-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MWUw2o4StICVbCMYWrmyOBZvNtazGY+z/XBOUhsbfZe04zNUvyUnHEm7OBHrtWFO lODJwnX2e80GsZSU1TZMMA== 0000928816-97-000111.txt : 19970404 0000928816-97-000111.hdr.sgml : 19970404 ACCESSION NUMBER: 0000928816-97-000111 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970403 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM VOYAGER FUND CENTRAL INDEX KEY: 0000081280 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046187125 STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01682 FILM NUMBER: 97573987 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQ CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921000 FORMER COMPANY: FORMER CONFORMED NAME: PUTNAM VOYAGER FUND INC /PRED/ DATE OF NAME CHANGE: 19821109 N-30D 1 PUTNAM VOYAGER FUND Putnam Voyager Fund SEMIANNUAL REPORT January 31, 1997 [LOGO: BOSTON * LONDON * TOKYO] Fund highlights * "Putnam Voyager Fund's star quality remains intact. Combined with solid returns, modest risk has given this offering a good long-term risk/reward profile." -- Morningstar Mutual Funds, January 3, 1997 * Putnam Voyager Fund has received a special Lipper Performance Achievement Certificate in recognition of its number-one ranking in the capital appreciation fund category for the 15- and 25-year periods ended 12/31/96. The fund was the top performer among the 28 funds tracked for 15 years and the 21 funds tracked for 25 years. The ranking reflects class A share performance; class B and class M shares were not tracked over this period. For the 1-, 5-, and 10-year periods ended 12/31/96, the fund's class A shares ranked 132 out of 189, 24 out of 78, and 3 out of 56, respectively.* CONTENTS 4 Report from Putnam Management 8 Fund performance summary 11 Portfolio holdings 23 Financial statements 36 Results of February 6, 1997 shareholder meeting * Lipper Analytical Services, an independent research organization, ranks funds according to total return performance. Rankings vary over time and do not reflect the effects of sales charges. Performance of other share classes will vary. Past performance is not indicative of future results. From the Chairman [GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM] (copyright) Karsh, Ottawa Dear Shareholder: Putnam Voyager Fund began fiscal 1997 just after a rather sharp correction in the stock market. Although the market recovered relatively quickly, the stocks of large, established companies were its primary beneficiaries. The growth-oriented stocks in which your fund generally invests lagged -- and still lag -- the market averages. Your fund's managers were quick to spot this trend and tilted the portfolio's emphasis more heavily toward large-company stocks. The shift moderated the effects of the drop in growth stocks but it wasn't enough to allow the fund to catch up with the overall market as measured by the major indexes. The experience speaks forcefully in favor of maintaining a long-term perspective when pursuing capital appreciation as aggressively as your fund does. As you will see in the performance tables on pages 8 and 9, the fund's results over longer periods remain quite respectable. In the following report, your fund's managers discuss fiscal 1997 performance to date and the factors they believe could have a positive impact in the second half. Respectfully yours, /S/GEORGE PUTNAM George Putnam Chairman of the Trustees March 19, 1997 Report from the Fund Managers Roland W. Gillis Charles H. Swanberg Robert R. Beck Putnam Voyager Fund's strategy of diversifying among several types of growth stocks proved especially valuable during the six months ended January 31, 1997. Your fund's ability to invest in larger, more established companies helped balance overall performance as other segments of the portfolio underperformed. During the semiannual period, the fund's class A shares provided a total return of 14.18%; class B shares, 13.72%; and class M shares, 13.91%. The returns taking maximum sales charges into account were 7.61%, 8.72%, and 9.89%, respectively. For complete performance information, including longer-term returns, please see pages 8 and 9. The fiscal year began shortly after a significant market correction for small-company stocks. On July 11, 1996, the NASDAQ Composite Index, which covers 4,500 stocks traded over the counter, including many small-company stocks, fell 35 points. This was one of the biggest declines on record and its effects have not yet faded. With the exception of a slight recovery in August, stocks of many small- and medium-sized rapidly growing companies continued to underperform for the remainder of calendar 1996 and into 1997. * SEVERAL HOLDINGS PERFORM WELL DESPITE CHALLENGING CLIMATE In the face of a fairly rough environment for smaller, more aggressive growth stocks, several of our selections delivered noteworthy performance. For example, St. John Knits, a designer and manufacturer of women's clothing and accessories, recently announced record-breaking sales and earnings for its 1996 fiscal year. Also bringing strength to the portfolio were the stocks of two medium-sized technology companies: EMC Corp., a provider of computer storage systems, and Parametric Technology, a producer of software for computer-aided design. While these stocks, along with others discussed in this report, were viewed favorably as of January 31, 1997, all portfolio holdings are subject to review and adjustment in accordance with the fund's investment strategy and may well vary in the future. Although the performance of small-company stocks was still weak at the fiscal year's midpoint, we remain optimistic about this segment of your fund's portfolio. Despite the market correction and declining prices, earnings for most of these smaller companies have remained intact and their relative valuations have improved. As a result, we expect that these stocks will shift back into favor in the months ahead. * BROADCASTING AND FINANCIAL STOCKS STRENGTHEN PORTFOLIO Your fund also benefited from increased merger and acquisition activity, particularly within the broadcasting and tele-communications industries. Passage of the Telecommunications Act of 1996, which allowed for ownership of multiple television and radio stations, boosted the stocks of many broadcasting companies poised for expansion. The stock of Infinity Broadcasting, in which your fund has long held a significant position, has performed well since the announcement of the company's pending acquisition by Westinghouse Electric Corp. The fund has also benefited from the merger of two of its holdings -- MFS Communications and WorldCom, Inc. The merger, which will integrate a fast-growing long-distance company with a local exchange and Internet-access company, is viewed as a good strategic move for both companies. It is expected to give the new company, to be known as WorldCom, a strong competitive advantage in the telecommunications industry. [GRAPHIC HORIZONTAL BAR CHART OMITTED: TOP INDUSTRY SECTORS] TOP INDUSTRY SECTORS* Computer software 9.0% Retail 7.0% Business services 5.2% Medical supplies and devices 4.6% Pharmaceutical and biotechnology 4.5% Footnote reads: * Based on net assets as of 1/31/97. Sector allocations will vary over time. Another area of strength for the fund was the financial services industry and, in particular, large-company holdings like Citicorp and American Express. Citicorp, the nation's second-largest bank and the largest U.S. issuer of credit cards, has recently gained momentum from its international credit card business. American Express is also pursuing opportunities in the international credit card business as well as expanding into other financial services areas. * EDUCATIONAL AND MEDICAL TECHNOLOGY SECTORS PROVIDE PERFORMANCE BOOST Strong performance came from educational company stocks such as Apollo Group, Inc., which provides higher-educational programs for working adults. Its programs reach more than 40,000 students in the United States and Great Britain. The stock of CBT Group, which provides information technology training for businesses, was also a stellar performer. The company develops, publishes, and markets a library of over 130 software titles that allow employees to tailor training to their work schedules and knowledge levels. Companies involved in the development of breakthrough medical devices continued to bring exceptional performance to the portfolio. Boston Scientific, a leading medical products company, is expected to continue broadening its product line both domestically and overseas. Medtronic, another of the fund's medical technology holdings, has developed impressive products, such as mechanical heart valves, to assist cardiac surgeons and patients. Starbucks Corp., the coffee roaster and retailer, was another portfolio standout. In 10 years, the company has grown from 11 stores to more than 1,100. To sustain its growth momentum, Starbucks is working to increase its brand visibility and is developing new distribution channels for its products. The restaurant sector was also boosted by Boston Chicken, Inc., which franchises and operates more than 1,100 Boston Market stores in 38 states. [GRAPHIC OMITTED: TOP 10 HOLDINGS] TOP 10 HOLDINGS Parametric Technology Computer software Computer Associates International, Inc. Computer software MBNA Corp. Financial services EMC Corp. Computer services American Express Finance Cabletron Systems, Inc. Networking equipment Federal National Mortgage Association Finance Citicorp Banking Cisco Systems, Inc. Networking equipment HFS, Inc. Lodging Footnote reads: These holdings represent 12.8% of the fund's assets as of 1/31/97. Portfolio holdings will vary over time. * A BETTER OUTLOOK FOR SMALL AND MIDSIZE COMPANIES We anticipate that the remainder of the fiscal year will bring a better environment for the stocks of small and midsize companies in the fund's portfolio. The rate of economic growth appears likely to remain steady in the coming months; as this occurs, we believe interest rates will also remain in a fairly narrow range. In such an environment, we expect that aggressive growth stocks of small and medium-sized companies should shift back into favor. Regardless of the economic environment, we will remain focused on companies that can develop innovative products and services that, in turn, should allow the companies to grow faster than the market. We believe the fund, which invests in companies of various sizes, is well positioned to take advantage of a broad range of opportunities, and has the potential to deliver superior long-term returns. The views expressed here are exclusively those of Putnam Management. They are not meant as investment advice. Although the described holdings were viewed favorably as of 1/31/97, there is no guarantee the fund will continue to hold these securities in the future. This fund invests a portion of its assets in small and medium-sized companies. Such investments increase the risk of greater price fluctuations. Performance summary Performance should always be considered in light of a fund's investment strategy. Putnam Voyager Fund is designed for investors seeking aggressive capital appreciation through common stocks. This section provides, at a glance, information about your fund's performance. Total return shows how the value of the fund's shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund. TOTAL RETURN FOR PERIODS ENDED 1/31/97 Class A Class B Class M (inception