introduced on 12/31/78, which post-dates the inception of the fund’s class A shares.


Past performance does not indicate future results. At the end of the same time period, a $10,000 investment in the fund’s class B and class C shares would have been valued at $11,533 and $11,537, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class M shares ($9,650 after sales charge) would have been valued at $11,415. A $10,000 investment in the fund’s class R and class Y shares would have been valued at $12,145 and $12,755, respectively.

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Fund price and distribution information For the 12-month period ended 7/31/11

Distributions  Class A  Class B  Class C  Class M  Class R  Class Y 

Number  1        1  1 

Income  $0.084        $0.067  $0.136 

Capital gains             

Total  $0.084        $0.067  $0.136 

  Before  After  Net  Net  Before  After  Net  Net 
  sales  sales  asset  asset  sales  sales  asset  asset 
Share value  charge  charge  value  value  charge  charge  value  value 

7/31/10  $20.12  $21.35  $17.09  $18.74  $18.59  $19.26  $19.80  $20.97 

7/31/11  22.80  24.19  19.29  21.15  21.03  21.79  22.40  23.77 

 

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A and M shares, if applicable, do not take into account any sales charge levied at the time of purchase. After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (5.75% for class A shares and 3.50% for class M shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

Fund performance as of most recent calendar quarter
Total return for periods ended 6/30/11

  Class A  Class B  Class C  Class M  Class R  Class Y 
(inception dates)  (4/1/69)  (4/27/92)  (7/26/99)  (12/1/94)  (1/21/03)   (3/31/94) 

  Before   After          Before  After  Net  Net 
  sales  sales   Before  After  Before  After   sales  sales  asset  asset 
charge   charge   CDSC   CDSC   CDSC   CDSC   charge   charge   value  value 

Annual average                     
(life of fund)  10.82%  10.67%  9.85%  9.85%  9.99%  9.99%  10.13%  10.04%  10.54%  10.94% 

10 years  24.46  17.29  15.44  15.44  15.44  15.44  18.36  14.21  21.49  27.68 
Annual average  2.21  1.61  1.45  1.45  1.45  1.45  1.70  1.34  1.97  2.47 

5 years  42.26  34.08  36.97  34.97  37.01  37.01  38.68  33.83  40.49  44.10 
Annual average  7.30  6.04  6.49  6.18  6.50  6.50  6.76  6.00  7.04  7.58 

3 years  38.21  30.26  35.12  32.12  35.15  35.15  36.17  31.41  37.27  39.26 
Annual average  11.39  9.21  10.55  9.73  10.56  10.56  10.84  9.53  11.14  11.67 

1 year  28.64  21.23  27.76  22.76  27.65  26.65  28.01  23.56  28.33  28.97 

 

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Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.

Expense ratios

  Class A  Class B  Class C  Class M  Class R  Class Y 

Total annual operating expenses for the fiscal year             
ended 7/31/10  1.30%  2.05%  2.05%  1.80%  1.55%  1.05% 

Annualized expense ratio for the six-month period             
ended 7/31/11*†  1.13%  1.88%  1.88%  1.63%  1.38%  0.88% 

 

Fiscal-year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report. Expenses are shown as a percentage of average net assets.

* For the fund’s most recent fiscal half year; may differ from expense ratios based on one-year data in the financial highlights.

† Includes a decrease of -0.03% in annualized performance fees for the six months ended 7/31/11.

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in the fund from February 1, 2011, to July 31, 2011. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

  Class A  Class B  Class C  Class M  Class R  Class Y 

Expenses paid per $1,000*†  $5.43  $9.02  $9.01  $7.82  $6.63  $4.23 

Ending value (after expenses)  $937.50  $934.10  $933.80  $935.10  $936.40  $938.80 

 

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 7/31/11. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

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Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended July 31, 2011, use the following calculation method. To find the value of your investment on February 1, 2011, call Putnam at 1-800-225-1581.


Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the following table shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

  Class A  Class B  Class C  Class M  Class R  Class Y 

Expenses paid per $1,000*†  $5.66  $9.39  $9.39  $8.15  $6.90  $4.41 

Ending value (after expenses)  $1,019.19  $1,015.47  $1,015.47  $1,016.71  $1,017.95  $1,020.43 

 

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 7/31/11. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

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Terms and definitions

Important terms

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.

Before sales charge, or net asset value, is the price, or value, of one share of a mutual fund, without a sales charge. Before-sales-charge figures fluctuate with market conditions, and are calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class.

After sales charge is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. After-sales-charge performance figures shown here assume the 5.75% maximum sales charge for class A shares and 3.50% for class M shares.

Contingent deferred sales charge (CDSC) is generally a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund’s class B CDSC declines over time from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase.

Share classes

Class A shares are generally subject to an initial sales charge and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class B shares are not subject to an initial sales charge. They may be subject to a CDSC.

Class C shares are not subject to an initial sales charge and are subject to a CDSC only if the shares are redeemed during the first year.

Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class R shares are not subject to an initial sales charge or CDSC and are available only to certain defined contribution plans.

Class Y shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are generally only available to corporate and institutional clients and clients in other approved programs.

Comparative indexes

Barclays Capital U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.

BofA (Bank of America) Merrill Lynch U.S. 3-Month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.

Russell 1000 Growth Index is an unmanaged index of those companies in the large-cap Russell 1000 Index chosen for their growth orientation.

S&P 500 Index is an unmanaged index of common stock performance.

Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.

Lipper is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.

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Trustee approval of management contract

General conclusions

The Board of Trustees of the Putnam funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Investment Management (“Putnam Management”) and the sub-management contract with respect to your fund between Putnam Management and its affiliate, Putnam Investments Limited (“PIL”).

The Board of Trustees, with the assistance of its Contract Committee, which consists solely of Trustees who are not “interested persons” (as this term is defined in the Investment Company Act of 1940, as amended) of the Putnam funds (“Independent Trustees”), requests and evaluates all information it deems reasonably necessary under the circumstances in connection with its annual contract review. Over the course of several months ending in June 2011, the Contract Committee met on a number of occasions with representatives of Putnam Management, and separately in executive session, to consider the information that Putnam Management provided and other information developed with the assistance of the Board’s independent counsel and independent staff. The Contract Committee reviewed and discussed key aspects of this information with all of the Independent Trustees on a number of occasions. At the Trustees’ June 17, 2011 meeting, the Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management and sub-management contracts, effective July 1, 2011. (Because PIL is an affiliate of Putnam Management and Putnam Management remains fully responsible for all services provided by PIL, the Trustees have not evaluated PIL as a separate entity, and all subsequent references to Putnam Management below should be deemed to include reference to PIL as necessary or appropriate in the context.)

The Independent Trustees’ approval was based on the following conclusions:

That the fee schedule in effect for your fund represented reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds, and the costs incurred by Putnam Management in providing services, and

That the fee schedule represented an appropriate sharing between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the fund at current asset levels.

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the management arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that some aspects of the arrangements may receive greater scrutiny in some years than others, and that the Trustees’ conclusions may be based, in part, on their consideration of fee arrangements in previous years.

Management fee schedules and total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints. In reviewing management fees, the Trustees generally focus their attention on material changes in circumstances — for example, changes in assets under management or investment style, changes

16



in Putnam Management’s operating costs, or changes in competitive practices in the mutual fund industry — that suggest that consideration of fee changes might be warranted. The Trustees concluded that the circumstances did not warrant changes to the management fee structure of your fund.

Most of the open-end Putnam funds have new management contracts, with new fee schedules reflecting the implementation of more competitive fee levels for many funds, complex-wide breakpoints for the open-end funds, and performance fees for some funds. These new management contracts have been in effect for a little over a year — since January or, for a few funds, February, 2010. The Trustees approved the new management contracts on July 10, 2009, and fund shareholders subsequently approved the contracts by overwhelming majorities of the shares voted.

Because these management contracts had been implemented only recently, the Contract Committee had limited practical experience with the operation of the new fee structures. Under its new management contract, your fund has the benefit of breakpoints in its management fee that provide shareholders with significant economies of scale in the form of reduced fee levels as assets under management in the Putnam family of funds increase. In addition, your fund’s new management contract provides that its management fees will be adjusted up or down depending upon whether your fund’s performance is better or worse than the performance of an appropriate index of securities prices specified in the management contract. To ensure that the performance comparison was being made over a reasonable period of time, your fund did not begin accruing performance adjustments until January 2011, by which time there was a twelve month period under the new management contract based on which to determine performance adjustments. The Contract Committee observed that the complex-wide breakpoints of the open-end funds and your fund’s performance fee had only been in place for a short while, and the Trustees will examine the operation of this new breakpoint structure and performance fee in future years in light of further experience.

As in the past, the Trustees also focused on the competitiveness of each fund’s total expense ratio. In order to ensure that expenses of the Putnam funds continue to meet evolving competitive standards, the Trustees and Putnam Management agreed in 2009 to implement certain expense limitations. These expense limitations serve in particular to maintain competitive expense levels for funds with large numbers of small shareholder accounts and funds with relatively small net assets. Most funds had sufficiently low expenses that these expense limitations did not apply. However, in the case of your fund, the first of the expense limitations applied during its fiscal year ending in 2010. The expense limitations were: (i) a contractual expense limitation applicable to all retail open-end funds of 37.5 basis points on investor servicing fees and expenses and (ii) a contractual expense limitation applicable to all open-end funds of 20 basis points on so-called “other expenses” (i.e., all expenses exclusive of management fees, investor servicing fees, distribution fees, investment-related expenses, interest, taxes, brokerage commissions and extraordinary expenses). Putnam Management’s support for these expense limitations was an important factor in the Trustees’ decision to approve the continuance of your fund’s management and sub-management contracts.

The Trustees reviewed comparative fee and expense information for a custom group of competitive funds selected by Lipper Inc. This comparative information included your fund’s percentile ranking for effective management fees and total expenses (excluding any applicable 12b-1 fee), which provides a general indication of your fund’s relative standing. In the custom peer group, your fund ranked in the 1st quintile in effective management fees

17



(determined for your fund and the other funds in the custom peer group based on fund asset size and the applicable contractual management fee schedule) and in the 3rd quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2010 (the first quintile representing the least expensive funds and the fifth quintile the most expensive funds). The fee and expense data reported by Lipper as of December 31, 2010 reflected the most recent fiscal year-end data available in Lipper’s database at that time.

In connection with their review of the management fees and total expenses of the Putnam funds, the Trustees also reviewed the costs of the services provided and the profits realized by Putnam Management and its affiliates from their contractual relationships with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management, investor servicing and distribution services provided to the funds. In this regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability, allocated on a fund-by-fund basis, with respect to the funds’ management, distribution, and investor servicing contracts. For each fund, the analysis presented information about revenues, expenses and profitability for each of the agreements separately and for the agreements taken together on a combined basis. The Trustees concluded that, at current asset levels, the fee schedules in place represented reasonable compensation for the services being provided and represented an appropriate sharing of such economies of scale as may exist in the management of the funds at that time.

The information examined by the Trustees as part of their annual contract review for the Putnam funds has included for many years information regarding fees charged by Putnam Management and its affiliates to institutional clients such as defined benefit pension plans, college endowments, and the like. This information included comparisons of those fees with fees charged to the funds, as well as an assessment of the differences in the services provided to these different types of clients. The Trustees observed that the differences in fee rates between institutional clients and mutual funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients may reflect historical competitive forces operating in separate markets. The Trustees considered the fact that in many cases fee rates across different asset classes are higher on average for mutual funds than for institutional clients, as well as the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to its institutional clients. The Trustees did not rely on these comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees’ evaluation of the quality of services provided by Putnam Management under your fund’s management contract. The Trustees were assisted in their review of the Putnam funds’ investment process and performance by the work of several investment oversight committees of the Trustees, which met on a regular basis with the funds’ portfolio teams and with the Chief Investment Officer and other members of Putnam Management’s Investment Division throughout the year. The Trustees concluded that Putnam Management generally provides a high-quality investment process — based on the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to them, and in general Putnam Management’s ability to attract and retain high-quality personnel — but also recognized that this does not guarantee favorable investment results for

18



every fund in every time period. The Trustees considered the investment performance of each fund over multiple time periods and considered information comparing each fund’s performance with various benchmarks and with the performance of competitive funds.