date) (4/1/69) (4/27/92) (12/1/94) NAV POP NAV CDSC NAV POP - ------------------------------------------------------------------------------ 6 months 14.18% 7.61% 13.72% 8.72% 13.91% 9.89% - ------------------------------------------------------------------------------ 1 year 16.62 9.91 15.71 10.71 15.99 11.90 - ------------------------------------------------------------------------------ 5 years 115.38 103.07 -- -- -- -- Annual average 16.58 15.22 -- -- -- -- - ----------------------------------------------------------------------------- 10 years 362.54 335.86 -- -- -- -- Annual average 16.55 15.86 -- -- -- -- - ------------------------------------------------------------------------------ Life of class -- -- 123.60 121.60 66.86 60.98 Annual average -- -- 18.38 18.15 26.61 24.54 - ------------------------------------------------------------------------------ COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 1/31/97 Standard & Poors Consumer 500 Index Price Index - ------------------------------------------------------------------------------ 6 months 24.13% 1.34% - ------------------------------------------------------------------------------ 1 year 26.33 3.04 - ------------------------------------------------------------------------------ 5 years 119.41 15.21 Annual average 17.01 2.87 - ------------------------------------------------------------------------------ 10 years 287.63 43.08 Annual average 14.51 3.65 - ------------------------------------------------------------------------------ Life of class B 114.57 14.05 Annual average 17.41 2.79 - ------------------------------------------------------------------------------ Life of class M 82.31 6.28 Annual average 31.86 2.85 - ------------------------------------------------------------------------------ Performance data represent past results, do not reflect future performance, and will differ for each share class. They do not take into account any adjustment for taxes payable on reinvested distributions or, for class A shares, distribution fees prior to implementation of the class A distribution plan in 1990. Investment returns and principal value will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. POP assumes 5.75% maximum sales charge for class A shares and 3.50% for class M shares. CDSC for class B shares assumes the applicable sales charge, with the maximum being 5%. PRICE AND DISTRIBUTION INFORMATION 6 months ended 1/31/97 Class A Class B Class M - ------------------------------------------------------------------------------ Distributions (number) 1 1 1 - ------------------------------------------------------------------------------ Income $-- $-- $-- - ------------------------------------------------------------------------------ Capital gains - ------------------------------------------------------------------------------ Long-term 1.088 1.088 1.088 - ------------------------------------------------------------------------------ Short-term -- -- -- - ------------------------------------------------------------------------------ Total $1.088 $1.088 $1.088 - ------------------------------------------------------------------------------ Share value: NAV POP NAV NAV POP - ------------------------------------------------------------------------------ 7/31/96 $15.73 $16.69 $15.15 $15.60 $16.17 - ------------------------------------------------------------------------------ 1/31/97 16.83 17.86 16.10 16.64 17.24 - ------------------------------------------------------------------------------ TOTAL RETURN FOR PERIODS ENDED 12/31/96 (most recent calendar quarter) Class A Class B Class M (inception date) (4/1/69) (4/27/92) (12/1/94) NAV POP NAV CDSC NAV POP - ------------------------------------------------------------------------------ 6 months 0.89% -4.91% 0.50% -4.20% 0.60% -2.90% - ------------------------------------------------------------------------------ 1 year 12.80 6.32 11.94 6.94 12.21 8.28 - ------------------------------------------------------------------------------ 5 years 106.29 94.51 -- -- -- -- Annual average 15.58 14.23 -- -- -- -- - ------------------------------------------------------------------------------ 10 years 402.71 373.70 -- -- -- -- Annual average 17.52 16.83 -- -- -- -- - ------------------------------------------------------------------------------ Life of class -- -- 114.29 112.29 59.84 54.21 Annual average -- -- 17.69 17.45 25.16 23.03 - ------------------------------------------------------------------------------ TERMS AND DEFINITIONS Class A shares are generally subject to an initial sales charge. Class B shares may be subject to a sales charge upon redemption. Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no sales charge on redemption. Net asset value (NAV) is the value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares, not including any initial or contingent deferred sales charge. Public offering price (POP) is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. POP performance figures shown here assume the maximum 5.75% sales charge for class A shares and 3.50% for class M shares. Contingent deferred sales charge (CDSC) is a charge applied at the time of the redemption of class B shares and assumes redemption at the end of the period. Your fund's CDSC declines from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. COMPARATIVE BENCHMARKS Consumer Price Index (CPI) is a commonly used measure of inflation; it does not represent an investment return. Standard & Poor's 500 Index is an unmanaged list of common stocks that is frequently used as a general measure of stock market performance. The index assumes reinvestment of all distributions and interest payments and does not take in account brokerage fees or taxes. Securities in the fund do not match those in the indexes and performance of the fund will differ. It is not possible to invest directly in an index.
Portfolio of investments owned January 31, 1997 (Unaudited) COMMON STOCKS (97.4%) * NUMBER OF SHARES VALUE Advertising (0.9%) - --------------------------------------------------------------------------------------------------------- 673,221 Lamar Advertising Co. + $ 16,493,915 1,173,197 Omnicom Group, Inc. 57,046,704 1,003,314 Outdoor Systems, Inc. + 30,224,834 465,645 TMP Worldwide Inc. + 6,111,591 649,275 Universal Outdoor Holdings, Inc. + 18,179,700 -------------- 128,056,744 Aerospace and Defense (0.8%) - --------------------------------------------------------------------------------------------------------- 550,000 Boeing Co. 58,918,750 250,000 Lockheed Martin Corp. 23,000,000 428,400 Northrop Grumman Corp. 33,468,750 -------------- 115,387,500 Alcoholic Beverages (0.9%) - --------------------------------------------------------------------------------------------------------- 1,275,000 Anheuser-Busch Cos., Inc. 54,187,500 2,050,000 Seagram Co., Ltd. 81,231,250 -------------- 135,418,750 Apparel (1.1%) - --------------------------------------------------------------------------------------------------------- 2,026,125 Gucci Group (Italy) 141,322,218 375,220 Loehmann's Holdings, Inc. + 5,722,105 450,902 The Men's Wearhouse, Inc. + 12,005,266 -------------- 159,049,589 Automotive (0.8%) - --------------------------------------------------------------------------------------------------------- 1,625,000 Echlin, Inc. 48,953,125 1,750,000 Snap-On Inc. 65,187,500 -------------- 114,140,625 Banks (3.4%) - --------------------------------------------------------------------------------------------------------- 961,800 Banc One Corp. 43,641,675 600,000 Bank of Boston Corp. 42,750,000 1,200,000 BankAmerica Corp. 133,950,000 200,000 Barnett Banks, Inc. 8,800,000 1,400,000 Citicorp 162,925,000 930,000 NationsBank Corp. 100,440,000 384,800 Washington Mutual, Inc. 20,899,450 -------------- 513,406,125 Basic Industrial Products (0.4%) - --------------------------------------------------------------------------------------------------------- 1,250,000 General Signal Corp. 56,562,500 Broadcasting (1.9%) - --------------------------------------------------------------------------------------------------------- 563,825 Chancellor Broadcasting Corp. Class A + 16,209,969 2,324,293 Clear Channel Communications, Inc. + 99,072,989 11,000 Cox Radio, Inc. Class A + 202,125 1,782,200 Evergreen Media Corp. Class A + 55,248,200 991,685 Heartland Wireless Communications, Inc. + 9,297,047 383,521 Jacor Communications, Inc. + 10,163,307 416,620 LIN Television Corp. + 18,175,048 165,540 SFX Broadcasting, Inc. Class A + 5,545,590 549,707 Sinclair Broadcast Group, Inc. Class A + 14,017,529 474,400 Univision Communications Inc. Class A + 17,078,400 2,015,000 Westwood One, Inc. + 37,277,500 218,600 Young Broadcasting Corp. Class A + 6,721,950 -------------- 289,009,654 Building Products (0.3%) - --------------------------------------------------------------------------------------------------------- 1,250,000 Masco Corp. 43,125,000 Business Services (5.2%) - --------------------------------------------------------------------------------------------------------- 308,869 Abacus Direct Corp. + 7,798,942 616,545 Affiliated Computer Services, Inc. Class A + 16,184,306 2,425,123 Airgas, Inc. + 47,896,179 351,100 APAC Teleservices, Inc. + 13,780,675 1,375,024 Corestaff, Inc. + 31,625,552 4,776,045 Corporate Express, Inc. + 107,461,013 2,650,000 Deluxe Corp. 81,487,500 1,290,911 Gartner Group Inc. Class A + 44,213,702 687,263 Interim Services Inc. + 24,913,284 892,365 Interpublic Group of Cos., Inc. 44,060,522 1,553,500 Metromedia International Group, Inc. + 17,671,063 101,030 National Data Corp. 4,142,230 32,600 NOVA Corp. + 684,600 439,711 Paychex, Inc. 21,325,984 404,325 Pharmaceutical Product Development, Inc. + 11,725,425 492,300 Precision Response Corp. + 17,230,500 12,888,080 Rentokil Group Ord. PLC (United Kingdom) 94,721,047 450,000 Reuters Holdings PLC ADR (United Kingdom) 28,743,750 2,531,724 Robert Half International, Inc. + 108,864,132 886,900 Select Appointments Holdings PLC ADR (United Kingdom) + 9,977,625 1,136,073 Serco Group PLC (United Kingdom) 12,442,508 72,700 Snyder Communications Inc. + 2,190,088 778,600 Teletech Holdings, Inc. + 22,190,100 -------------- 771,330,727 Cable Television (0.4%) - --------------------------------------------------------------------------------------------------------- 1,200,000 Tele-Comm Liberty Media Group, Inc. Class A + 22,800,000 3,200,000 Tele-Communications Inc. Class A + 42,600,000 -------------- 65,400,000 Chemicals (1.9%) - --------------------------------------------------------------------------------------------------------- 750,000 Air Products & Chemicals, Inc. 53,531,250 350,000 Betz Laboratories, Inc. 20,475,000 650,000 Great Lakes Chemical Corp. 28,031,250 1,200,000 Praxair, Inc. 55,650,000 1,175,000 Raychem Corp. 101,784,375 650,000 Witco Chemical Corp. 19,337,500 -------------- 278,809,375 Computer Services (3.3%) - --------------------------------------------------------------------------------------------------------- 2,521,938 America Online, Inc. + 92,996,464 419,200 CBT Group PLC ADR (Ireland) + 26,724,000 5,277,873 EMC Corp. + 199,899,440 1,320,186 First Data Corp. 47,526,696 737,331 IDT Corp. + 6,267,314 1,158,504 Keane, Inc. + 36,058,437 82,300 National TechTeam, Inc. + 2,139,800 550,000 NCR Corp. + 20,831,250 1,154,292 Sterling Commerce, Inc. + 39,101,642 86,100 Transaction Systems Architects, Inc. Class A + 2,292,413 1,820,519 Vanstar Corp. + 26,852,655 105,100 Whittman-Hart, Inc. + 2,128,275 -------------- 502,818,386 Computer Software (9.0%) - --------------------------------------------------------------------------------------------------------- 221,650 Arbor Software Corp. + 6,594,088 3,083,671 Baan Co., N.V. (Netherlands) + 139,921,572 1,856,742 BMC Software, Inc. + 80,536,184 352,000 CCC Information Services Group + 6,512,000 262,900 Citrix Systems, Inc. + 12,159,125 424,500 Clarify, Inc. + 15,282,000 485,460 Cognex Corp. + 9,284,423 4,926,266 Computer Associates Intl., Inc. 223,529,320 298,677 Documentum, Inc. + 9,781,672 2,448,324 Electronic Arts, Inc. + 78,040,328 1,120,624 Electronics for Imaging, Inc. + 103,937,876 278,845 Forte Software, Inc. + 10,212,698 682,300 Geoworks + 17,057,500 8,400 I2 Technologies, Inc. + 304,500 536,800 Legato Systems, Inc. + 13,151,600 757,350 McAfee Associates, Inc. + 44,115,638 466,094 Medic Computer Systems, Inc. + 18,061,143 1,012,208 Microsoft Corp. + 103,245,216 4,143,975 Parametric Technology Corp. + 239,314,556 1,032,500 PeopleSoft, Inc. + 56,271,250 292,720 Raptor Systems, Inc. + 5,890,990 1,451,750 Rational Software Corp. + 36,838,156 351,200 Scopus Technology, Inc. + 17,647,800 537,800 Security Dynamics Technologies, Inc. + 18,688,550 827,022 Synopsys, Inc. + 36,518,190 470,119 The Learning Co. Inc. + 5,935,252 878,200 Vantive Corp. + 27,004,650 253,976 Viasoft, Inc. + 13,143,258 -------------- 1,348,979,535 Consumer Products (0.9%) - --------------------------------------------------------------------------------------------------------- 1,350,000 Kimberly-Clark Corp. 131,625,000 Consumer Services (0.2%) - --------------------------------------------------------------------------------------------------------- 597,971 Loewen Group, Inc. 21,377,463 500,000 Sabre Group Holdings Inc. + 13,437,500 -------------- 34,814,963 Containers (0.1%) - --------------------------------------------------------------------------------------------------------- 250,000 Temple Inland, Inc. 13,812,500 Cosmetics (0.2%) - --------------------------------------------------------------------------------------------------------- 499,890 Douglas Holding AG (Germany) 17,229,174 717,900 Thermolase Corp. + 9,960,863 -------------- 27,190,037 Data Communications (--%) - --------------------------------------------------------------------------------------------------------- 66,700 Omnipoint Corp. + 1,492,413 Education Services (0.4%) - --------------------------------------------------------------------------------------------------------- 559,372 Apollo Group, Inc. Class A + 18,599,119 889,822 DeVRY, Inc. + 23,357,828 408,300 Learning Tree International, Inc. + 15,923,700 336,140 Sylvan Learning Systems, Inc. + 9,916,130 -------------- 67,796,777 Electric Utilities (0.3%) - --------------------------------------------------------------------------------------------------------- 1,375,192 Calenergy, Inc. + 52,772,993 Electronics and Electrical Equipment (2.7%) - --------------------------------------------------------------------------------------------------------- 2,100,000 ADT Ltd. + 46,987,500 2,279,715 Applied Materials, Inc. + 112,560,928 554,970 CHS Electronics, Inc. + 10,371,002 500,000 General Electric Co. 51,500,000 600,000 Hewlett-Packard Co. 31,575,000 630,200 Lernout & Hauspie Speech Products N.V. (Belgium) + 14,809,700 222,550 Microchip Technology, Inc. + 8,484,719 200,400 Rockwell International Corp. 13,176,300 448,700 Sipex Corp. + 13,797,525 396,784 Solectron Corp. + 23,906,236 1,469,480 Thermo Instrument Systems, Inc. + 49,227,580 1,365,093 Westinghouse Electric Corp. 25,083,584 -------------- 401,480,074 Energy-Related (1.0%) - --------------------------------------------------------------------------------------------------------- 4,493,355 Thermo Electron Corp. + 153,335,739 Entertainment (0.5%) - --------------------------------------------------------------------------------------------------------- 1,051,208 Disney (Walt) Productions, Inc. 77,000,986 Environmental Control (1.6%) - --------------------------------------------------------------------------------------------------------- 535,700 Memtec Ltd. ADR (Australia) 15,535,300 1,068,600 Pall Corp. 23,909,925 2,717,435 Republic Industries, Inc. + 113,792,591 773,589 U.S. Filter Corp. + 29,686,478 692,600 USA Waste Services, Inc. + 25,279,900 800,000 WMX Technologies, Inc. 29,300,000 -------------- 237,504,194 Finance (4.1%) - --------------------------------------------------------------------------------------------------------- 3,191,610 American Express Co. 199,076,674 4,905,832 Federal Home Loan Mortgage Corp. 148,401,418 4,293,410 Federal National Mortgage Association 169,589,695 744,150 Household International, Inc. 73,763,869 208,300 Student Loan Marketing Assn. 22,678,663 -------------- 613,510,319 Financial Services (2.6%) - --------------------------------------------------------------------------------------------------------- 221,567 Aames Financial Corp. 9,527,381 900,000 Associates First Capital Corp. 43,762,500 479,718 Concord EFS, Inc. + 9,594,360 876,056 Countrywide Credit Industries, Inc. 26,172,173 304,302 First USA Paymentech, Inc. + 10,156,079 6,037,403 MBNA Corp. 208,290,404 599,684 RAC Financial Group, Inc. + 19,789,572 553,644 Southern Pacific Funding Corp. + 11,972,552 1,160,050 TCF Financial Corp. 49,157,119 -------------- 388,422,140 Food and Beverages (1.2%) - --------------------------------------------------------------------------------------------------------- 2,837,500 Archer Daniels Midland Co. 56,040,625 1,300,000 PepsiCo, Inc. 45,337,500 1,350,000 Sara Lee Corp. 53,325,000 975,000 Whitman Corp. 22,425,000 -------------- 177,128,125 Gas Pipelines (0.8%) - --------------------------------------------------------------------------------------------------------- 361,000 El Paso Natural Gas Co. 19,448,875 1,057,700 Enron Corp. 43,630,125 1,000,000 Sonat, Inc. 53,250,000 -------------- 116,329,000 Gas Utilities (0.7%) - --------------------------------------------------------------------------------------------------------- 1,500,000 Columbia Gas System, Inc. 97,687,500 Health Care Information Systems (0.4%) - --------------------------------------------------------------------------------------------------------- 991,420 HBO & Co. 62,087,678 Health Care Services (2.4%) - --------------------------------------------------------------------------------------------------------- 370,800 ABR Information Services, Inc. + 16,268,850 263,298 Access Health, Inc. + 7,569,818 1,027,344 Cardinal Health, Inc. 64,337,418 209,800 Carematrix Corp. + 3,278,125 2,506,325 Healthsouth Rehabilitation Corp. + 109,338,428 775,572 Renal Treatment Centers, Inc. + 21,812,963 694,000 Rotech Medical Corp. + 11,971,500 545,700 Total Renal Care Holdings, Inc. + 19,986,263 1,579,418 United Healthcare Corp. 76,996,628 742,705 Vivra, Inc. + 22,652,503 -------------- 354,212,496 Hospital Management (0.5%) - --------------------------------------------------------------------------------------------------------- 2,383,797 Health Management Assoc., Inc. + 65,852,392 652,000 Physician Reliance Network, Inc. + 5,297,500 -------------- 71,149,892 Household Products (0.9%) - --------------------------------------------------------------------------------------------------------- 1,172,300 Blyth Industries, Inc. + 43,521,638 1,850,000 Tupperware Corp. 86,718,750 -------------- 130,240,388 Insurance (1.6%) - --------------------------------------------------------------------------------------------------------- 850,000 Aetna Inc. 67,150,000 1,450,000 American General Corp. 57,818,750 375,000 American International Group, Inc. 45,421,875 516,464 HCC Insurance Holdings, Inc. 14,396,434 500,000 ITT Hartford Group, Inc. + 36,687,500 1,000,000 USF&G Corp. 21,125,000 -------------- 242,599,559 Leisure (0.3%) - --------------------------------------------------------------------------------------------------------- 433,362 Adidas AG 144A (Germany) + 20,368,014 506,000 Family Golf Centers, Inc. + 13,598,750 92,400 Signature Resorts, Inc. + 3,384,150 -------------- 37,350,914 Lodging (1.7%) - --------------------------------------------------------------------------------------------------------- 678,100 Doubletree Corp. + 27,971,625 983,600 Extended Stay America, Inc. + 17,827,750 2,297,247 HFS, Inc. + 160,807,290 1,401,300 Prime Hospitality Corp. + 23,997,263 597,900 Promus Hotel Corp. + 19,506,488 86,500 Studio Plus Hotels, Inc. + 1,838,125 -------------- 251,948,541 Medical Management Services (0.8%) - --------------------------------------------------------------------------------------------------------- 105,200 NCS HealthCare, Inc. Class A + 3,563,650 391,300 OccuSystems, Inc. + 9,048,813 2,787,342 Phycor, Inc. + 97,905,388 248,600 Phymatrix, Inc. + 3,946,525 88,200 Physicians Resource Group, Inc. + 1,510,425 334,749 Sunrise Assisted Living, Inc. + 8,661,630 -------------- 124,636,431 Medical Supplies and Devices (4.6%) - --------------------------------------------------------------------------------------------------------- 127,800 American HomePatient, Inc. + 3,051,225 346,900 Bard (C.R.), Inc. 9,799,925 1,495,040 Boston Scientific Corp. + 102,036,480 250,900 Endosonics Corp. + 3,230,338 1,878,250 Johnson & Johnson 108,234,156 614,000 Lifecore Biomedical, Inc. + 11,052,000 200,000 Mallinckrodt, Inc. 8,200,000 1,073,567 Medtronic, Inc. 73,539,340 169,600 Minimed, Inc. + 5,808,800 241,300 Neuromedical Systems, Inc. + 2,684,463 821,444 Omnicare, Inc. 22,692,391 560,517 Physician Sales & Service, Inc. + 10,649,823 1,139,878 Shared Medical Systems Corp. 53,787,993 1,019,300 Sola International, Inc. + 37,586,688 328,383 Spine-Tech, Inc. + 7,142,330 4,627,087 Stryker Corp. 134,185,523 1,726,625 Thermo Cardiosystems, Inc. + 44,244,766 376,450 Thermotrex Corp. + 10,822,938 29,485 Trex Medical Corp. + 445,961 1,000,000 U.S. Surgical Corp. 40,125,000 -------------- 689,320,140 Metals and Mining (0.4%) - --------------------------------------------------------------------------------------------------------- 1,450,000 Freeport-McMoRan Copper & Gold Co., Inc. Class A 39,693,750 786,600 Miller Industries, Inc./Tennessee + 15,928,650 -------------- 55,622,400 Networking Equipment (3.7%) - --------------------------------------------------------------------------------------------------------- 1,117,169 Ascend Communications, Inc. + 77,782,892 2,746,328 Bay Networks Inc. + 59,732,634 207,142 Black Box Corp. + 7,767,825 5,280,082 Cabletron Systems, Inc. + 183,482,850 1,406,270 Cascade Communications Corp. + 55,899,233 2,316,049 Cisco Systems, Inc. + 161,544,418 -------------- 546,209,852 Nursing Homes (0.2%) - --------------------------------------------------------------------------------------------------------- 1,390,800 Health Care & Retirement Corp. + 35,986,950 Office Equipment (1.4%) - --------------------------------------------------------------------------------------------------------- 704,200 BT Office Products International, Inc. + 7,218,050 842,718 Ikon Office Solutions, Inc. 37,184,932 3,758,563 Viking Office Products, Inc. + 104,300,123 950,000 Xerox Corp. 55,693,750 -------------- 204,396,855 Oil and Gas (3.3%) - --------------------------------------------------------------------------------------------------------- 406,207 British Petroleum PLC ADR (United Kingdom) 57,529,066 250,000 Exxon Corp. 25,906,250 1,025,000 Halliburton Co. 74,184,375 1,100,000 Mobil Corp. 144,375,000 