The Committee noted the substantial improvement in the performance of most Putnam funds during the 2009–2010 period and Putnam Management’s ongoing efforts to strengthen its investment personnel and processes. The Committee also noted the disappointing investment performance of some funds for periods ended December 31, 2010 and considered information provided by Putnam Management regarding the factors contributing to the underperformance and actions being taken to improve the performance of these particular funds. The Trustees indicated their intention to continue to monitor performance trends to assess the effectiveness of these efforts and to evaluate whether additional actions to address areas of underperformance are warranted.

In the case of your fund, the Trustees considered that its class A share cumulative total return performance at net asset value was in the following quartiles of its Lipper Inc. peer group (Lipper Large-Cap Growth Funds) for the one-year, three-year and five-year periods ended December 31, 2010 (the first quartile representing the best-performing funds and the fourth quartile the worst-performing funds):

One-year period  1st 

Three-year period  1st 

Five-year period  1st 

 

Over the one-year, three-year and five-year periods ended December 31, 2010, there were 857, 753 and 634 funds, respectively, in your fund’s Lipper peer group. (When considering performance information, shareholders should be mindful that past performance is not a guarantee of future results.)

Brokerage and soft-dollar allocations; investor servicing

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage allocation and the use of soft dollars, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that are expected to be useful to Putnam Management in managing the assets of the fund and of other clients. Subject to policies established by the Trustees, soft-dollar credits acquired through these means are used primarily to supplement Putnam Management’s internal research efforts. However, the Trustees noted that a portion of available soft-dollar credits continues to be allocated to the payment of fund expenses. The Trustees indicated their continued intent to monitor regulatory developments in this area with the assistance of their Brokerage Committee and also indicated their continued intent to monitor the potential benefits associated with fund brokerage and soft-dollar allocations and trends in industry practices to ensure that the principle of seeking best price and execution remains paramount in the portfolio trading process.

Putnam Management may also receive benefits from payments that the funds make to Putnam Management’s affiliates for investor or distribution services. In conjunction with the annual review of your fund’s management contract, the Trustees reviewed your fund’s investor servicing agreement with Putnam Investor Services, Inc. (“PSERV”) and its distributor’s contracts and distribution plans with Putnam Retail Management Limited Partnership (“PRM”), both of which are affiliates of Putnam Management. The Trustees concluded that the fees payable by the funds to PSERV and PRM, as applicable, for such services are reasonable in relation to the nature and quality of such services.

19



Other information for shareholders

Important notice regarding Putnam’s privacy policy

In order to conduct business with our shareholders, we must obtain certain personal information such as account holders’ names, addresses, Social Security numbers, and dates of birth. Using this information, we are able to maintain accurate records of accounts and transactions.

It is our policy to protect the confidentiality of our shareholder information, whether or not a shareholder currently owns shares of our funds. In particular, it is our policy not to sell information about you or your accounts to outside marketing firms. We have safeguards in place designed to prevent unauthorized access to our computer systems and procedures to protect personal information from unauthorized use.

Under certain circumstances, we must share account information with outside vendors who provide services to us, such as mailings and proxy solicitations. In these cases, the service providers enter into confidentiality agreements with us, and we provide only the information necessary to process transactions and perform other services related to your account. Finally, it is our policy to share account information with your financial representative, if you’ve listed one on your Putnam account.

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2011, are available in the Individual Investors section at putnam.com, and on the SEC’s website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain the fund’s Forms N-Q on the SEC’s website at www.sec.gov. In addition, the fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s website or the operation of the Public Reference Room.

Trustee and employee fund ownership

Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam mutual funds. As of July 31, 2011, Putnam employees had approximately $350,000,000 and the Trustees had approximately $74,000,000 invested in Putnam mutual funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.

20



Financial statements

These sections of the report, as well as the accompanying Notes, preceded by the Report of Independent Registered Public Accounting Firm, constitute the fund’s financial statements.

The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal year.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned.

Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.

21



Report of Independent Registered Public Accounting Firm

To the Trustees and Shareholders of
Putnam Voyager Fund:

In our opinion, the accompanying statement of assets and liabilities, including the portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Putnam Voyager Fund (the “fund”) at July 31, 2011, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments owned at July 31, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
September 12, 2011

22



The fund’s portfolio 7/31/11

COMMON STOCKS (92.5%)*  Shares  Value 

Aerospace and defense (2.6%)     
Embraer SA ADR (Brazil)  554,000  $16,354,080 

GeoEye, Inc. †  284,900  11,384,604 

Honeywell International, Inc.  480,000  25,488,000 

Northrop Grumman Corp.  176,000  10,649,760 

Precision Castparts Corp.  361,700  58,371,146 

    122,247,590 
Airlines (1.8%)     
Delta Air Lines, Inc. †  4,043,683  31,904,659 

United Continental Holdings, Inc. † S  1,518,198  27,509,748 

US Airways Group, Inc. † S  4,176,219  26,059,607 

    85,474,014 
Auto components (0.1%)     
Johnson Controls, Inc. †  176,600  6,525,370 

    6,525,370 
Automobiles (1.9%)     
Fiat SpA (Italy)  1,239,271  12,180,886 

Ford Motor Co. †  380,700  4,648,347 

General Motors Co. †  566,699  15,686,228 

Nissan Motor Co., Ltd. (Japan)  2,217,200  23,647,832 

Porsche Automobil Holding SE (Preference) (Germany)  306,109  23,510,617 

Volkswagen AG (Preference) (Germany)  56,611  11,309,205 

    90,983,115 
Biotechnology (2.0%)     
Celgene Corp. †  730,900  43,342,370 

Cubist Pharmaceuticals, Inc. †  35,700  1,212,729 

Dendreon Corp. † S  298,300  11,007,270 

Human Genome Sciences, Inc. † S  1,335,300  28,054,653 

United Therapeutics Corp. † S  200,500  11,504,690 

    95,121,712 
Capital markets (2.4%)     
Blackstone Group LP (The)  1,223,163  20,316,737 

Goldman Sachs Group, Inc. (The)  398,005  53,718,735 

KKR & Co. LP  767,459  11,243,274 

Morgan Stanley  301,300  6,703,925 

State Street Corp.  459,103  19,039,001 

    111,021,672 
Chemicals (2.1%)     
Dow Chemical Co. (The)  673,600  23,488,432 

Huntsman Corp.  666,900  12,737,790 

LyondellBasell Industries NV Class A (Netherlands)  853,400  33,675,164 

Monsanto Co.  225,400  16,562,392 

Mosaic Co. (The)  72,300  5,113,056 

Potash Corp. of Saskatchewan, Inc. (Canada)  127,200  7,353,432 

    98,930,266 
Commercial banks (1.5%)     
China Construction Bank Corp. (China)  9,006,000  7,256,520 

Fifth Third Bancorp  983,500  12,441,275 

Industrial and Commercial Bank of China, Ltd. (China)  12,677,000  9,645,128 

Wells Fargo & Co.  1,446,500  40,415,210 

    69,758,133 

 

23



COMMON STOCKS (92.5%)* cont.  Shares  Value 

Communications equipment (4.4%)     
Alcatel-Lucent ADR (France) † S  1,081,000  $4,378,050 

Cisco Systems, Inc.  3,401,847  54,327,497 

F5 Networks, Inc. †  84,300  7,880,364 

Juniper Networks, Inc. †  579,100  13,545,149 

Qualcomm, Inc.  2,363,009  129,445,633 

    209,576,693 
Computers and peripherals (11.4%)     
Apple, Inc. †  946,000  369,394,080 

EMC Corp. † S  1,536,800  40,079,744 

Hewlett-Packard Co.  1,955,000  68,737,800 

NetApp, Inc. †  92,500  4,395,600 

SanDisk Corp. †  1,351,900  57,496,307 

    540,103,531 
Construction and engineering (1.0%)     
Aecom Technology Corp. † S  191,500  4,737,710 

Fluor Corp.  149,000  9,465,970 

KBR, Inc.  377,300  13,450,745 

KEPCO Engineering & Construction Co., Inc. (South Korea)  242,897  17,279,024 

    44,933,449 
Consumer finance (0.1%)     
Air Lease Corp. 144A F  140,172  3,424,402 

    3,424,402 
Diversified financial services (1.2%)     
Bank of America Corp.  1,494,855  14,515,042 

Citigroup, Inc.  437,200  16,762,248 

CME Group, Inc.  22,400  6,477,856 

JPMorgan Chase & Co.  454,500  18,384,525 

    56,139,671 
Diversified telecommunication services (0.2%)     
Verizon Communications, Inc.  219,600  7,749,684 

    7,749,684 
Electrical equipment (0.9%)     
China Ming Yang Wind Power Group, Ltd. ADS (China) † S  100,769  523,999 

Emerson Electric Co.  397,300  19,503,457 

GrafTech International, Ltd. †  1,282,300  24,697,098 

    44,724,554 
Electronic equipment, instruments, and components (1.6%)     
Corning, Inc.  2,884,500  45,892,395 

KEMET Corp. †  808,878  9,868,312 

TE Connectivity, Ltd. (Switzerland)  614,900  21,171,007 

    76,931,714 
Energy equipment and services (3.7%)     
Baker Hughes, Inc.  249,400  19,298,572 

National Oilwell Varco, Inc.  488,800  39,382,616 

Schlumberger, Ltd.  1,279,487  115,627,240 

    174,308,428 
Food products (0.2%)     
Zhongpin, Inc. (China) † S  1,146,100  11,839,213 

    11,839,213 
Health-care equipment and supplies (0.6%)     
Baxter International, Inc.  387,700  22,552,509 

China Medical Technologies, Inc. ADR (China) † S  932,200  6,171,164 

    28,723,673 

 

24



COMMON STOCKS (92.5%)* cont.  Shares  Value 

Health-care providers and services (2.5%)     
Aetna, Inc.  766,700  $31,810,383 

CIGNA Corp.  295,300  14,697,081 

Express Scripts, Inc. †  1,087,376  59,001,022 

Lincare Holdings, Inc. S  404,100  10,340,919 

    115,849,405 
Health-care technology (0.3%)     
SXC Health Solutions Corp. (Canada) †  237,671  15,004,170 

    15,004,170 
Hotels, restaurants, and leisure (1.4%)     
Carnival Corp.  332,900  11,085,570 

Home Inns & Hotels Management, Inc. ADR (China) †  227,600  8,771,704 

Las Vegas Sands Corp. †  564,600  26,637,828 

Starbucks Corp.  543,900  21,804,951 

    68,300,053 
Household durables (0.8%)     
PDG Realty SA Empreendimentos e Participacoes (Brazil)  4,060,000  21,451,104 

Rossi Residencial SA (Brazil)  972,300  7,298,515 

Skyworth Digital Holdings, Ltd. (China)  8,646,000  5,568,725 

SodaStream International, Ltd. (Israel) † S  57,956  4,251,073 

    38,569,417 
Household products (0.2%)     
Procter & Gamble Co. (The)  163,400  10,047,466 

    10,047,466 
Independent power producers and energy traders (0.1%)     
China Power New Energy Development Co., Ltd. (China) †  44,092,000  2,630,568 

China WindPower Group, Ltd. (China) †  35,310,000  2,718,227 

    5,348,795 
Industrial conglomerates (2.3%)     
General Electric Co.  3,103,300  55,580,103 