480,000 Production Operators Corp. 23,280,000 575,000 Schlumberger Ltd. 63,896,875 2,548,900 Total Corp. ADR (France) + 109,921,313 -------------- 499,092,879 Paper and Forest Products (0.6%) - --------------------------------------------------------------------------------------------------------- 675,000 Fort Howard Corp. + 21,431,250 1,211,833 Unisource Worldwide, Inc. + 26,357,357 900,000 Weyerhaeuser Co. 40,950,000 -------------- 88,738,607 Pharmaceuticals and Biotechnology (4.5%) - --------------------------------------------------------------------------------------------------------- 650,000 Astra AB (Sweden) 30,980,990 758,398 Biochem Pharmaceutical, Inc. + 42,565,088 510,700 Dura Pharmaceuticals, Inc. + 21,449,400 1,010,422 Elan Corp. PLC ADR (Ireland) + 38,901,247 1,028,000 Gilead Sciences, Inc. + 33,538,500 748,619 IDEXX Laboratories, Inc. + 24,330,118 76,000 Jones Medical Industries, Inc. 2,888,000 900,000 Lilly (Eli) & Co. 78,412,500 372,000 Martek Biosciences Corp. + 9,114,000 623,695 Merck & Co., Inc. 56,600,321 304,172 Parexel International Corp. + 17,870,105 1,558,154 Pfizer, Inc. 144,713,553 2,625,151 Pharmacia & Upjohn, Inc. 97,786,875 750,500 Smithkline Beecham PLC ADR (United Kingdom) 54,223,625 173,800 Warner-Lambert Co. 13,990,900 -------------- 667,365,222 Photography (1.4%) - --------------------------------------------------------------------------------------------------------- 1,400,000 Eastman Kodak Co. 121,450,000 2,050,000 Polaroid Corp. 90,200,000 -------------- 211,650,000 Publishing (1.8%) - --------------------------------------------------------------------------------------------------------- 250,000 Gannett Co., Inc. 19,156,250 974,400 Harcourt General, Inc. 44,091,600 500,000 McGraw-Hill, Inc. 24,875,000 1,000,000 Tribune Co. 38,250,000 1,190,847 Wolters Kluwer N.V. (Netherlands) + 146,842,452 -------------- 273,215,302 Railroads (0.7%) - --------------------------------------------------------------------------------------------------------- 590,000 Burlington Northern Santa Fe Corp. 51,625,000 1,289,785 Wisconsin Central Transportation Corp. + 47,883,268 -------------- 99,508,268 Restaurants (0.9%) - --------------------------------------------------------------------------------------------------------- 1,091,077 Applebee's International, Inc. 29,459,079 887,174 Boston Chicken, Inc. + 30,718,400 1,882,564 J.D. Wetherspoon PLC (United Kingdom) 34,137,644 798,900 Landry's Seafood Restaurants, Inc. + 16,277,588 643,000 Papa Johns International, Inc. + 18,566,625 139,000 PizzaExpress PLC (United Kingdom) 1,270,856 -------------- 130,430,192 Retail (7.0%) - --------------------------------------------------------------------------------------------------------- 1,566,825 Bed Bath & Beyond, Inc. + 43,087,688 737,562 Boise Cascade Office Products + 16,871,731 3,713,630 CompUSA, Inc. + 76,129,415 1,900,000 Dayton-Hudson Corp. 71,487,500 5,916,349 Dixons Group PLC (United Kingdom) 48,976,744 1,550,000 Federated Department Stores Inc. + 50,956,250 373,800 Global DirectMail Corp. + 12,942,825 1,128,735 Kohls Corp. + 43,879,573 1,350,000 Lowe's Cos., Inc. 44,718,750 6,632,839 Officemax, Inc. + 79,594,068 1,100,000 Payless Shoesource, Inc. + 41,250,000 175,200 Payment Services., Inc. + 2,803,200 860,218 Petco Animal Supplies, Inc. + 20,967,814 5,947,062 Price/Costco, Inc. + 158,340,526 2,100,000 Revco D.S., Inc. + 78,750,000 1,450,000 Rite Aid Corp. 58,000,000 1,967,197 Staples, Inc. + 40,327,539 4,200,332 Starbucks Corp. + 143,861,371 347,501 Wolverine World Wide, Inc. 10,729,093 -------------- 1,043,674,087 Satellite Services (0.4%) - --------------------------------------------------------------------------------------------------------- 1,787,000 PanAmSat Corp. + 52,716,500 Semiconductors (3.8%) - --------------------------------------------------------------------------------------------------------- 374,091 Actel Corp. + 7,668,866 2,386,217 Analog Devices Inc. + 68,902,016 381,999 Lattice Semiconductor Corp. 19,816,198 1,976,189 Linear Technology Corp. 96,339,214 2,749,831 Maxim Integrated Products Inc. + 154,677,994 2,246,560 National Semiconductor Corp. + 62,342,040 828,778 SGS-Thomson Microelectronics ADR (France) + 58,636,044 700,000 Texas Instruments, Inc. 54,862,500 863,363 Xilinx, Inc. + 39,283,017 -------------- 562,527,889 Specialty Consumer Products (0.4%) - --------------------------------------------------------------------------------------------------------- 405,033 Central Garden and Pet Co. + 10,935,891 804,000 Fastenal Co. 30,351,000 198,198 Luxottica Group S.P.A. ADR (Italy) 11,148,638 238,300 Marks Brothers Jewelers, Inc. + 2,561,725 -------------- 54,997,254 Steel (0.1%) - --------------------------------------------------------------------------------------------------------- 250,000 Nucor Corp. 13,000,000 Supermarkets (0.3%) - --------------------------------------------------------------------------------------------------------- 76,000 Carrefour Supermarche SA (France) + 45,573,917 Telecommunication Equipment (1.3%) - --------------------------------------------------------------------------------------------------------- 352,700 Brooks Fiber Properties, Inc. + 9,037,938 1,213,200 Pairgain Technologies, Inc. + 49,665,375 1,641,897 Picturetel Corp. + 30,375,095 2,361,689 Tellabs, Inc. + 97,272,066 77,800 West TeleServices Corp. + 1,789,400 -------------- 188,139,874 Telephone Services (2.3%) - --------------------------------------------------------------------------------------------------------- 84,000 Deutsche Telekom AG ADR (Germany) + 1,564,500 1,200,000 GTE Corp. 56,400,000 249,800 Intermedia Communications, Inc. + 5,932,750 406,196 IXC Communications, Inc. + 13,607,566 327,628 LCI International, Inc. + 7,371,630 1,875,000 MCI Communications Corp. 65,859,375 1,321,600 McLeod, Inc. Class A + 30,396,800 89,900 Natural Microsystems Corp. + 3,101,550 1,700,000 Sprint Corp. 69,275,000 994,080 Tel-Save Holdings, Inc. + 12,705,585 3,272,368 WorldCom, Inc. + 82,218,246 -------------- 348,433,002 Textiles (0.4%) - --------------------------------------------------------------------------------------------------------- 703,772 Nautica Enterprises, Inc. + 16,538,642 783,800 St. John Knits, Inc. 35,662,900 -------------- 52,201,542 Tobacco (0.3%) - --------------------------------------------------------------------------------------------------------- 1,550,000 UST, Inc. 47,662,500 Trucking (0.2%) - --------------------------------------------------------------------------------------------------------- 1,300,000 Ryder System, Inc. 37,050,000 Wireless Communications (1.2%) - --------------------------------------------------------------------------------------------------------- 1,300,000 Airtouch Communications, Inc. + 33,637,500 450,395 CellNet Data Systems Inc. + 5,967,734 558,080 Clearnet Communications Inc. Class A (Canada) + 7,115,520 438,080 ICG Communications, Inc. + 7,556,880 5,662,166 NEXTEL Communications, Inc. Class A + 87,055,802 2,051,719 Paging Network, Inc. + 29,878,144 717,100 Preferred Networks, Inc. + 4,661,150 -------------- 175,872,730 -------------- Total Common Stocks (cost $11,051,113,452) $14,511,009,131 PREFERRED STOCKS (0.2%) *(cost $29,134,961) NUMBER OF SHARES VALUE - --------------------------------------------------------------------------------------------------------- 158,810 Fresenius Medical Care Ser. D $9.00 trust pfd. $31,872,439 CONVERTIBLE BONDS AND NOTES (0.1%) *(cost $8,241,000) PRINCIPAL AMOUNT VALUE - --------------------------------------------------------------------------------------------------------- $ 8,000,000 Signature Resorts, Inc. cv. sub. notes 5 3/4s, 2007 $8,250,000 CONVERTIBLE PREFERRED STOCKS (--%) * (cost $1,355,000) NUMBER OF SHARES VALUE - --------------------------------------------------------------------------------------------------------- 27,100 Vanstar Corp. 144A $3.375 cv. pfd. $1,107,713 SHORT-TERM INVESTMENTS (2.5%) * PRINCIPAL AMOUNT VALUE - --------------------------------------------------------------------------------------------------------- 20,000,000 Acquisition Hldg. Co. effective yield of 5.32%, March 10, 1997 $ 19,890,645 25,000,000 Banc One Corp. effective yield of 5.30%, February 25, 1997 24,911,667 25,000,000 Corporate Receivables Corp. effective yield of 5.37%, April 4, 1997 24,746,889 30,000,000 Delaware Funding Corp. effective yield of 5.33%, February 3, 1997 29,991,116 25,000,000 Falcon Asset Securitization Corp. effective yield of 5.34%, April 22, 1997 24,702,222 25,000,000 Falcon Asset Securitization Corp. effective yield of 5.32%, February 5, 1997 24,985,222 25,000,000 Federal Home Loan Mortgage Corp. effective yield of 5.23%, February 13, 1997 24,956,417 10,000,000 Federal Home Loan Mortgage Corp. effective yield of 5.22%, March 3, 1997 9,956,500 20,000,000 Federal National Mortgage Assn. effective yield of 5.40%, February 4, 1997 19,991,000 6,000,000 Federal National Mortgage Assn. effective yield of 5.15%, March 27,1997 5,953,650 25,000,000 General Electric Capital Corp. effective yield of 5.38%, March 31, 1997 24,783,306 25,000,000 IBM Credit Corp. effective yield of 5.31%, March 19, 1997 24,837,750 25,000,000 Merrill Lynch & Co Inc. effective yield of 5.32%, February 12, 1997 24,959,361 30,000,000 Sears Roebuck Acceptance Corp. effective yield of 5.32%, February 19,1997 29,920,200 54,644,000 Interest in $667,115,000 joint repurchase agreement dated January 31, 1997 with UBS Securities due February 2, 1997 with respect to various U.S. Treasury obligations -- maturity value of $54,669,318 for an effective yield of 5.56% 54,652,439 -------------- Total Short-Term Investments (cost $369,238,384) $ 369,238,384 - --------------------------------------------------------------------------------------------------------- Total Investments (cost $11,459,082,797) *** $14,921,477,667 - --------------------------------------------------------------------------------------------------------- * Percentages indicated are based on net assets of $14,904,290,156. *** The aggregate identified cost on a tax basis is $11,478,361,808, resulting in gross unrealized appreciation and depreciation of $3,916,092,486 and $472,976,627 respectively, or net unrealized appreciation of $3,443,115,859. + Non-income-producing security. 