Tyco International, Ltd.  1,199,200  53,112,568 

    108,692,671 
Insurance (3.4%)     
Aflac, Inc.  232,846  10,724,887 

Assured Guaranty, Ltd. (Bermuda)  6,269,172  88,708,784 

Hartford Financial Services Group, Inc. (The)  1,628,576  38,141,250 

MBIA, Inc. † S  1,361,462  12,525,450 

Ping An Insurance (Group) Co. of China, Ltd. (China)  1,016,000  9,887,491 

    159,987,862 
Internet and catalog retail (0.9%)     
Priceline.com, Inc. †  76,900  41,345,285 

    41,345,285 
Internet software and services (3.4%)     
Baidu, Inc. ADR (China) †  353,000  55,445,710 

Google, Inc. Class A †  155,540  93,897,943 

Mail.ru Group, Ltd. 144A GDR (Russia) S  337,107  11,908,067 

    161,251,720 
IT Services (2.0%)     
Accenture PLC Class A S  89,900  5,316,686 

Cognizant Technology Solutions Corp. †  142,500  9,956,475 

Mastercard, Inc. Class A  17,200  5,215,900 

 

25



COMMON STOCKS (92.5%)* cont.  Shares  Value 

IT Services cont.     
Unisys Corp. † §  2,827,056  $58,717,953 

Visa, Inc. Class A S  186,907  15,988,025 

    95,195,039 
Leisure equipment and products (0.6%)     
Brunswick Corp.  279,300  6,097,119 

Hasbro, Inc.  511,200  20,223,072 

    26,320,191 
Life sciences tools and services (0.8%)     
Sequenom, Inc. † S  1,515,199  10,697,305 

Thermo Fisher Scientific, Inc. †  436,600  26,235,294 

    36,932,599 
Machinery (4.9%)     
Cummins, Inc.  330,800  34,694,304 

Deere & Co.  356,000  27,949,560 

Eaton Corp.  399,200  19,141,640 

Ingersoll-Rand PLC  1,018,400  38,108,528 

Parker Hannifin Corp.  941,800  74,421,036 

Stanley Black & Decker, Inc.  538,000  35,384,260 

    229,699,328 
Media (2.5%)     
Comcast Corp. Class A  2,444,038  58,705,793 

DIRECTV Class A †  174,369  8,837,021 

Liberty Media Corp. — Capital Ser. A †  31,985  2,552,723 

News Corp. Class A  1,573,100  25,201,062 

News Corp. Class B  271,500  4,479,750 

Walt Disney Co. (The)  480,500  18,556,910 

    118,333,259 
Metals and mining (4.2%)     
Cliffs Natural Resources, Inc.  255,200  22,922,064 

Freeport-McMoRan Copper & Gold, Inc. Class B (Indonesia)  848,114  44,916,117 

Nucor Corp.  262,800  10,220,292 

Rio Tinto PLC (United Kingdom)  316,991  22,149,480 

Teck Resources, Ltd. Class B (Canada)  538,500  26,684,032 

Vedanta Resources PLC (United Kingdom)  2,508,718  72,300,588 

    199,192,573 
Multiline retail (1.0%)     
Kohl’s Corp.  386,313  21,135,184 

Target Corp.  530,400  27,310,296 

    48,445,480 
Office electronics (0.9%)     
Xerox Corp.  4,373,700  40,806,621 

    40,806,621 
Oil, gas, and consumable fuels (6.1%)     
Anadarko Petroleum Corp.  71,500  5,903,040 

Apache Corp.  367,320  45,444,830 

BG Group PLC (United Kingdom)  1,428,882  33,641,709 

Chevron Corp.  112,800  11,733,456 

CONSOL Energy, Inc.  101,500  5,440,400 

Hess Corp.  576,800  39,545,408 

Noble Energy, Inc.  480,600  47,906,208 

 

26



COMMON STOCKS (92.5%)* cont.  Shares  Value 

Oil, gas, and consumable fuels cont.     
Occidental Petroleum Corp.  586,000  $57,533,480 

Petrohawk Energy Corp. †  384,700  14,691,693 

Petroleo Brasileiro SA ADR (Brazil)  754,700  25,637,159 

    287,477,383 
Paper and forest products (0.5%)     
International Paper Co.  760,700  22,592,790 

    22,592,790 
Pharmaceuticals (1.5%)     
Abbott Laboratories  110,900  5,691,388 

Alapis Hldg. Industrial and Commercial SA of Pharmaceutical     
Chemical Products (Greece) †  615,938  318,460 

Auxilium Pharmaceuticals, Inc. † S  926,900  17,370,106 

Elan Corp. PLC ADR (Ireland) †  1,005,200  11,117,512 

Jazz Pharmaceuticals, Inc. † S  172,400  6,977,028 

Johnson & Johnson  39,495  2,558,881 

Merck & Co., Inc.  273,500  9,334,555 

Pfizer, Inc.  419,732  8,075,644 

Sanofi (France)  9,035  701,200 

Sanofi CVR (France) †  2,181,700  2,530,772 

Teva Pharmaceutical Industries, Ltd. ADR (Israel)  132,786  6,193,139 

    70,868,685 
Real estate investment trusts (REITs) (0.1%)     
CreXus Investment Corp. R  419,800  4,412,098 

    4,412,098 
Real estate management and development (1.0%)     
BR Malls Participacoes SA (Brazil)  2,322,692  27,028,233 

CB Richard Ellis Group, Inc. Class A †  890,700  19,417,260 

    46,445,493 
Semiconductors and semiconductor equipment (3.5%)     
First Solar, Inc. † S  744,359  88,005,565 

Marvell Technology Group, Ltd. †  5,123,398  75,928,758 

    163,934,323 
Software (3.6%)     
Longtop Financial Technologies Ltd. ADR (Hong Kong) † F S  729,830  2,189,490 

Microsoft Corp.  971,400  26,616,360 

Oracle Corp.  3,347,100  102,354,318 

Perfect World Co., Ltd. ADR (China) †  83,975  1,661,865 

Salesforce.com, Inc. † S  101,550  14,695,301 

Synchronoss Technologies, Inc. † S  326,800  9,558,900 

VMware, Inc. Class A †  122,300  12,271,582 

    169,347,816 
Specialty retail (2.8%)     
Abercrombie & Fitch Co. Class A  110,800  8,101,696 

Bed Bath & Beyond, Inc. †  431,200  25,220,888 

Best Buy Co., Inc. S  685,800  18,928,080 

Lowe’s Cos., Inc.  2,965,500  63,995,490 

Staples, Inc. S  997,100  16,013,426 

    132,259,580 
Textiles, apparel, and luxury goods (0.1%)     
Pandora A/S (Denmark) S  132,760  3,765,122 

    3,765,122 

 

27



COMMON STOCKS (92.5%)* cont.  Shares  Value 

Tobacco (0.9%)     
Philip Morris International, Inc.  610,869  $43,475,547 

    43,475,547 
Trading companies and distributors (0.5%)     
United Rentals, Inc. † S  932,700  21,461,427 

    21,461,427 
 
Total common stocks (cost $4,473,928,788)    $4,363,879,082 
   

 

WARRANTS (2.6%)* †  Expiration  Strike     
  date  price  Warrants  Value 

Bank of America Corp. W  10/28/18  $30.79  13,749,138  $21,311,164 

Citigroup, Inc.  1/4/19  106.10  14,477,692  10,134,384 

Ford Motor Co.  1/1/13  9.20  2,908,376  11,197,248 

General Motors Co.  7/10/16  10.00  165,890  3,123,709 

Hartford Financial Services Group, Inc. (The) W  6/26/19  9.773  745,108  11,437,408 

JPMorgan Chase & Co. W  10/28/18  42.42  2,680,626  35,813,163 

Wells Fargo & Co. W  10/28/18  34.01  3,092,246  28,232,206 

Total warrants (cost $134,532,405)        $121,249,282 
 
 
PURCHASED OPTIONS  Expiration date/  Contract   
OUTSTANDING (1.2%)*  strike price    amount  Value 

Baidu, Inc. (Put)  Aug-11/$160.00  153,638  $1,225,125 

Best Buy Co., Inc. (Call)  Jan-12/32.50    430,378  343,800 

Best Buy Co., Inc. (Call)  Jan-12/35.00    2,061,589  844,951 

Best Buy Co., Inc. (Call)  Jan-12/32.50    3,002,205  2,348,238 

Cisco Systems, Inc. (Call)  Sep-11/16.00  3,238,110  2,737,498 

Cisco Systems, Inc. (Call)  Sep-11/19.00  4,147,838  497,118 

Cisco Systems, Inc. (Call)  Dec-11/19.00  6,855,339  2,419,249 

CurrencyShares Euro Trust (Put)  Aug-11/138.51  909,795  490,470 

Financial Select Sector SPDR Fund (Call)  Sep-11/19.00  1,977,443  10,085 

First Solar, Inc. (Call)  Aug-11/135.00  711,858  1,104,946 

First Solar, Inc. (Call)  Aug-11/135.00  1,102,878  1,674,610 

General Electric Co. (Call)  Aug-11/21.00  4,149,545  74,277 

General Electric Co. (Call)  Dec-11/20.00  2,073,578  860,535 

General Electric Co. (Call)  Aug-11/20.00  3,761,042  139,121 

Goldman Sachs Group, Inc. (Call)  Jan-12/155.00  1,523,724  4,900,880 

Hartford Financial Services Group, Inc. (The) (Call)  Dec-11/20.00  1,045,495  4,423,918 

Hewlett-Packard Co. (Call)  Aug-11/47.50  1,676,326  5,046 

Hewlett-Packard Co. (Call)  Dec-11/42.00  1,294,100  703,465 

Hewlett-Packard Co. (Call)  Dec-11/38.00  2,011,580  2,881,790 

Hewlett-Packard Co. (Call)  Aug-11/47.50  526,046  1,583 

iShares FTSE China 25 Index Fund (Call)  Aug-11/46.00  2,709,486  526,101 

iShares FTSE China 25 Index Fund (Call)  Aug-11/46.00  4,357,305  846,058 

iShares MSCI Emerging Markets Index (Call)  Aug-11/51.00  1,691,645  367,929 

iShares MSCI Emerging Markets Index (Call)  Aug-11/51.00  2,144,810  466,492 

iShares MSCI Emerging Markets Index (Call)  Aug-11/51.00  3,702,365  888,568 

iShares Russell 2000 Index Fund (Call)  Aug-11/49.00  1,510,265  29,042 

JPMorgan Chase & Co. (Call)  Dec-11/46.00  4,124,888  3,847,415 

 

28



PURCHASED OPTIONS  Expiration date/  Contract   
OUTSTANDING (1.2%)* cont.  strike price  amount  Value 

JPMorgan Chase & Co. (Call)  Jan-12/$50.00  793,609  $343,618 

JPMorgan Chase & Co. (Call)  Jan-12/50.00  1,891,902  881,674 

Marvell Technology Group, Ltd. (Call)  Aug-11/17.00  3,728,058  568,529 

CBOE Volatility Index (Call)  Aug-11/32.50  3,524,551  2,296,284 

OfficeMax, Inc. (Call)  Aug-11/14.00  721,001  4,575 

OfficeMax, Inc. (Call)  Aug-11/13.00  829,152  24,875 

Oil Services HOLDRS Trust (Call)  Aug-11/150.00  254,003  2,595,707 

Powershares QQQ Trust (Call)  Aug-11/60.00  3,699,802  1,562,056 

Powershares QQQ Trust (Call)  Aug-11/63.00  4,267,818  147,837 

Powershares QQQ US Trust, Series 1 (Call)  Aug-11/65.00  24,877  2,488 

Qualcomm, Inc. (Call)  Jan-12/60.00  2,089,282  4,657,051 

State Street Corp. (Call)  Jan-12/50.00  3,632,984  2,884,589 

Wells Fargo & Co. (Call)  Dec-11/31.00  1,896,105  1,832,813 

Wells Fargo & Co. (Call)  Dec-11/31.00  2,096,959  2,026,963 

Wells Fargo & Co. (Call)  Jan-12/35.00  3,772,793  1,057,438 

Total purchased options outstanding (cost $75,751,858)    $55,544,807 
 
 
INVESTMENT COMPANIES (0.7%)*    Shares  Value 

Semiconductor HOLDRs Trust †    368,000  $11,809,120 

SPDR S&P Homebuilders ETF S    1,174,100  19,701,398 

Total investment companies (cost $31,213,913)      $31,510,518 
 
 
U.S. TREASURY OBLIGATIONS (0.2%)*    Principal amount  Value 

U.S. Treasury Bonds 5 1/4s, November 15, 2028 i    $211,000  $254,430 

U.S. Treasury Inflation Protected Securities       
1 3/8s July 15, 2018 i    205,259  229,467 
1 1/4s July 15, 2020 i    2,904,577  3,186,961 
1/2s April 15, 2015 i    1,905,928  2,022,551 
1/8s April 15, 2016 i    452,206  472,736 

U.S. Treasury Notes       
3 5/8s February 15, 2021 i    162,000  176,314 
2 3/4s February 15, 2019 i    426,000  446,985 
1 1/2s December 31, 2013 i    413,000  424,279 
1 7/8s June 15, 2012 i    3,755,000  3,816,146 
7/8s February 29, 2012 i    710,000  715,191 

Total U.S. treasury obligations (cost $11,745,060)      $11,745,060 
 
 
CONVERTIBLE PREFERRED STOCKS (0.2%)*    Shares  Value 

Unisys Corp. Ser. A, 6.25% cv. pfd.    127,113  $8,611,906 

Total convertible preferred stocks (cost $10,575,838)      $8,611,906 
 
 
MORTGAGE-BACKED SECURITIES (0.1%)*    Principal amount  Value 

Federal Home Loan Mortgage Corporation, Ser. 3569,       
3 3/4s, 2038 i    $3,035,966  $3,186,581 

Total mortgage-backed securities (cost $3,186,581)      $3,186,581 

 

29



SHORT-TERM INVESTMENTS (8.7%)*  Principal amount/shares  Value 

U. S. Treasury Bills for effective yields from 0.08%     
to 0.11%, February 9, 2012 ##  $3,031,000  $3,026,311 

U. S. Treasury Bills zero %, August 11, 2011 i  141,000  141,000 

Putnam Cash Collateral Pool, LLC 0.17% d  335,853,713  335,853,713 

Putnam Money Market Liquidity Fund 0.05% e  54,392,501  54,392,501 

SSgA Prime Money Market Fund 0.07% i P  16,571,000  16,571,000 

Total short-term investments (cost $409,987,743)    $409,984,525 

 
TOTAL INVESTMENTS     

Total investments (cost $5,150,922,186)    $5,005,711,761 

 

Key to holding’s abbreviations 
 
ADR  American Depository Receipts 
ADS  American Depository Shares 
CVR  Contingent Value Rights 
ETF  Exchange Traded Fund 
GDR  Global Depository Receipts 
SPDR  S&P Depository Receipts 

 

Notes to the fund’s portfolio

Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from August 1, 2010 through July 31, 2011 (the reporting period).

* Percentages indicated are based on net assets of $4,719,194,497.

† Non-income-producing security.

§ Affiliated Company (Note 7).

## This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivatives contracts at the close of the reporting period.

d See Note 1 to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

e See Note 6 to the financial statements regarding investments in Putnam Money Market Liquidity Fund. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

F Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) based on the securities’ valuation inputs. At the close of the reporting period, fair value pricing was also used for certain foreign securities in the portfolio (Note 1).

i Security purchased with cash or security received, that was pledged to the fund for collateral on certain derivatives contracts (Note 1).

P The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

R Real Estate Investment Trust.

S Security on loan, in part or in entirety, at the close of the reporting period.

W Warrants issued to the U.S. Treasury under the Troubled Asset Relief Program (TARP).

At the close of the reporting period, the fund maintained liquid assets totaling $11,834,280 to cover certain derivatives contracts.

144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

ADR, ADS or GDR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank.

30



FORWARD CURRENCY CONTRACTS at 7/31/11 (aggregate face value $280,096,752)   
 
          Unrealized 
  Contract  Delivery    Aggregate  appreciation/ 
Counterparty  Currency  type  date  Value  face value  (depreciation) 

Barclays Bank PLC           

Danish Krone   Sell  8/17/11  $11,638,257  $11,730,513  $92,256 

Credit Suisse AG           

Euro   Sell  8/17/11  101,969,949  100,882,974  (1,086,975) 

Japanese Yen   Sell  8/17/11  24,330,302  23,190,964  (1,139,338) 

UBS AG           

Brazilian Real   Sell  8/17/11  281,084  277,029  (4,055) 

British Pound   Sell  8/17/11  130,768,233  127,120,746  (3,647,487) 

Canadian Dollar   Sell  8/17/11  17,456,614  16,894,526  (562,088) 

Total          $(6,347,687) 
   

 

WRITTEN OPTIONS OUTSTANDING at 7/31/11 (premiums received $26,856,824)     
 
  Contract  Expiration date/   
  amount  strike price  Value 

Baidu, Inc. (Put)  153,638  Aug-11/$152.00  $660,688 

Best Buy Co., Inc. (Call)  5,063,794  Jan-12/37.50  1,079,216 

Best Buy Co., Inc. (Call)  430,378  Jan-12/37.50  92,857 

Cisco Systems, Inc. (Call)  6,855,339  Dec-11/21.00  1,073,957 

Cisco Systems, Inc. (Call)  3,238,110  Sep-11/18.00  747,550 

Cisco Systems, Inc. (Call)  4,147,838  Sep-11/20.00  253,143 

CurrencyShares Euro Trust (Put)  909,795  Aug-11/135.65  212,428 

First Solar, Inc. (Call)  1,102,878  Aug-11/140.00  1,092,290 

First Solar, Inc. (Call)  711,858  Aug-11/140.00  735,499 

General Electric Co. (Call)  2,073,578  Dec-11/22.00  288,787 

Goldman Sachs Group, Inc. (The) (Call)  1,523,724  Jan-12/160.00  3,549,974 

Hewlett-Packard Co. (Call)  2,011,580  Dec-11/40.00  1,815,049 

Hewlett-Packard Co. (Call)  1,294,100  Dec-11/44.00  451,796 

Hewlett-Packard Co. (Call)  1,676,326  Aug-11/52.50  218 

Hewlett-Packard Co. (Call)  526,046  Aug-11/52.50  68 

JPMorgan Chase & Co. (Call)  4,124,888  Dec-11/48.00  2,370,767 

Oil Services HOLDRS Trust (Call)  254,003  Aug-11/160.00  1,002,093 

Qualcomm, Inc. (Call)  2,089,282  Jan-12/65.00  2,299,631 

State Street Corp. (Call)  3,632,984  Jan-12/55.00  1,064,828 

Wells Fargo & Co. (Call)  2,096,959  Dec-11/33.00  1,034,556 

Wells Fargo & Co. (Call)  1,896,105  Dec-11/33.00  935,462 

Total      $20,760,857 

 

31



TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/11     
      Fixed payments  Total return   
Swap counterparty /  Termination  received (paid) by  received by  Unrealized 
Notional amount  date  fund per annum  or paid by fund  depreciation 

Merrill Lynch International         
baskets  120,892  7/27/12  (12 month USD-  A basket  $(488,059) 
      LIBOR-BBA)  (MLTRSLR)   
        of common stocks   

baskets  491,397  7/27/12  (12 month USD-  A basket  (2,167,421) 
      LIBOR-BBA)  (MLTROFC)   
        of common stocks   

baskets  634,443  10/28/11  (3 month USD-  A basket   
      LIBOR-BBA)  (MLTRSEMI)   
        of common stocks   

Morgan Stanley Capital Services, Inc.         
baskets  433,202 F  10/28/11  (3 month USD-  A basket  (767,374) 
      LIBOR-BBA)  (MSPUTAUT)   
        of common stocks   

Total          $(3,422,854) 

 

F Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (“ASC 820”) based on the securities’ valuation inputs.

ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 — Valuations based on quoted prices for identical securities in active markets.

Level 2 — Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 — Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:

    Valuation inputs   

Investments in securities:  Level 1  Level 2  Level 3 

Common stocks:       

Consumer discretionary  $524,081,042  $50,765,830  $— 

Consumer staples  65,362,226     

Energy  428,144,102  33,641,709   

Financials  447,764,929    3,424,402 

Health care  361,480,584  1,019,660   

Industrials  657,233,033     

Information technology  1,443,049,900  11,908,067  2,189,490 

Materials  226,265,561  94,450,068   

Telecommunication services  7,749,684     

Utilities  5,348,795     

Total common stocks  4,166,479,856  191,785,334  5,613,892 

 

32



    Valuation inputs   

Investments in securities:  Level 1  Level 2  Level 3 

Convertible preferred stocks  $—  $8,611,906  $— 

Investment Companies  31,510,518     

Mortgage-backed securities    3,186,581   

Purchased options outstanding    55,544,807   

U.S. Treasury Obligations    11,745,060   

Warrants  121,249,282     

Short-term investments  70,963,501  339,021,024   

Totals by level  $4,390,203,157  $609,894,712  $5,613,892 
 
    Valuation inputs   

Other financial instruments:  Level 1  Level 2  Level 3 

Forward currency contracts  $—  $(6,347,687)  $— 

Written options    (20,760,857)   

Total return swap contracts    (3,422,854)   

Totals by level  $—  $(30,531,398)  $— 

 

At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund’s portfolio.

The accompanying notes are an integral part of these financial statements.

33



Statement of assets and liabilities 7/31/11   
ASSETS   

Investment in securities, at value, including $301,977,804 of securities on loan (Note 1):   
Unaffiliated issuers (identified cost $4,672,892,468)  $4,556,747,594 
Affiliated issuers (identified cost $478,029,718) (Notes 1, 6 and 7)  448,964,167 

Foreign currency (cost $45,084) (Note 1)  43,694 

Dividends, interest and other receivables  8,082,705 

Cash collateral for certain derivative contracts (Note 1)  3,450,000 

Receivable for shares of the fund sold  7,747,856 

Receivable for investments sold  310,264,365 

Unrealized appreciation on forward currency contracts (Note 1)  92,256 

Total assets  5,335,392,637 
 
LIABILITIES   

Payable to custodian  20,767,175 

Payable for investments purchased  174,778,895 

Payable for shares of the fund repurchased  16,626,493 

Payable for compensation of Manager (Note 2)  1,909,517 

Payable for investor servicing fees (Note 2)  815,921 

Payable for custodian fees (Note 2)  114,647 

Payable for Trustee compensation and expenses (Note 2)  1,157,083 

Payable for administrative services (Note 2)  25,798 

Payable for distribution fees (Note 2)  1,199,752 

Unrealized depreciation on forward currency contracts (Note 1)  6,439,943 

Written options outstanding, at value (premiums received $26,856,824) (Notes 1 and 3)  20,760,857 

Unrealized depreciation on swap contracts (Note 1)  3,422,854 

Collateral on securities loaned, at value (Note 1)  335,853,713 

Collateral on certain derivative contracts, at value (Note 1)  31,643,641 

Other accrued expenses  681,851 

Total liabilities  616,198,140 
 
Net assets  $4,719,194,497 

 
REPRESENTED BY   

Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)  $5,176,879,250 

Undistributed net investment income (Note 1)  7,414,719 

Accumulated net realized loss on investments and foreign currency transactions (Note 1)  (316,236,041) 

Net unrealized depreciation of investments and assets and liabilities in foreign currencies  (148,863,431) 

Total — Representing net assets applicable to capital shares outstanding  $4,719,194,497 
 
(Continued on next page)   

 

34



Statement of assets and liabilities (Continued)   
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE   

Net asset value and redemption price per class A share   
($3,692,511,542 divided by 161,972,592 shares)  $22.80 

Offering price per class A share (100/94.25 of $22.80)*  $24.19 

Net asset value and offering price per class B share ($157,197,391 divided by 8,148,385 shares)**  $19.29 

Net asset value and offering price per class C share ($247,711,553 divided by 11,710,080 shares)**  $21.15 

Net asset value and redemption price per class M share ($29,617,941 divided by 1,408,170 shares)  $21.03 

Offering price per class M share (100/96.50 of $21.03)*  $21.79 

Net asset value, offering price and redemption price per class R share   
($22,350,816 divided by 997,797 shares)  $22.40 

Net asset value, offering price and redemption price per class Y share   
($569,805,254 divided by 23,972,568 shares)  $23.77 

 

* On single retail sales of less than $50,000. On sales of $50,000 or more 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.