144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. ADR after the name of a foreign holding stands for American Depository Receipts representing ownership of foreign securities on deposit with a domestic custodian bank. The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities January 31, 1997 (Unaudited) Assets - --------------------------------------------------------------------------------------------------- Investments in securities, at value (identified cost $11,459,082,797) (Note 1) $14,921,477,667 - --------------------------------------------------------------------------------------------------- Cash 3,120,169 - --------------------------------------------------------------------------------------------------- Dividends and interest receivable 6,415,948 - --------------------------------------------------------------------------------------------------- Receivable for shares of the fund sold 48,250,079 - --------------------------------------------------------------------------------------------------- Receivable for securities sold 105,274,075 - --------------------------------------------------------------------------------------------------- Total assets 15,084,537,938 Liabilities - --------------------------------------------------------------------------------------------------- Payable for securities purchased 127,796,700 - --------------------------------------------------------------------------------------------------- Payable for shares of the fund repurchased 21,191,563 - --------------------------------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 17,671,419 - --------------------------------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 4,278,330 - --------------------------------------------------------------------------------------------------- Payable for compensation of Trustees (Note 2) 54,956 - --------------------------------------------------------------------------------------------------- Payable for administrative services (Note 2) 20,335 - --------------------------------------------------------------------------------------------------- Payable for distribution fees (Note 2) 5,798,497 - --------------------------------------------------------------------------------------------------- Other accrued expenses 3,435,982 - --------------------------------------------------------------------------------------------------- Total liabilities 180,247,782 - --------------------------------------------------------------------------------------------------- Net Assets $14,904,290,156 Represented by - --------------------------------------------------------------------------------------------------- Paid-in capital (Notes 1 and 4) $11,336,860,923 - --------------------------------------------------------------------------------------------------- Accumulated net investment loss (Note 1) (22,805,836) - --------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments (Note 1) 127,840,199 - --------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments 3,462,394,870 - --------------------------------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $14,904,290,156 Computation of net asset value and offering price - --------------------------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($9,202,684,089 divided by 546,672,712 shares) $16.83 - --------------------------------------------------------------------------------------------------- Offering price per class A share (100/94.25 of $16.83)* $17.86 - --------------------------------------------------------------------------------------------------- Net asset value and offering price per class B share ($4,599,364,339 divided by 285,609,361 shares)** $16.10 - --------------------------------------------------------------------------------------------------- Net asset value and redemption price per class M share ($143,131,825 divided by 8,600,304 shares) $16.64 - --------------------------------------------------------------------------------------------------- Offering price per class M share (100/96.50 of $16.64)* $17.24 - --------------------------------------------------------------------------------------------------- Net asset value, offering price and redemption price per class Y share ($959,109,903 divided by 56,438,979 shares) $16.99 - --------------------------------------------------------------------------------------------------- * On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. ** Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. The accompanying notes are an integral part of these financial statements.
Statement of operations Six months ended January 31, 1997 (Unaudited) Investment income: - -------------------------------------------------------------------------------------------------- Dividends (net of foreign tax of $90,627) $ 49,588,577 - -------------------------------------------------------------------------------------------------- Interest 11,753,395 - -------------------------------------------------------------------------------------------------- Total investment income 61,341,972 - -------------------------------------------------------------------------------------------------- Expenses: - -------------------------------------------------------------------------------------------------- Compensation of Manager (Note 2) 33,886,725 - -------------------------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 14,528,242 - -------------------------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 165,004 - -------------------------------------------------------------------------------------------------- Administrative services (Note 2) 30,434 - -------------------------------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 10,644,832 - -------------------------------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 20,620,998 - -------------------------------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 440,227 - -------------------------------------------------------------------------------------------------- Reports to shareholders 688,922 - -------------------------------------------------------------------------------------------------- Registration fees 922,740 - -------------------------------------------------------------------------------------------------- Auditing 70,370 - -------------------------------------------------------------------------------------------------- Legal 83,176 - -------------------------------------------------------------------------------------------------- Postage 3,068,360 - -------------------------------------------------------------------------------------------------- Other 553,363 - -------------------------------------------------------------------------------------------------- Total expenses 85,703,393 - -------------------------------------------------------------------------------------------------- Expense reduction (Note 2) (1,555,585) - -------------------------------------------------------------------------------------------------- Net expenses 84,147,808 - -------------------------------------------------------------------------------------------------- Net investment loss (22,805,836) - -------------------------------------------------------------------------------------------------- Net realized gain on investments (Notes 1 and 3) 246,539,572 - -------------------------------------------------------------------------------------------------- Net unrealized depreciation of assets and liabilities in foreign currencies during the period (8,750) - -------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments during the period 1,477,853,283 - -------------------------------------------------------------------------------------------------- Net gain on investments 1,724,384,105 - -------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $1,701,578,269 - -------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets Six months ended Year ended January 31 July 31 1997* 1996 ------------------------------------------ Increase in net assets - ---------------------------------------------------------------------------------------------------------------------- Operations: - ---------------------------------------------------------------------------------------------------------------------- Net investment loss $ (22,805,836) $ (28,749,167) - ---------------------------------------------------------------------------------------------------------------------- Net realized gain on investments 246,539,572 962,821,663 - ---------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 1,477,844,533 144,557,473 - ---------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 1,701,578,269 1,078,629,969 - ---------------------------------------------------------------------------------------------------------------------- Distributions to shareholders: - ---------------------------------------------------------------------------------------------------------------------- From net realized gain on investments Class A (548,605,537) (317,069,690) - ---------------------------------------------------------------------------------------------------------------------- Class B (281,238,919) (135,078,052) - ---------------------------------------------------------------------------------------------------------------------- Class M (8,171,341) (2,101,620) - ---------------------------------------------------------------------------------------------------------------------- Class Y (52,119,075) (22,695,086) - ---------------------------------------------------------------------------------------------------------------------- Increase from capital share transactions (Note 4) 2,557,902,760 3,796,887,582 - ---------------------------------------------------------------------------------------------------------------------- Total increase in net assets 3,369,346,157 4,398,573,103 - ---------------------------------------------------------------------------------------------------------------------- Net Assets - ---------------------------------------------------------------------------------------------------------------------- Beginning of period 11,534,943,999 7,136,370,896 - ---------------------------------------------------------------------------------------------------------------------- End of period (including accumulated net investment loss of $22,805,836 and $--, respectively) $14,904,290,156 $11,534,943,999 - ---------------------------------------------------------------------------------------------------------------------- * Unaudited The accompanying notes are an integral part of these financial statements.
Financial highlights (For a share outstanding throughout the period) Six months December 1, 1994 ended Year (commencement January 31 ended of operations) to (unaudited) July 31 July 31 ------------------------------------------------------------------- 1997 1996 1995 ------------------------------------------------------------------- Class M - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $15.60 $14.37 $11.79 - ------------------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) (.05)(d) (.09)(d) (.01) - ------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments 2.18 2.18 3.10 - ------------------------------------------------------------------------------------------------------------------------------ Total from investment operations 2.13 2.09 3.09 - ------------------------------------------------------------------------------------------------------------------------------ Less distributions from: - ------------------------------------------------------------------------------------------------------------------------------ Net investment income -- -- -- - ------------------------------------------------------------------------------------------------------------------------------ Net realized gain on investments (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------ Total distributions (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $16.64 $15.60 $14.37 - ------------------------------------------------------------------------------------------------------------------------------ Total investment return at net asset value (%)(a) 13.91* 14.97 27.42* - ------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $143,132 $87,782 $19,004 - ------------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .77* 1.50 1.06* - ------------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) (.31)* (.57) (.24)* - ------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 29.89* 57.92 65.43 - ------------------------------------------------------------------------------------------------------------------------------ Average commission rate paid (c) $.0543 - ------------------------------------------------------------------------------------------------------------------------------ Financial highlights (continued) (For a share outstanding throughout the period) Six months ended January 31 (unaudited) Year ended July 31 -------------------------------------------------------------------------- 1997 1996 1995 -------------------------------------------------------------------------- Class Y - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $15.85 $14.48 $11.22 - ------------------------------------------------------------------------------------------------------------------------------- Investment operations - ------------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) .01(d) .02(d) .03 - ------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 2.22 2.21 3.74 - ------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 2.23 2.23 3.77 - ------------------------------------------------------------------------------------------------------------------------------- Less distributions from: - ------------------------------------------------------------------------------------------------------------------------------- Net investment income -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------- Total distributions (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $16.99 $15.85 $14.48 - ------------------------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) 14.32* 15.85 34.90 - ------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $959,110 $709,595 $351,817 - ------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) .40* .77 .83 - ------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) .06* .15 .39 - ------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 29.89* 57.92 65.43 - ------------------------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) $.0543 - ------------------------------------------------------------------------------------------------------------------------------- Financial highlights (continued) (For a share outstanding throughout the period) March 31, 1994 Six months (commencement ended of operations) to January 31 Year ended July 31 (unaudited) July 31 ------------------------------------------------------------------------ 1994 1997 1996 - ----------------------------------------------------------------------------------------------------------------------------- Class Y Class B - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $11.24 $15.15 $14.01 - ---------------------------------------------------------------------------------------------------------------------------- Investment operations - ---------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) -- (.07)(d) (.13)(d) - ---------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments (.02) 2.11 2.13 - ---------------------------------------------------------------------------------------------------------------------------- Total from investment operations (.02) 2.04 2.00 - ---------------------------------------------------------------------------------------------------------------------------- Less distributions from: - ---------------------------------------------------------------------------------------------------------------------------- Net investment income -- -- -- - ---------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments -- (1.09) (.86) - ---------------------------------------------------------------------------------------------------------------------------- Total distributions -- (1.09) (.86) - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $11.22 $16.10 $15.15 - ---------------------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) (0.18)* 13.72* 14.70 - ---------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $82,102 $4,599,364 $3,405,318 - ---------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) .31* .90* 1.78 - ---------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) (.05)* (.43)* (.85) - ---------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 57.74 29.89* 57.92 - ---------------------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) $.0543 - ---------------------------------------------------------------------------------------------------------------------------- Financial highlights (continued) (For a share outstanding throughout the period) Year ended July 31 ---------------------------------------------------------------- 1995 1994 1993 ---------------------------------------------------------------- Class B - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $10.97 $10.89 $9.63 - ------------------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) (.06) (.05) (.03) - ------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments 3.61 .59 1.81 - ------------------------------------------------------------------------------------------------------------------------------ Total from investment operations 3.55 .54 1.78 - ------------------------------------------------------------------------------------------------------------------------------ Less distributions from: - ------------------------------------------------------------------------------------------------------------------------------ Net investment income -- -- -- - ------------------------------------------------------------------------------------------------------------------------------ Net realized gain on investments (.51) (.46) (.52) - ------------------------------------------------------------------------------------------------------------------------------ Total distributions (.51) (.46) (.52) - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $14.01 $10.97 $10.89 - ------------------------------------------------------------------------------------------------------------------------------ Total investment return at net asset value (%)(a) 33.65 4.71 18.79 - ------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $1,870,370 $911,069 $408,361 - ------------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) 1.82 1.84 1.87 - ------------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) (.58) (.91) (.91) - -------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 65.43 57.74 64.62 - -------------------------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) - -------------------------------------------------------------------------------------------------------------------------------- See page 29 for Notes to Financial Highlights Financial highlights (continued) (For a share outstanding throughout the period) April 27, 1992 Six months (commencement ended Year of operations) to January 31 ended July 31 (unaudited) July 31 ---------------------------------------------------------------- 1992 1997 1996 ---------------------------------------------------------------- Class B Class A - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $9.34 $15.73 $14.42 - ------------------------------------------------------------------------------------------------------------------------------- Investment operations - -------------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (.04)(d) (.01)(d) (.02)(d) - ------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments .33 2.20 2.19 - ------------------------------------------------------------------------------------------------------------------------------- Total from investment operations .29 2.19 2.17 - ------------------------------------------------------------------------------------------------------------------------------- Less distributions from: .00 - ------------------------------------------------------------------------------------------------------------------------------- Net investment income -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments -- (1.09) (.86) - ------------------------------------------------------------------------------------------------------------------------------- Total distributions -- (1.09) (.86) - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $9.63 $16.83 $15.73 - ------------------------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) 3.11* 14.18* 15.49 - ------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $42,492 $9,202,684 $7,332,248 - ------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) .63* .52* 1.03 - ------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) (.39)* (.06)* (.10) - ------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 44.17 29.89* 57.92 - ------------------------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) $.0543 - ------------------------------------------------------------------------------------------------------------------------------- Financial highlights (continued) (For a share outstanding throughout the period) Year ended July 31 --------------------------------------------------------------- 1995 1994 1993 --------------------------------------------------------------- Class A - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $11.19 $11.02 $9.67 - ------------------------------------------------------------------------------------------------------------------------------- Investment operations - ------------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) .02 (.02) (.02) - ------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 3.72 .65 1.89 - ------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 3.74 .63 1.87 - ------------------------------------------------------------------------------------------------------------------------------- Less distributions from: - ------------------------------------------------------------------------------------------------------------------------------- Net investment income -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments (.51) (.46) (.52) - ------------------------------------------------------------------------------------------------------------------------------- Total distributions (.51) (.46) (.52) - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $14.42 $11.19 $11.02 - ------------------------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) 34.72 5.49 19.69 - ------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $4,895,180 $3,051,878 $2,403,332 - ------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) 1.07 1.10 1.12 - ------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) .17 (.18) (.14) - ------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 65.43 57.74 64.62 - ------------------------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) - ------------------------------------------------------------------------------------------------------------------------------- Financial highlights (continued) (For a share outstanding throughout the period) Year ended July 31 ------------------------- 1992 ------------------------- Net asset value, beginning of period $9.00 - -------------------------------------------------------------------- Investment operations - -------------------------------------------------------------------- Net investment income (loss) .02 - -------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 1.16 - -------------------------------------------------------------------- Total from investment operations 1.18 - -------------------------------------------------------------------- Less distributions from: - -------------------------------------------------------------------- Net investment income (.03) - -------------------------------------------------------------------- Net realized gain on investments (.48) - -------------------------------------------------------------------- Total distributions (.51) - -------------------------------------------------------------------- Net asset value, end of period $9.67 - -------------------------------------------------------------------- Total investment return at net asset value (%)(a) 13.39 - -------------------------------------------------------------------- Net assets, end of period (in thousands) $1,549,128 - -------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) 1.20 - -------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) .27 - -------------------------------------------------------------------- Portfolio turnover (%) 44.17 - -------------------------------------------------------------------- Average commission rate paid (c) - -------------------------------------------------------------------- * Not annualized. (a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) The ratio of expenses to average net assets for the period ended July 31, 1996 and thereafter, includes amounts paid through brokerage services and expense offset arrangements. Prior period ratios exclude these amounts (Note 2). (c) Average commission rate paid on security trades is requried for fiscal periods beginning on or after september 1, 1995. (d) Per share net investment income (loss) has been determined on the basis of weighted average number of shares outstanding during the period.