35



Statement of operations Year ended 7/31/11   
 
INVESTMENT INCOME   

Dividends (net of foreign tax of $764,099)  $50,171,323 

Interest (including interest income of $96,793 from investments in affiliated issuers) (Note 6)  1,149,284 

Securities lending (Note 1)  3,342,962 

Total investment income  54,663,569 
 
EXPENSES   

Compensation of Manager (Note 2)  25,356,675 

Investor servicing fees (Note 2)  14,735,274 

Custodian fees (Note 2)  185,125 

Trustee compensation and expenses (Note 2)  379,660 

Administrative services (Note 2)  137,230 

Distribution fees — Class A (Note 2)  9,237,177 

Distribution fees — Class B (Note 2)  1,812,123 

Distribution fees — Class C (Note 2)  1,793,349 

Distribution fees — Class M (Note 2)  236,831 

Distribution fees — Class R (Note 2)  65,611 

Other  1,457,661 

Total expenses  55,396,716 
 
Expense reduction (Note 2)  (1,108,850) 

Net expenses  54,287,866 
 
Net investment income  375,703 

 
Net realized gain on investments (including realized gain of $17,615,724   
on affiliated issuers) (Notes 1, 3 and 7)  541,416,229 

Net realized gain on swap contracts (Note 1)  6,466,875 

Net realized loss on foreign currency transactions (Note 1)  (16,730,230) 

Net realized gain on written options (Notes 1 and 3)  74,527,205 

Net unrealized depreciation of assets and liabilities in foreign currencies during the year  (4,878,882) 

Net unrealized depreciation of investments, swap contracts, and written options   
during the year  (137,708,385) 

Net gain on investments  463,092,812 
 
Net increase in net assets resulting from operations  $463,468,515 

 

The accompanying notes are an integral part of these financial statements.

36



Statement of changes in net assets     
 
INCREASE IN NET ASSETS  Year ended 7/31/11  Year ended 7/31/10 

Operations:     
Net investment income (loss)  $375,703  $(2,614,860) 

Net realized gain on investments     
and foreign currency transactions  605,680,079  968,585,018 

Net unrealized depreciation of investments and assets     
and liabilities in foreign currencies  (142,587,267)  (337,724,559) 

Net increase in net assets resulting from operations  463,468,515  628,245,599 

Distributions to shareholders (Note 1):     
From ordinary income     
Net investment income     

Class A  (13,010,996)  (29,854,006) 

Class B    (1,013,327) 

Class C    (328,745) 

Class M    (183,395) 

Class R  (24,298)  (23,854) 

Class Y  (2,169,495)  (2,000,365) 

Increase in capital from settlement payments (Note 8)  2,414,693  8,472 

Redemption fees (Note 1)  523  13,392 

Increase from capital share transactions (Note 4)  539,692,262  12,864,933 

Total increase in net assets  990,371,204  607,728,704 
 
NET ASSETS     

Beginning of year  3,728,823,293  3,121,094,589 

End of year (including undistributed net investment     
income of $7,414,719 and $12,852,238, respectively)  $4,719,194,497  $3,728,823,293 

 

The accompanying notes are an integral part of these financial statements.

37



Financial highlights (For a common share outstanding throughout the period)

INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: RATIOS AND SUPPLEMENTAL DATA:   

                        Ratio  Ratio   
      Net realized                  of expenses  of net investment   
  Net asset value,    and unrealized  Total from  From          Total return  Net assets,  to average  income (loss)  Portfolio 
  beginning Net investment  gain (loss)  investment  net investment  Total  Redemption  Non-recurring    Net asset value, at net asset  end of period  net assets  to average  turnover 
Period ended  of period   income (loss) a  on investments  operations  income  distributions   fees e  reimbursements    end of period  value (%) b  (in thousands)  (%) c  net assets (%)  (%) 

Class A                             
July 31, 2011  $20.12  .01  2.74  2.75  (.08)  (.08)    .01 g  $22.80  13.73  $3,692,512  1.17  .05  176 
July 31, 2010  16.85  e  3.46  3.46  (.19)  (.19)    e,f  20.12  20.58  3,111,020  1.26  (.03)  177 
July 31, 2009  16.93  .08  (.16) h  (.08)        e,i  16.85  (.47) h  2,715,001  1.26 d  .61 d  187 
July 31, 2008  18.54  (.01)  (1.60)  (1.61)          16.93  (8.68)  3,213,102  1.20 d  (.08) d  68 
July 31, 2007  16.20  (.06)  2.40  2.34          18.54  14.44  4,790,506  1.14 d  (.33) d  65 

Class B                             
July 31, 2011  $17.09  (.14)  2.33  2.19        .01 g  $19.29  12.87  $157,197  1.92  (.70)  176 
July 31, 2010  14.35  (.13)  2.94  2.81  (.07)  (.07)    e,f  17.09  19.64  182,569  2.01  (.77)  177 
July 31, 2009  14.52  (.02)  (.15) h  (.17)        e,i  14.35  (1.17) h  217,981  2.01 d  (.13) d  187 
July 31, 2008  16.03  (.13)  (1.38)  (1.51)          14.52  (9.42)  368,079  1.95 d  (.84) d  68 
July 31, 2007  14.12  (.17)  2.08  1.91          16.03  13.53  726,751  1.89 d  (1.08) d  65 

Class C                             
July 31, 2011  $18.74  (.15)  2.55  2.40        .01 g  $21.15  12.86  $247,712  1.92  (.71)  176 
July 31, 2010  15.76  (.15)  3.24  3.09  (.11)  (.11)    e,f  18.74  19.63  87,221  2.01  (.79)  177 
July 31, 2009  15.95  (.02)  (.17) h  (.19)        e,i  15.76  (1.19) h  37,356  2.01 d  (.14) d  187 
July 31, 2008  17.60  (.14)  (1.51)  (1.65)          15.95  (9.38)  45,990  1.95 d  (.82) d  68 
July 31, 2007  15.50  (.19)  2.29  2.10          17.60  13.55  59,248  1.89 d  (1.08) d  65 

Class M                             
July 31, 2011  $18.59  (.10)  2.53  2.43        .01 g  $21.03  13.13  $29,618  1.67  (.45)  176 
July 31, 2010  15.60  (.10)  3.21  3.11  (.12)  (.12)    e,f  18.59  19.94  28,857  1.76  (.53)  177 
July 31, 2009  15.74  .01  (.15) h  (.14)        e,i  15.60  (.89) h  25,635  1.76 d  .11 d  187 
July 31, 2008  17.34  (.10)  (1.50)  (1.60)          15.74  (9.23)  32,089  1.70 d  (.58) d  68 
July 31, 2007  15.22  (.14)  2.26  2.12          17.34  13.93  47,801  1.64 d  (.83) d  65 

Class R                             
July 31, 2011  $19.80  (.05)  2.71  2.66  (.07)  (.07)    .01 g  $22.40  13.46  $22,351  1.42  (.20)  176 
July 31, 2010  16.61  (.06)  3.41  3.35  (.16)  (.16)    e,f  19.80  20.23  5,573  1.51  (.29)  177 
July 31, 2009  16.72  .05  (.16) h  (.11)        e,i  16.61  (.66) h  2,156  1.51 d  .35 d  187 
July 31, 2008  18.37  (.05)  (1.60)  (1.65)          16.72  (8.98)  2,363  1.45 d  (.30) d  68 
July 31, 2007  16.09  (.10)  2.38  2.28          18.37  14.17  2,243  1.39 d  (.58) d  65 

Class Y                             
July 31, 2011  $20.97  .07  2.86  2.93  (.14)  (.14)    .01 g  $23.77  13.99  $569,805  .92  .29  176 
July 31, 2010  17.54  .04  3.62  3.66  (.23)  (.23)    e,f  20.97  20.91  313,583  1.01  .21  177 
July 31, 2009  17.58  .14  (.18) h  (.04)        e,i  17.54  (.23) h  122,966  1.01 d  .96 d  187 
July 31, 2008  19.21  .03  (1.66)  (1.63)          17.58  (8.49)  935,875  .95 d  .18 d  68 
July 31, 2007  16.74  (.02)  2.49  2.47          19.21  14.76  1,297,987  .89 d  (.08) d  65 

 

See notes to financial highlights at the end of this section.

The accompanying notes are an integral part of these financial statements.

38  39 

 



Financial highlights (Continued)

a Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

b Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

c Includes amounts paid through expense offset and/or brokerage/service arrangements (Note 2).

d Reflects an involuntary contractual expense limitation and/or waivers of certain fund expenses in connection with investments in Putnam Prime Money Market Fund in effect during the period. As a result of such limitation and/or waivers, the expenses of each class reflect a reduction of the following amounts:

  Percentage of 
  average net assets 

July 31, 2009  0.03% 

July 31, 2008  <0.01 

July 31, 2007  <0.01 

 

e Amount represents less than $0.01 per share.

f Reflects a non-recurring reimbursement pursuant to a settlement between the Securities and Exchange Commission (SEC) and Prudential Securities, Inc., which amounted to less than $0.01 per share outstanding as of March 30, 2010.

g Reflects a non-recurring reimbursal related to restitution amounts in connection with a distribution plan approved by the SEC which amounted to $0.01 per share outstanding on July 21, 2011. Also reflects a non-recurring reimbursal related to short-term trading related lawsuits, which amounted to less than $0.01 per share outstanding on May 11, 2011. (Note 8)

h Reflects a non-recurring litigation payment from Enron Corporation which amounted to the following amounts per share outstanding as of December 29, 2008:

  Per share 

Class A  $0.11 

Class B  0.10 

Class C  0.11 

Class M  0.10 

Class R  0.11 

Class Y  0.12 

 

This payment resulted in an increase to total returns of 0.71% for the year ended July 31, 2009.

i Reflects a non-recurring reimbursement pursuant to a settlement between the SEC and Millennium Partners, L.P., Millennium Management, L.L.C., and Millennium International Management, L.L.C., which amounted to less than $0.01 per share outstanding as of June 23, 2009.

The accompanying notes are an integral part of these financial statements.

40



Notes to financial statements 7/31/11

Note 1: Significant accounting policies

Putnam Voyager Fund (the fund) is a Massachusetts business trust, which 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 in common stocks of U.S. companies, with a focus on growth stocks.

The fund offers class A, class B, class C, class M, class R and class Y shares. Class A and class M shares are sold with a maximum front-end sales charge of 5.75% and 3.50%, respectively, and generally do not pay a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class R shares, which are not available to all investors, are sold at net asset value. The expenses for class A, class B, class C, class M and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee. Class Y shares are not available to all investors.

Prior to August 2, 2010, a 1.00% redemption fee applied to certain shares that were redeemed (either by selling or exchanging into another fund) within 7 days of purchase. The redemption fee was accounted for as an addition to paid-in-capital. Effective August 2, 2010, this redemption fee no longer applies to shares redeemed.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). 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. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.

The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. Unless otherwise noted, the “reporting period” represents the period from August 1, 2010 through July 31, 2011.

A) Security valuation Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities. If no sales are reported — as in the case of some securities traded over-the-counter — a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Market quotations are not considered to be readily available for certain debt obligations and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Investment Management, LLC (Putnam Management), the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which considers such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.

Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days,

41



the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

Such valuations and procedures are reviewed periodically by the Trustees. Certain securities may be valued on the basis of a price provided by a single source. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

B) Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

Interest income is recorded on the accrual basis. Dividend income, net of applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

All premiums/discounts are amortized/accreted on a yield-to-maturity basis.

C) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities is 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 earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments. The fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

D) Options contracts The fund uses options contracts to hedge against changes in values of securities it owns, owned or expects to own. The potential risk to the fund is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange

42



rates move unexpectedly or if the counterparty to the contract is unable to perform. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. Written option contracts outstanding at period end, if any, are listed after the fund’s portfolio. See Note 3 for the volume of written options contracts activity for the reporting period. The fund had an average contract amount of approximately 201,000,000 purchased options contracts for the reporting period.

E) Forward currency contracts The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities. Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio. Outstanding forward currency contracts at the close of the reporting period are indicative of the volume of activity during the reporting period.

F) Total return swap contracts The fund entered into total return swap contracts, which are arrangements to exchange a market linked return for a periodic payment, both based on a notional principal amount, to gain exposure to specific sectors/industries. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Risk of loss may exceed amounts recognized on the Statement of assets and liabilities. Total return swap contracts outstanding at period end, if any, are listed after the fund’s portfolio. The fund had an average notional amount of approximately $91,700,000 on total return swap contracts for the reporting period.

G) Master agreements The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over-the-counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio. Collateral posted to the fund which cannot be sold or repledged totaled $3,311,356 at the close of the reporting period. Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.

43



At the close of the reporting period, the fund had a net liability position of $7,759,397 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $6,079,158, which includes $3,450,000 of segregated cash.

H) Securities lending The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending is included in investment income on the Statement of operations. Effective August 2010, cash collateral is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged by Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the value of securities loaned amounted to $327,425,258. Certain of these securities were sold prior to the close of the reporting period and are included in Receivable for investments sold on the Statement of assets and liabilities. The fund received cash collateral of $335,853,713.

I) Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the Securities and Exchange Commission (the SEC). This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

J) Line of credit The fund participates, along with other Putnam funds, in a $325 million unsecured committed line of credit and a $185 million unsecured uncommitted line of credit, both provided by State Street Bank and Trust Company (State Street). Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to the Federal Funds rate plus 1.25% for the committed line of credit and the Federal Funds rate plus 1.30% for the uncommitted line of credit. A closing fee equal to 0.02% of the committed line of credit and $50,000 for the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.13% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

K) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the 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 Code. The fund is subject to the provisions of Accounting Standards Codification ASC 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

At July 31, 2011, the fund had a capital loss carryover of $299,180,448 available to the extent allowed by the Code to offset future net capital gain, if any. This capital loss carryover will expire on July 31, 2017. Under the recently enacted Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

L) Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences

44



include temporary and/or permanent differences from losses on wash sale transactions, foreign currency gains and losses, the expiration of a capital loss carryover, unrealized gains and losses on certain futures contracts, net operating loss, income on swap contracts and restitution payments. 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 reporting period ended, the fund reclassified $9,391,567 to decrease distributions in excess of net investment income and $1,389,749,437 to decrease paid-in-capital, with a decrease to accumulated net realized loss of $1,380,357,870.

The tax basis components of distributable earnings as of the close of the reporting period were as follows:

Unrealized appreciation  $318,939,713 
Unrealized depreciation  (478,803,310) 

Net unrealized depreciation  (159,863,597) 
Capital loss carryforward  (299,180,448) 
Cost for federal income tax purposes  $5,165,575,358 

 

Note 2: Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of most open-end funds, as defined in the fund’s management contract, sponsored by Putnam Management. Such annual rates may vary as follows:

0.710%  of the first $5 billion, 
0.660%  of the next $5 billion, 
0.610%  of the next $10 billion, 
0.560%  of the next $10 billion, 
0.510%  of the next $50 billion, 
0.490%  of the next $50 billion, 
0.480%  of the next $100 billion, 
0.475%  of any excess thereafter. 

 

In addition, beginning with the fund’s thirteenth complete calendar month of operation under the management contract (January 2011), the monthly management fee consists of the monthly base fee plus or minus a performance adjustment for the month. The performance adjustment is determined based on performance over the thirty-six month period then ended or, if the management contract has not yet been effective for thirty-six complete calendar months, the period from the date the management contract became effective to the end of the month for which the fee adjustment is being computed. Each month, the performance adjustment is calculated by multiplying the performance adjustment rate and the fund’s average net assets over the performance period and the result is divided by twelve. The resulting dollar amount is added to, or subtracted from the base fee for that month. The performance adjustment rate is equal to 0.03 multiplied by the difference between the fund’s annualized performance (measured by the fund’s class A shares) and the annualized performance of the Russell 1000 Growth Index, each measured over the performance period. The maximum annualized performance adjustment rates are +/– 0.12%. The monthly base fee is determined based on the fund’s average net assets for the month, while the performance adjustment is determined based on the fund’s average net assets over the performance period of up to thirty-six months. This means it is possible that, if the fund underperforms significantly over the performance period, and the fund’s assets have declined significantly over that period, the negative performance adjustment may exceed the base fee. In this event, Putnam Management would make a payment to the fund.

For the reporting period, the base fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.56% of the fund’s average net assets before a decrease of $379,233 (0.01% of the fund’s average net assets) based on performance.

Putnam Management has contractually agreed, through June 30, 2012, to waive fees or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were not reduced as a result of this limit.

45



Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. Putnam Management pays a quarterly sub-management fee to PIL for its services at an annual rate of 0.35% of the average net assets of the portion of the fund managed by PIL.

The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.

Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing based on the fund’s retail asset level, the number of shareholder accounts in the fund and the level of defined contribution plan assets in the fund. Investor servicing fees will not exceed an annual rate of 0.375% of the fund’s average net assets. The amounts incurred for investor servicing agent functions during the reporting period are included in Investor servicing fees in the Statement of operations.

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. The fund also reduced expenses through brokerage/service arrangements. For the reporting period, the fund’s expenses were reduced by $14,396 under the expense offset arrangements and by $1,094,454 under the brokerage/service arrangements.

Each independent Trustee of the fund receives an annual Trustee fee, of which $3,373, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the Plans) with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b–1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, a wholly-owned subsidiary of Putnam Investments, LLC and Putnam Retail Management GP, Inc., for services provided and expenses incurred in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and 0.50% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively.

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $765,356 and $2,974 from the sale of class A and class M shares, respectively, and received $142,575 and $22,782 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% and 0.65% is assessed on certain redemptions of class A and class M shares, respectively. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received $3,288 and no monies on class A and class M redemptions, respectively.

46



Note 3: Purchases and sales of securities

During the reporting period, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $8,282,493,813 and $7,848,742,467, respectively. There were no purchases or proceeds from sales of long-term U.S. government securities.

Written option transactions during the reporting period are summarized as follows:

    Contract amounts  Premiums received 

Written options outstanding       
at beginning of the reporting period  USD  56,843,796  $69,818,559 

Options  USD  317,095,540  109,792,239 
opened  JPY  23,507,653  1,379,485 
  EUR  237,430  32,708 

Options       
exercised       

Options  USD  (162,385,070)  (46,890,960) 
expired  JPY  (23,507,653)  (1,379,485) 

Options  USD  (165,741,063)  (105,863,014) 
closed  EUR  (237,430)  (32,708) 

Written options outstanding       
at end of the reporting period  USD  45,813,203  $26,856,824 

 

Note 4: Capital shares

At the close of the reporting period, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:

   Year ended 7/31/11   Year ended 7/31/10 

Class A  Shares  Amount  Shares  Amount 

Shares sold  35,779,506  $845,170,348  20,917,576  $414,621,152 

Shares issued in connection with         
reinvestment of distributions  512,046  11,910,291  1,485,196  28,322,682 

   36,291,552  857,080,639  22,402,772  442,943,834 

Shares repurchased  (28,955,588)  (670,384,681)  (28,871,725)  (564,527,763) 

Net increase (decrease)  7,335,964  $186,695,958  (6,468,953)  $(121,583,929) 

 
   Year ended 7/31/11   Year ended 7/31/10 

Class B  Shares  Amount  Shares  Amount 

Shares sold  1,482,586  $29,558,275  1,218,106  $20,382,301 

Shares issued in connection with         
reinvestment of distributions      60,422  983,669 

   1,482,586  29,558,275  1,278,528  21,365,970 

Shares repurchased  (4,016,253)  (78,710,519)  (5,787,196)  (96,975,052) 

Net decrease  (2,533,667)  $(49,152,244)  (4,508,668)  $(75,609,082) 

 
   Year ended 7/31/11   Year ended 7/31/10 

Class C  Shares  Amount  Shares  Amount 

Shares sold  8,371,205  $185,321,835  2,908,403  $53,745,988 

Shares issued in connection with         
reinvestment of distributions      14,172  252,964 

   8,371,205  185,321,835  2,922,575  53,998,952 

Shares repurchased  (1,315,125)  (28,458,694)  (638,989)  (11,647,956) 

Net increase  7,056,080  $156,863,141  2,283,586  $42,350,996 

 

47



   Year ended 7/31/11   Year ended 7/31/10 

Class M  Shares  Amount  Shares  Amount 

Shares sold  165,235  $3,543,656  180,748  $3,298,531 

Shares issued in connection with         
reinvestment of distributions      10,034  177,403 

   165,235  3,543,656  190,782  3,475,934 

Shares repurchased  (309,594)  (6,648,027)  (281,887)  (5,112,273) 

Net decrease  (144,359)  $(3,104,371)  (91,105)  $(1,636,339) 

 
   Year ended 7/31/11   Year ended 7/31/10 

Class R  Shares  Amount  Shares  Amount 

Shares sold  903,662  $21,130,597  222,112  $4,468,999 

Shares issued in connection with         
reinvestment of distributions  773  17,695  1,240  23,316 

   904,435  21,148,292  223,352  4,492,315 

Shares repurchased  (188,045)  (4,322,936)  (71,734)  (1,387,560) 

Net increase  716,390  $16,825,356  151,618  $3,104,755 

 
   Year ended 7/31/11   Year ended 7/31/10 

Class Y  Shares  Amount  Shares  Amount 

Shares sold  22,177,452  $548,159,838  10,795,507  $224,743,980 

Shares issued in connection with         
reinvestment of distributions  64,437  1,560,026  92,495  1,835,103 

   22,241,889  549,719,864  10,888,002  226,579,083 

Shares repurchased  (13,226,309)  (318,155,442)  (2,939,764)  (60,340,551) 

Net increase  9,015,580  $231,564,422  7,948,238  $166,238,532 

 

Note 5: Summary of derivative activity

The following is a summary of the market values of derivative instruments as of the close of the reporting period:

Market values of derivative instruments as of the close of the reporting period

   Asset derivatives   Liability derivatives  

Derivatives not         
accounted for as  Statement of    Statement of   
hedging instruments  assets and    assets and   
under ASC 815  liabilities location  Market value  liabilities location  Market value 

Foreign exchange         
contracts  Receivables  $92,256  Payables  $6,439,943 

Equity contracts  Investments, Receivables  176,794,089  Payables  24,183,711 

Total     $176,886,345     $30,623,654 

 

48



The following is a summary of realized and change in unrealized gains or losses of derivative instruments on the Statement of operations for the reporting period (see Note 1):

Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments

Derivatives not accounted      Forward     
for as hedging instruments      currency     
under ASC 815  Options  Warrants  contracts  Swaps  Total 

Foreign exchange           
contracts  $—  $—  $(15,176,231)  $—  $(15,176,231) 

Equity contracts  (53,693,244)  48,957    6,466,875  (47,177,412) 

Total  $(53,693,244)  $48,957  $(15,176,231)  $6,466,875  $(62,353,643) 

 

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss) on investments

Derivatives not accounted      Forward     
for as hedging instruments      currency     
under ASC 815  Options  Warrants  contracts  Swaps  Total 

Foreign exchange           
contracts  $—  $—  $(4,872,960)  $—  $(4,872,960) 

Equity contracts  2,670,178  (17,733,646)    (6,900,253)  (21,963,721) 

Total  $2,670,178  $(17,733,646)  $(4,872,960)  $(6,900,253)  $(26,836,681) 

 

† For the reporting period, the transaction volume for warrants was minimal.

Note 6: Investment in Putnam Money Market Liquidity Fund

The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income in the Statement of operations and totaled $96,793 for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $1,845,506,276 and $1,946,058,273, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

Note 7: Transactions with affiliated issuers

Transactions during the reporting period with companies in which the fund owned at least 5% of the voting securities were as follows:

  Purchase  Sales  Dividend  Market 
Affiliates  cost  proceeds  income  value 

Unisys Corp.  $62,986,732  $47,105,319  $—  $58,717,953 

Totals  $62,986,732  $47,105,319  $—  $58,717,953 

 

Market values are shown for those securities affiliated at the close of the reporting period.

Note 8: Regulatory matters and litigation

In late 2003 and 2004, Putnam Management settled charges brought by the SEC and the Massachusetts Securities Division in connection with excessive short-term trading in Putnam funds. In July 2011, the fund recorded a receivable of $2,358,440 related to restitution amounts in connection with a distribution plan approved by the SEC. This amount is reported in the Increase in capital from settlement payments line on the Statement of changes in net assets. These allegations and related matters have served as the general basis for certain lawsuits, including purported class action lawsuits against Putnam Management and, in a limited number of cases, some Putnam funds. In May 2011, the fund received a payment of $56,253 related to settlement of those lawsuits. This amount is reported in the Increase in capital from settlement payments line on the Statement of changes in net assets. Putnam Management has agreed to bear any costs incurred by the Putnam funds as a result of these matters.

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Note 9: Market and credit risk

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default.

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Federal tax information (Unaudited)

For the tax year ended July 31, 2011, pursuant to §871(k) of the Internal Revenue Code, the fund hereby designates $114,036 of distributions paid as qualifying to be taxed as interest-related dividends, and no amount to be taxed as short-term capital gain dividends for nonresident alien shareholders.

The Form 1099 that will be mailed to you in January 2012 will show the tax status of all distributions paid to your account in calendar 2011.

51



About the Trustees

Independent Trustees

Name     
Year of birth     
Position held  Principal occupations during past five years  Other directorships 

Ravi Akhoury  Advisor to New York Life Insurance Company. Trustee of  Jacob Ballas Capital 
Born 1947  American India Foundation and of the Rubin Museum.  India, a non-banking 
Trustee since 2009  From 1992 to 2007, was Chairman and CEO of MacKay  finance company 
  Shields, a multi-product investment management firm  focused on private 
  with over $40 billion in assets under management.  equity advisory services; 
    RAGE Frameworks, 
    Inc., a private software 
    company 

Barbara M. Baumann  President and Owner of Cross Creek Energy Corporation,  SM Energy Company, a 
Born 1955  a strategic consultant to domestic energy firms and direct  domestic exploration 
Trustee since 2010  investor in energy projects. Trustee of Mount Holyoke  and production 
  College and member of the Investment Committee for the  company; UniSource 
  college’s endowment. Former Chair and current board  Energy Corporation, 
  member of Girls Incorporated of Metro Denver. Member of  an Arizona utility; CVR 
  the Finance Committee, The Children’s Hospital of Denver.  Energy, a petroleum 
    refiner and fertilizer 
    manufacturer; Cody 
    Resources Management, 
    LLP, a privately held 
    energy, ranching, and 
    commercial real estate 
    company 

Jameson A. Baxter  President of Baxter Associates, Inc., a private investment  None 
Born 1943  firm. Chair of Mutual Fund Directors Forum. Chair Emeritus   
Trustee since 1994,  of the Board of Trustees of Mount Holyoke College.   
Vice Chair from 2005  Director of the Adirondack Land Trust and Trustee of the   
to 2011, and Chair  Nature Conservancy’s Adirondack Chapter.   
since 2011     

Charles B. Curtis  Former President and Chief Operating Officer of the  Edison International; 
Born 1940  Nuclear Threat Initiative, a private foundation dealing  Southern California 
Trustee since 2001  with national security issues. Senior Advisor to the Center  Edison 
for Strategic and International Studies. Member of the
  Council on Foreign Relations.   

Robert J. Darretta  Health Care Industry Advisor to Permira, a global private  UnitedHealth 
Born 1946  equity firm. Until April 2007, was Vice Chairman of the  Group, a diversified 
Trustee since 2007  Board of Directors of Johnson & Johnson. Served as  health-care company 
Johnson & Johnson’s Chief Financial Officer for a decade.

John A. Hill  Founder and Vice-Chairman of First Reserve  Devon Energy 
Born 1942  Corporation, the leading private equity buyout firm  Corporation, a leading 
Trustee since 1985 and  focused on the worldwide energy industry. Serves as a  independent natural gas 
Chairman from 2000  Trustee and Chairman of the Board of Trustees of Sarah  and oil exploration and 
to 2011  Lawrence College. Also a member of the Advisory Board  production company 
  of the Millstein Center for Corporate Governance and   
  Performance at the Yale School of Management.   

 

52



Name     
Year of birth     
Position held  Principal occupations during past five years  Other directorships 

Paul L. Joskow  Economist and President of the Alfred P. Sloan  TransCanada 
Born 1947  Foundation, a philanthropic institution focused primarily  Corporation, an energy 
Trustee since 1997  on research and education on issues related to science,  company focused on 
  technology, and economic performance. Elizabeth and  natural gas transmission 
  James Killian Professor of Economics, Emeritus at the  and power services; 
  Massachusetts Institute of Technology (MIT). Prior to  Exelon Corporation, an 
  2007, served as the Director of the Center for Energy and  energy company focused 
  Environmental Policy Research at MIT.  on power services 

Kenneth R. Leibler  Founder and former Chairman of Boston Options  Northeast Utilities, 
Born 1949  Exchange, an electronic marketplace for the trading  which operates New 
Trustee since 2006  of derivative securities. Vice Chairman of the Board of  England’s largest energy 
  Trustees of Beth Israel Deaconess Hospital in Boston,  delivery system 
Massachusetts. Until November 2010, director of Ruder
Finn Group, a global communications and advertising firm.

Robert E. Patterson  Senior Partner of Cabot Properties, LP and Co-Chairman  None 
Born 1945  of Cabot Properties, Inc., a private equity firm investing in   
Trustee since 1984  commercial real estate. Past Chairman and Trustee of the   
  Joslin Diabetes Center.   

George Putnam, III  Chairman of New Generation Research, Inc., a publisher  None 
Born 1951  of financial advisory and other research services, and   
Trustee since 1984  founder and President of New Generation Advisors, LLC,   
  a registered investment advisor to private funds.   
Director of The Boston Family Office, LLC, a registered
  investment advisor.   

W. Thomas Stephens  Retired as Chairman and Chief Executive Officer of Boise  TransCanadaPipelines 
Born 1942  Cascade, LLC, a paper, forest products, and timberland  Ltd., an energy 
Trustee from 1997 to 2008 assets company, in December 2008. Prior to 2010,  infrastructure company 
and since 2009 Director of Boise Inc., a manufacturer of paper and   
  packaging products.   

Interested Trustee     

Robert L. Reynolds*  President and Chief Executive Officer of Putnam  None 
Born 1952  Investments since 2008. Prior to joining Putnam   
Trustee since 2008 and  Investments, served as Vice Chairman and Chief   
President of the Putnam  Operating Officer of Fidelity Investments from   
Funds since July 2009  2000 to 2007.   

 

The address of each Trustee is One Post Office Square, Boston, MA 02109.

As of July 31, 2011, there were 106 Putnam funds. All Trustees serve as Trustees of all Putnam funds.

Each Trustee serves for an indefinite term, until his or her resignation, retirement at age 72, removal, or death.

* Mr. Reynolds is an “interested person” (as defined in the Investment Company Act of 1940) of the fund, Putnam Management, and/or Putnam Retail Management. He is President and Chief Executive Officer of Putnam Investments, as well as the President of your fund and each of the other Putnam funds.

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Officers

In addition to Robert L. Reynolds, the other officers of the fund are shown below:

Jonathan S. Horwitz (Born 1955)  Robert T. Burns (Born 1961) 
Executive Vice President, Principal Executive  Vice President and Chief Legal Officer 
Officer, Treasurer and Compliance Liaison  Since 2011 
Since 2004  General Counsel, Putnam Investments and 
  Putnam Management 
Steven D. Krichmar (Born 1958)   
Vice President and Principal Financial Officer  James P. Pappas (Born 1953) 
Since 2002  Vice President 
Chief of Operations, Putnam Investments and  Since 2004 
Putnam Management  Director of Trustee Relations, 
  Putnam Investments and Putnam Management 
Janet C. Smith (Born 1965)   
Vice President, Assistant Treasurer and  Judith Cohen (Born 1945) 
Principal Accounting Officer  Vice President, Clerk and Assistant Treasurer 
Since 2007  Since 1993 
Director of Fund Administration Services,   
Putnam Investments and Putnam Management  Michael Higgins (Born 1976) 
  Vice President, Senior Associate Treasurer and 
Beth S. Mazor (Born 1958)  Assistant Clerk 
Vice President  Since 2010 
Since 2002  Manager of Finance, Dunkin’ Brands (2008– 
Manager of Trustee Relations, Putnam  2010); Senior Financial Analyst, Old Mutual Asset 
Investments and Putnam Management  Management (2007–2008); Senior Financial 
  Analyst, Putnam Investments (1999–2007) 
Robert R. Leveille (Born 1969)   
Vice President and Chief Compliance Officer  Nancy E. Florek (Born 1957) 
Since 2007  Vice President, Assistant Clerk, Assistant 
Chief Compliance Officer, Putnam Investments,  Treasurer and Proxy Manager 
Putnam Management, and Putnam Retail  Since 2000 
Management   
  Susan G. Malloy (Born 1957) 
Mark C. Trenchard (Born 1962)  Vice President and Assistant Treasurer 
Vice President and BSA Compliance Officer  Since 2007 
Since 2002  Director of Accounting & Control Services, 
Director of Operational Compliance,  Putnam Management 
Putnam Investments and Putnam   
Retail Management   

 

The principal occupations of the officers for the past five years have been with the employers as shown above although in some cases, they have held different positions with such employers. The address of each Officer is One Post Office Square, Boston, MA 02109.

54



Services for shareholders

Investor services

Systematic investment plan Tell us how much you wish to invest regularly — weekly, semimonthly, or monthly — and the amount you choose will be transferred automatically from your checking or savings account. There’s no additional fee for this service, and you can suspend it at any time. This plan may be a great way to save for college expenses or to plan for your retirement.

Please note that regular investing does not guarantee a profit or protect against loss in a declining market. Before arranging a systematic investment plan, consider your financial ability to continue making purchases in periods when prices are low.

Systematic exchange You can make regular transfers from one Putnam fund to another Putnam fund. There are no additional fees for this service, and you can cancel or change your options at any time.

Dividends PLUS You can choose to have the dividend distributions from one of your Putnam funds automatically reinvested in another Putnam fund at no additional charge.

Free exchange privilege You can exchange money between Putnam funds free of charge, as long as they are the same class of shares. A signature guarantee is required if you are exchanging more than $500,000. The fund reserves the right to revise or terminate the exchange privilege.

Reinstatement privilege If you’ve sold Putnam shares or received a check for a dividend or capital gain, you may reinvest the proceeds with Putnam within 90 days of the transaction and they will be reinvested at the fund’s current net asset value — with no sales charge. However, reinstatement of class B shares may have special tax consequences. Ask your financial or tax representative for details.

Check-writing service You have ready access to many Putnam accounts. It’s as simple as writing a check, and there are no special fees or service charges. For more information about the check-writing service, call Putnam or visit our website.