Notes to financial statements January 31, 1997 (Unaudited) Note 1 Significant accounting policies The fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The fund invests primarily in common stocks of companies that Putnam Investment Management, Inc. ("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., believes have potential for capital appreciation significantly greater than that of the market averages. The fund offers class A, class B, class Y and class M shares. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class B shares, which convert to class A shares after eight years, do not pay a front-end sales charge but pay a higher ongoing distribution fee than class A shares, and may be subject to a contingent deferred sales charge, if those shares are redeemed within six years of purchase. Class M shares are sold with a maximum front end sales charge of 3.50% and pay an ongoing distribution fee that is higher than class A shares but lower than class B shares. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B and class M shares, but do not bear a distribution fee. Class Y shares are sold to defined contribution plans that invest at least $250 million in a combination of Putnam Funds and other accounts managed by affiliates of Putnam Management. Expenses of the fund are borne pro-rata by the holders of each class of shares, except that each class bears expenses unique to that class (including the distribution fees applicable to such class). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. Shares of each class would receive their pro-rata share of the net assets of the fund, if that fund were liquidated. In addition, the Trustees declare separate dividends on each class of shares. The following is a summary of significant accounting policies followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with generally accepted accounting principles and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates. A) Security valuation Investments for which market quotations are readily available are stated at market value, which is determined using the last reported sale price, or, if no sales are reported--as in the case of some securities traded over the counter--the last reported bid price. Short-term investments having remaining maturities of 60 days or less are stated at amortized cost, which approximates market value, and other investments are stated at fair value following procedures approved by the Trustees. B) Joint trading account Pursuant to an exemptive order issued by the Securities and Exchange Commission, the fund may transfer uninvested cash balances into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Management. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. C) Repurchase agreements The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. D) Security transactions and related investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the fund is informed of the ex-dividend date. E) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. F) Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Capital gain distributions, if any, are recorded on the ex-dividend date and paid annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. Note 2 Management fee, administrative services and other transactions Compensation of Putnam Management, for management and investment advisory services is paid quarterly based on the average net assets of the fund for the quarter. Such fee is based on the following annual rates: 0.70% of the first $500 million of average net assets, 0.60% of the next $500 million, 0.55% of the next $500 million, 0.50% of the next $5 billion, 0.475% of the next $5 billion, 0.455% of the next $5 billion, 0.44% of the next $5 billion, and 0.43% of any amount over $21.5 billion. The fund reimburses Putnam Management for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. Custodial functions for the fund's assets are provided by Putnam Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc. Investor servicing agent functions are provided by Putnam Investor Services, a division of PFTC. For the six months ended January 31, 1997, fund expenses were reduced by $1,555,585 under expense offset arrangements with PFTC and brokerage service arrangements. Investor servicing and custodian fees reported in the Statement of operations exclude these credits. The fund could have invested a portion of the assets utilized in connection with the expense offset arrangements in an income producing asset if it had not entered into such arrangements. Trustees of the fund receive an annual Trustees fee of $13,050 and an additional fee for each Trustee's meeting attended. Trustees who are not interested persons of Putnam Management and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. The fund has adopted a Trustee Fee Deferral Plan (the "Plan") which allows the Trustees to defer the receipt of all or a portion of Trustees Fees payable on or after July 1, 1995. The deferred fees remain in the fund and are invested in the fund or in other Putnam funds until distribution in accordance with the Plan. The fund has adopted an unfunded noncontributory defined benefit pension plan (the "Pension Plan") covering all Trustees of the fund who have served as Trustee for at least five years. Benefits under the Pension Plan are equal to 50% of the Trustee's average total retainer and meeting fees for the three years preceding retirement. Pension expense for the fund is included in Compensation of Trustees in the Statement of operations. Accrued pension liability is included in Payable for compensation of Trustees in the Statement of assets and liabilities. The fund has adopted distribution plans (the "Plans") with respect to its class A, class B and class M shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments, Inc., for services provided and expenses incurred by it in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets attributable to class A, class B and class M shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00% and 0.75% of the average net assets attributable to class A, class B and class M shares, respectively. For the six months ended January 31, 1997, Putnam Mutual Funds Corp., acting as underwriter received net commissions of $3,915,087 and $100,671 from the sale of class A and class M shares, respectively and received $2,529,858 in contingent deferred sales charges from redemptions of class B shares. A deferred sales charge of up to 1% is assessed on certain redemptions of class A shares. For the six months ended January 31, 1997, Putnam Mutual Funds Corp., acting as underwriter received $119,799 on class A redemptions. Note 3 Purchases and sales of securities During the six months ended January 31, 1997, purchases and sales of investment securities other than short-term investments aggregated $5,634,657,919 and $3,880,038,755, respectively. There were no purchases and sales of U.S. government obligations. In determining the net gain or loss on securities sold, the cost of securities has been determined on the identified cost basis. Note 4 Capital shares At January 31, 1997, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Six months ended January 31, 1997 - ------------------------------------------------------------ Class A Shares Amount - ------------------------------------------------------------ Shares sold 114,246,057 $1,931,723,478 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 32,563,055 527,847,147 - ------------------------------------------------------------ 146,809,112 2,459,570,625 Shares repurchased (66,291,055) (1,119,255,958) - ------------------------------------------------------------ Net increase 80,518,057 $1,340,314,667 - ------------------------------------------------------------ Year ended July 31, 1996 - ------------------------------------------------------------ Class A Shares Amount - ------------------------------------------------------------ Shares sold 195,466,332 $3,099,427,469 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 20,779,804 304,214,751 - ------------------------------------------------------------ 216,246,136 3,403,642,220 Shares repurchased (89,666,684) (1,411,912,865) - ------------------------------------------------------------ Net increase 126,579,452 $1,991,729,355 - ------------------------------------------------------------ Six months ended January 31, 1997 - ------------------------------------------------------------ Class B Shares Amount - ------------------------------------------------------------ Shares sold 60,475,495 $985,044,916 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 16,881,729 262,003,859 - ------------------------------------------------------------ 77,357,224 1,247,048,775 Shares repurchased (16,581,328) (270,101,233) - ------------------------------------------------------------ Net increase 60,775,896 $976,947,542 - ------------------------------------------------------------ Year ended July 31, 1996 - ------------------------------------------------------------ Class B Shares Amount - ------------------------------------------------------------ Shares sold 107,598,758 $1,654,943,119 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 8,896,693 125,976,810 - ------------------------------------------------------------ 116,495,451 1,780,919,929 Shares repurchased (25,142,718) (384,623,376) - ------------------------------------------------------------ Net increase 91,352,733 $1,396,296,553 - ------------------------------------------------------------ Six months ended January 31, 1997 - ------------------------------------------------------------ Class M Shares Amount - ------------------------------------------------------------ Shares sold 3,337,454 $56,257,061 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 474,248 7,602,194 - ------------------------------------------------------------ 3,811,702 63,859,255 Shares repurchased (837,759) (14,037,303) - ------------------------------------------------------------ Net increase 2,973,943 $49,821,952 - ------------------------------------------------------------ Year ended July 31, 1996 - ------------------------------------------------------------ Class M Shares Amount - ------------------------------------------------------------ Shares sold 4,921,187 $77,977,369 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 137,798 2,007,717 - ------------------------------------------------------------ 5,058,985 79,985,086 Shares repurchased (754,954) (11,970,795) - ------------------------------------------------------------ Net increase 4,304,031 $68,014,291 - ------------------------------------------------------------ Six months ended January 31, 1997 - ------------------------------------------------------------ Class Y Shares Amount - ------------------------------------------------------------ Shares sold 15,154,938 $252,916,807 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 3,185,764 52,119,075 - ------------------------------------------------------------ 18,340,702 305,035,882 Shares repurchased (6,672,943) (114,217,283) - ------------------------------------------------------------ Net increase 11,667,759 $190,818,599 - ------------------------------------------------------------ Year ended July 31, 1996 - ------------------------------------------------------------ Class Y Shares Amount - ------------------------------------------------------------ Shares sold 24,769,497 $410,764,510 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 1,540,741 22,695,086 - ------------------------------------------------------------ 26,310,238 433,459,596 Shares repurchased (5,830,909) (92,612,213) - ------------------------------------------------------------ Net increase 20,479,329 $340,847,383 - ------------------------------------------------------------ Note 5 Transactions with Affiliated Companies Transactions during the period with companies in which the fund owns at least 5% of the voting securities were as follows:
Purchase Sales Dividend Market Affiliates cost cost Income Value - ------------------------------------------------------------------------------------------------ Name of affiliate - ------------------------------------------------------------------------------------------------ Fulcrum Technologies $ -- $8,893,294 $ -- $ -- Lifecore Biomedical Inc. 256,375 -- -- 11,052,000 Preferred Networks Inc. -- 117,450 -- 4,661,150 Western Wireless Corp. Cl. -- 16,848,605 -- -- Westwood One Inc. 2,811,800 -- -- 37,277,500 Chancellor Broadcasting Cl. 3,370,439 -- -- 16,209,969 Evergreen Media Corp. 43,316,005 -- -- 55,248,200 Sipex Corp. 10,765,425 -- -- 13,797,525 Starbucks Corp. 42,328,759 -- -- 143,861,371 Petco Animal Supplies Inc. -- -- -- 20,967,814 - ------------------------------------------------------------------------------------------------ Totals $102,848,803 $25,859,349 $ -- $303,075,529
Results of February 6, 1997 shareholder meeting (Unaudited) An annual meeting of shareholders of the fund was held on February 6, 1997. At the meeting, each of the nominees for Trustees was elected, as follows: Votes Votes for withheld Jameson Adkins Baxter 428,486,176 23,185,214 Hans H. Estin 428,642,836 23,028,554 John A. Hill 428,798,989 22,872,401 R.J. Jackson 428,673,444 22,997,946 Elizabeth T. Kennan 428,117,233 23,554,157 Lawrence J. Lasser 428,871,481 22,799,909 Robert E. Patterson 428,912,852 22,758,538 Donald S. Perkins 428,495,702 23,175,688 William F. Pounds 428,721,965 22,949,425 George Putnam 428,557,970 23,113,420 George Putnam, III 428,496,177 23,175,213 Eli Shapiro 426,347,847 25,323,543 A.J.C. Smith 428,759,484 22,911,906 W. Nicholas Thorndike 428,301,158 23,370,232 A proposal to ratify the selection of Price Waterhouse LLP as auditors for the fund was approved as follows: 416,248,423 votes for, and 5,035,287 votes against, with 30,387,680 abstentions and broker non-votes. A proposal to amend the fund's fundamental investment restriction with respect to diversification was approved as follows: 353,100,261 votes for, and 34,181,513 votes against, with 64,389,616 abstentions and broker non-votes. A proposal to amend the fund's fundamental investment restriction with respect to investments in the securities of a single issuer was approved as follows: 340,283,256 votes for, and 41,987,100 votes against, with 69,401,034 abstentions and broker non-votes. A proposal to amend the fund's fundamental investment restriction with respect to making loans was approved as follows: 335,470,457 votes for, and 47,111,332 votes against, with 69,089,601 abstentions and broker non-votes. A proposal to amend the fund's fundamental investment restriction with respect to investments in real estate was approved as follows: 343,662,591 votes for, and 41,979,914 votes against, with 66,028,885 abstentions and broker non-votes. A proposal to amend the fund's fundamental investment restriction with respect to concentration of its assets was approved as follows: 348,054,921 votes for, and 36,272,864 votes against, with 67,343,605 abstentions and broker non-votes. A proposal to amend the fund's fundamental investment restriction with respect to investments in commodities was approved as follows: 342,605,784 votes for, and 41,868,779 votes against, with 67,196,827 abstentions and broker non-votes. A proposal to amend the fund's fundamental investment restriction with respect to underwriting was approved as follows: 341,185,678 votes for, and 40,221,660 votes against, with 70,264,052 abstentions and broker non-votes. A proposal to eliminate the fund's fundamental investment restriction with respect to investments in issuers that have been in operation for less than three years was approved as follows: 335,637,690 votes for, and 48,300,366 votes against, with 67,733,334 abstentions and broker non-votes. A proposal to eliminate the fund's fundamental investment restriction with respect to investments in securities of issuers in which management of the fund or Putnam Investment Management, Inc. owns securities was approved as follows: 334,464,234 votes for, and 49,063,327 votes against, with 68,143,829 abstentions and broker non-votes. A proposal to eliminate the fund's fundamental investment restriction with respect to margin transactions was approved as follows: 322,384,904 votes for, and 59,968,129 votes against, with 69,318,357 abstentions and broker non-votes. A proposal to eliminate the fund's fundamental investment restriction with respect to short sales was approved as follows: 326,154,850 votes for, and 56,131,999 votes against, with 69,384,541 abstentions and broker non-votes. A proposal to eliminate the fund's fundamental investment restriction with respect to investments in illiquid securities was approved as follows: 322,755,429 votes for, and 58,623,173 votes against, with 70,292,788 abstentions and broker non-votes. A proposal to eliminate the fund's fundamental investment restriction with respect to investments in certain oil, gas an mineral interests was approved as follows: 339,657,043 votes for, and 45,674,413 votes against, with 66,339,934 abstentions and broker non-votes. A proposal to eliminate the fund's fundamental investment restriction with respect to investing to gain control of a company's management was approved as follows: 335,135,121 votes for, and 47,896,127 votes against, with 68,640,142 abstentions and broker non-votes. All tabulations are rounded to nearest whole number. Fund information INVESTMENT MANAGER Putnam Investment Management, Inc. One Post Office Square Boston, MA 02109 MARKETING SERVICES Putnam Mutual Funds Corp. One Post Office Square Boston, MA 02109 CUSTODIAN Putnam Fiduciary Trust Company LEGAL COUNSEL Ropes & Gray TRUSTEES George Putnam, Chairman William F. Pounds, Vice Chairman Jameson Adkins Baxter Hans H. Estin John A. Hill Ronald J. Jackson Elizabeth T. Kennan Lawrence J. Lasser Robert E. Patterson Donald S. Perkins George Putnam, III Eli Shapiro A.J.C. Smith W. Nicholas Thorndike OFFICERS George Putnam President Charles E. Porter Executive Vice President Patricia C. Flaherty Senior Vice President John D. Hughes Senior Vice President and Treasurer Lawrence J. Lasser Vice President Gordon H. Silver Vice President Peter Carman Vice President Brett C. Browchuk Vice President John J. Morgan, Jr. Vice President Daniel L. Miller Vice President Roland W. Gillis Vice President and Fund Manager Charles H. Swanberg Vice President and Fund Manager Robert R. Beck Vice President and Fund Manager William N. Shiebler Vice President John R. Verani Vice President Paul M. O'Neil Vice President Beverly Marcus Clerk and Assistant Treasurer This report is for the information of shareholders of Putnam Voyager Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, which gives details of sales charges, investment objectives, and operating policies of the fund, and the most recent copy of Putnam's Quarterly Performance Summary. For more information, or to request a prospectus, call toll free: 1-800-225-1581. You can also learn more at Putnam Investments' website: http://www.putnaminv.com. Shares of mutual funds are not deposits or obligations of, or guaranteed or endorsed by, any financial institution, are not insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board or any other agency, and involve risk, including the possible loss of principal amount invested. [LOGO OMITTED] PUTNAM INVESTMENTS The Putnam Funds One Post Office Square Boston, Massachusetts 02109 - -------------------- Bulk Rate U.S. Postage PAID Putnam Investments - -------------------- 31263-007/883/530 3/97 PUTNAM INVESTMENTS [SCALE LOGO OMITTED] - ------------------------------------------------------------------------ Putnam Voyager Fund Supplement to Semiannual Report dated January 31, 1997 The following information has been prepared to provide class Y shareholders with a performance overview specific to their holdings. Class Y shares are offered exclusively to defined contribution plans investing $250 million or more in one or more of Putnam's funds or private accounts. Performance of class Y shares, which incur neither a front-end load, distribution fee, nor contingent deferred sales charge, will differ from performance of class A and B shares, which are discussed more extensively in the annual report. FISCAL 1997 SEMIANNUAL RESULTS AT A GLANCE - ------------------------------------------------------------------------ 4/1/94 to 1/31/97 Inception date to end of semiannual fiscal period 22.60% 1/31/96 to 1/31/97 One year period 16.90 8/31/96 to 1/31/97 Semiannual fiscal period 14.32% - ------------------------------------------------------------------------ Share value NAV 4/1/94 (Inception date) $11.24 7/31/96 $15.85 1/31/97 $16.99 - ------------------------------------------------------------------------ Distributions No. Income Capital gains Total Long-term 8/31/96 to 1/31/97 1 $0.000 $1.088 $1.088 - ------------------------------------------------------------------------ Please note that past performance does not indicate future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. See full Annual Report for information on comparative benchmarks. If you have questions, please consult your fund prospectus or call Putnam toll free at 1-800-752-9894. -----END PRIVACY-ENHANCED MESSAGE-----