Dollar cost averaging When you’re investing for long-term goals, it’s time, not timing, that counts. Investing on a systematic basis is a better strategy than trying to figure out when the markets will go up or down. This means investing the same amount of money regularly over a long period. This method of investing is called dollar cost averaging. When a fund’s share price declines, your investment dollars buy more shares at lower prices. When it increases, they buy fewer shares. Over time, you will pay a lower average price per share.

For more information

Visit the Individual Investors section at putnam.com A secure section of our website contains complete information on your account, including balances and transactions, updated daily. You may also conduct transactions, such as exchanges, additional investments, and address changes. Log on today to get your password.

Call us toll free at 1-800-225-1581 Ask a helpful Putnam representative or your financial advisor for details about any of these or other services, or see your prospectus.

55



The Putnam family of funds

The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, call your financial advisor at 1-800-225-1581 and ask for a prospectus. Please read the prospectus carefully before investing.

Growth  Value 
Growth Opportunities Fund  Convertible Securities Fund 
International Growth Fund  Prior to September 30, 2010, the fund was known as 
Multi-Cap Growth Fund  Putnam Convertible Income-Growth Trust 
Prior to September 1, 2010, the fund was known as  Equity Income Fund 
Putnam New Opportunities Fund  George Putnam Balanced Fund 
Small Cap Growth Fund  Prior to September 30, 2010, the fund was known as 
Voyager Fund  The George Putnam Fund of Boston 
  The Putnam Fund for Growth and Income 
Blend  International Value Fund 
Asia Pacific Equity Fund  Multi-Cap Value Fund 
Capital Opportunities Fund  Prior to September 1, 2010, the fund was known as 
Capital Spectrum Fund  Putnam Mid Cap Value Fund 
Emerging Markets Equity Fund  Small Cap Value Fund 
Equity Spectrum Fund  
Europe Equity Fund  Income 
Global Equity Fund  American Government Income Fund 
International Capital Opportunities Fund  Diversified Income Trust 
International Equity Fund  Floating Rate Income Fund 
Investors Fund  Global Income Trust 
Multi-Cap Core Fund  High Yield Advantage Fund 
Research Fund  High Yield Trust 
Income Fund 
  Money Market Fund* 
  U.S. Government Income Trust 

 

* An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

56



Tax-free income  Asset Allocation 
AMT-Free Municipal Fund  Putnam Asset Allocation Funds — portfolios 
Tax Exempt Income Fund  with allocations to stocks, bonds, and 
Tax Exempt Money Market Fund*  money market instruments that are adjusted 
Tax-Free High Yield Fund  dynamically within specified ranges as 
  market conditions change. 
State tax-free income funds:   
Arizona, California, Massachusetts, Michigan,  Asset Allocation: Balanced Portfolio 
Minnesota, New Jersey, New York, Ohio,  Asset Allocation: Conservative Portfolio 
and Pennsylvania  Asset Allocation: Growth Portfolio 
   
Absolute Return  Putnam RetirementReady Funds — portfolios 
Absolute Return 100 Fund  with automatically adjusting allocations to 
Absolute Return 300 Fund  stocks, bonds, and money market instruments, 
Absolute Return 500 Fund  becoming more conservative over time. 
Absolute Return 700 Fund   
  Putnam RetirementReady 2055 Fund 
Global Sector  Putnam RetirementReady 2050 Fund 
Global Consumer Fund  Putnam RetirementReady 2045 Fund 
Global Energy Fund  Putnam RetirementReady 2040 Fund 
Global Financials Fund  Putnam RetirementReady 2035 Fund 
Global Health Care Fund  Putnam RetirementReady 2030 Fund 
Global Industrials Fund  Putnam RetirementReady 2025 Fund 
Global Natural Resources Fund  Putnam RetirementReady 2020 Fund 
Global Sector Fund  Putnam RetirementReady 2015 Fund 
Global Technology Fund   
Global Telecommunications Fund   Putnam Retirement Income Lifestyle  
Global Utilities Fund  Funds — portfolios with managed 
  allocations to stocks, bonds, and money  
market investments to generate  
  retirement income. 
   
  Putnam Retirement Income Fund Lifestyle 1 
  Prior to June 16, 2011, the fund was known as Putnam 
  RetirementReady Maturity Fund 
   
  Putnam Retirement Income Fund Lifestyle 2 
  Putnam Retirement Income Fund Lifestyle 3 
  Prior to June 16, 2011, the fund was known as Putnam 
  Income Strategies Fund 

 

A short-term trading fee of 1% may apply to redemptions or exchanges from certain funds within the time period specified in the fund's prospectus.

Check your account balances and the most recent month-end performance in the Individual Investors section at putnam.com.

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58



Fund information

Founded over 70 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage over 100 funds across income, value, blend, growth, asset allocation, absolute return, and global sector categories.

Investment Manager  Paul L. Joskow  Mark C. Trenchard 
Putnam Investment  Kenneth R. Leibler  Vice President and 
Management, LLC  Robert E. Patterson  BSA Compliance Officer 
One Post Office Square  George Putnam, III   
Boston, MA 02109  Robert L. Reynolds  Robert T. Burns 
  W. Thomas Stephens  Vice President and 
Investment Sub-Manager    Chief Legal Officer 
Putnam Investments Limited  Officers   
57–59 St James’s Street  Robert L. Reynolds  James P. Pappas 
London, England SW1A 1LD  President  Vice President 
   
Marketing Services  Jonathan S. Horwitz  Judith Cohen 
Putnam Retail Management  Executive Vice President,  Vice President, Clerk and 
One Post Office Square  Principal Executive  Assistant Treasurer 
Boston, MA 02109  Officer, Treasurer and   
  Compliance Liaison   Michael Higgins 
Custodian    Vice President, Senior Associate 
State Street Bank  Steven D. Krichmar  Treasurer and Assistant Clerk 
and Trust Company  Vice President and   
  Principal Financial Officer  Nancy E. Florek 
Legal Counsel    Vice President, Assistant Clerk, 
Ropes & Gray LLP  Janet C. Smith  Assistant Treasurer and 
  Vice President, Assistant  Proxy Manager 
Independent Registered  Treasurer and Principal   
Public Accounting Firm  Accounting Officer  Susan G. Malloy 
PricewaterhouseCoopers LLP    Vice President and 
  Beth S. Mazor  Assistant Treasurer 
Trustees  Vice President 
Jameson A. Baxter, Chair     
Ravi Akhoury  Robert R. Leveille   
Barbara M. Baumann  Vice President and    
Charles B. Curtis  Chief Compliance Officer   
Robert J. Darretta   
John A. Hill     

 

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This report is for the information of shareholders of Putnam Voyager Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus or summary prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.

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Item 2. Code of Ethics:
(a) The fund’s principal executive, financial and accounting officers are employees of Putnam Investment Management, LLC, the Fund’s investment manager. As such they are subject to a comprehensive Code of Ethics adopted and administered by Putnam Investments which is designed to protect the interests of the firm and its clients. The Fund has adopted a Code of Ethics which incorporates the Code of Ethics of Putnam Investments with respect to all of its officers and Trustees who are employees of Putnam Investment Management, LLC. For this reason, the Fund has not adopted a separate code of ethics governing its principal executive, financial and accounting officers.

(c) In May 2008, the Code of Ethics of Putnam Investment Management, LLC was updated in its entirety to include the amendments adopted in August 2007 as well as a several additional technical, administrative and non-substantive changes. In May of 2009, the Code of Ethics of Putnam Investment Management, LLC was amended to reflect that all employees will now be subject to a 90-day blackout restriction on holding Putnam open-end funds, except for portfolio managers and their supervisors (and each of their immediate family members), who will be subject to a one-year blackout restriction on the funds that they manage or supervise. In June 2010, the Code of Ethics of Putnam Investments was updated in its entirety to include the amendments adopted in May of 2009 and to change certain rules and limits contained in the Code of Ethics. In addition, the updated Code of Ethics included numerous technical, administrative and non-substantive changes, which were intended primarily to make the document easier to navigate and understand. In July 2011, the Code of Ethics of Putnam Investments was updated to reflect several technical, administrative and non-substantive changes resulting from changes in employee titles.

Item 3. Audit Committee Financial Expert:
The Funds’ Audit and Compliance Committee is comprised solely of Trustees who are “independent” (as such term has been defined by the Securities and Exchange Commission (“SEC”) in regulations implementing Section 407 of the Sarbanes-Oxley Act (the “Regulations”)). The Trustees believe that each of the members of the Audit and Compliance Committee also possess a combination of knowledge and experience with respect to financial accounting matters, as well as other attributes, that qualify them for service on the Committee. In addition, the Trustees have determined that each of Mr. Leibler, Mr. Hill, Mr. Darretta and Ms. Baumann qualifies as an “audit committee financial expert” (as such term has been defined by the Regulations) based on their review of his or her pertinent experience and education. The SEC has stated that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Audit and Compliance Committee and the Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services:
The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund’s independent auditor:


Fiscal year ended Audit Fees Audit-Related Fees Tax Fees All Other Fees

July 31, 2011 $266,517 $-- $11,319 $ —
July 31, 2010 $217,180 $-- $7,768 $4,652*


*   Includes fees of $4,652 billed by the fund’s independent auditor to the fund for procedures necessitated by regulatory and litigation matters for the fiscal year ended July 31, 2010. These fees were reimbursed to the fund by Putnam Investment Management, LLC (“Putnam Management”).
For the fiscal years ended July 31, 2011and July 31, 2010, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $183,701 and $ 417,027 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.

Audit Fees represent fees billed for the fund’s last two fiscal years relating to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees represent fees billed in the fund’s last two fiscal years for services traditionally performed by the fund’s auditor, including accounting consultation for proposed transactions or concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation.

Tax Fees represent fees billed in the fund’s last two fiscal years for tax compliance, tax planning and tax advice services. Tax planning and tax advice services include assistance with tax audits, employee benefit plans and requests for rulings or technical advice from taxing authorities.

All Other Fees represent procedures necessitated by regulatory and litigation matters.

.
Pre-Approval Policies of the Audit and Compliance Committee. The Audit and Compliance Committee of the Putnam funds has determined that, as a matter of policy, all work performed for the funds by the funds’ independent auditors will be pre-approved by the Committee itself and thus will generally not be subject to pre-approval procedures.

The Audit and Compliance Committee also has adopted a policy to pre-approve the engagement by Putnam Management and certain of its affiliates of the funds’ independent auditors, even in circumstances where pre-approval is not required by applicable law. Any such requests by Putnam Management or certain of its affiliates are typically submitted in writing to the Committee and explain, among other things, the nature of the proposed engagement, the estimated fees, and why this work should be performed by that particular audit firm as opposed to another one. In reviewing such requests, the Committee considers, among other things, whether the provision of such services by the audit firm are compatible with the independence of the audit firm.

The following table presents fees billed by the fund’s independent auditor for services required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.


Fiscal year ended Audit-Related Fees Tax Fees All Other Fees Total Non-Audit Fees

July 31, 2011 $ — $173,510 $ — $ —
July 31, 2010 $ — $249,107 $ — $ —

Item 5. Audit Committee of Listed Registrants
Not applicable
Item 6. Schedule of Investments:
The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:

Not applicable
Item 8. Portfolio Managers of Closed-End Investment Companies
Not Applicable
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:

Not applicable
Item 10. Submission of Matters to a Vote of Security Holders:
Not applicable
Item 11. Controls and Procedures:
(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

(b) Changes in internal control over financial reporting: Not applicable
Item 12. Exhibits:
(a)(1) The Code of Ethics of The Putnam Funds, which incorporates the Code of Ethics of Putnam Investments, is filed herewith.

(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Voyager Fund
By (Signature and Title):
/s/Janet C. Smith
Janet C. Smith
Principal Accounting Officer

Date: September 28, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):
/s/Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer

Date: September 28, 2011
By (Signature and Title):
/s/Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer

Date: September 28, 2011