-----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, OXuJtIWG9V/7TC7B64Z8wtAc/qBzYdD9m69TQ+ZIuObg9am+TUFkZWQPU6O/xPnJ hnDbnw7dz0WEteEJ7E+Jrg== 0000928816-97-000314.txt : 19970929 0000928816-97-000314.hdr.sgml : 19970929 ACCESSION NUMBER: 0000928816-97-000314 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970731 FILED AS OF DATE: 19970926 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: SEC FILE NUMBER: 811-01682 FILM NUMBER: 97686071 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 ANNUAL REPORT July 31, 1997 [LOGO: BOSTON * LONDON * TOKYO] Fund highlights *"The fund's team chooses companies that they think can beat earnings estimates, but also offer reasonable valuations compared with their industries and their own trading histories. That aspect has helped offset some of the trading volatility in growth stocks, earning the fund solid historical risk scores." -- Morningstar, Inc., May 23, 1997 *"When blue-chips soared, stocks of small companies sagged. But when the smoke clears and the next market cycle takes over, the small caps may finally have their day." -- Forbes, May 5, 1997 CONTENTS 4 Report from Putnam Management 9 Fund performance summary 13 Portfolio holdings 24 Financial statements From the Chairman [GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM] [copyright] Karsh, Ottawa Dear Shareholder: As the market's strength continued throughout much of Putnam Voyager Fund's fiscal year, your fund's diversified search for growth worked both for it and against it. Buoyed by the strength of its large-capitalization stock holdings, your fund delivered attractive results despite the struggle on the part of its small- and mid-cap holdings. For much of the 12-month period ended July 31, 1997, these stocks were under pressure as investors sought the stability of large-cap stocks. However, as the fiscal year drew to a close, the relatively undervalued stocks of small and medium-size companies were clearly showing signs of gathering strength. Your fund's managers, Roland Gillis, Charles Swanberg, and Robert Beck, believe all the pieces are now in place for the stocks of smaller high-growth companies to begin a recovery, and they have positioned the portfolio to take what they believe will be maximum advantage of such an environment. The following report explains the strategy they pursued during the fiscal year, provides some forecast of what fiscal 1998 may bring, and profiles several companies they consider especially attractive in each sector of the portfolio. Respectfully yours, /S/GEORGE PUTNAM George Putnam Chairman of the Trustees September 18, 1997 Report from the Fund Managers Roland W. Gillis Charles H. Swanberg Robert R. Beck The stock market's significant climb during the fiscal year ended July 31, 1997, impressed even the most pessimistic economic naysayers. Driven by continued economic growth and low inflation, the widely followed Dow Jones Industrial Average climbed from one new high to another. Large-capitalization stocks were steady performers throughout the period, with small- and medium-cap stocks joining the rally by mid spring. With approximately one third of the fund's assets invested in each of these market sectors, Putnam Voyager Fund produced total returns in excess of 30% for all three share classes at net asset value for the 12-month period. These returns, however, fell short of the return on Standard & Poor's 500(registered trademark) Index, which comprises only the heavily favored large-company stocks. Complete performance information appears on pages 9 and 10. * RECORD-SETTING PACE ON WALL STREET The fund's fiscal year saw a continuation of one of the most impressive bull markets in history. The Dow Jones Industrial Average passed the milestone 6000 mark in October and topped 7000 in February. Five months later -- just before the close of the fund's fiscal period -- this market indicator crossed the 8000 barrier. In addition, the technology-laden NASDAQ Composite Index surged up almost one third during the last fiscal quarter. Stock investors were clearly pleased with the breadth and pace of economic growth. Two factors fueling the rise in stock prices were corporate profits and low inflation -- both of which exceeded most expectations. In addition, a forward-looking Federal Reserve Board, with Chairman Alan Greenspan at its helm, has been fostering steady growth while remaining vigilant for warning signs of inflation. The Fed's short-term interest rate increase on March 25 was a temporary bump as investors acknowledged that this near-term adjustment was necessary to keep the economy robust over the longer term. The stock market's rally was further strengthened by Washington's summer deficit reduction package, which included a decrease in the capital gains tax. Given such a rapid advance in such a short time, Greenspan has warned about "excessive optimism" and "irrational exuberance" on several occasions. Such advice is worth heeding, and we ask our shareholders to temper their expectations accordingly in this prolonged rally. * CAPTURING MOMENTUM OF LARGE-CAP STOCKS For the first three quarters of the fiscal year, large-cap stocks outperformed their small and medium-sized counterparts. The economy's strong performance in late 1996 and early 1997, while favorable for corporate profits, raised fears of inflation and a potential interest-rate increase by the Fed -- an event that encouraged investors to seek the security of large-company stocks. The fund's large-cap holdings are solid leaders in their respective industries, each characterized by a catalyst -- a driving factor that seems likely to boost the price of a stock within a reasonable period of time. Such a catalyst might be a new product, restructuring, or management rejuvenation. American Express Co., one of the fund's top holdings, exemplifies this strategy. In addition to its growing worldwide business and greater distribution fees, American Express is also expected to benefit from a reorganization of some of its business units in an effort to streamline operations. While these and other holdings were viewed favorably as of July 31, 1997, there is no guarantee the fund will continue to hold these securities in the future. [GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS] TOP INDUSTRY SECTORS* Computer software 10.1% Retail 10.0% Pharmaceuticals and biotechnology 5.7% Business services 5.0% Electronics and electronic equipment 4.6% Footnote reads: *Based on net assets as of 7/31/97. Holdings will vary over time. * SMALLER CAPS BOLSTERED BY LOW INFLATION AND CAPITAL GAINS TAX REDUCTION By late spring, with the outlook for inflation and growth moderating, investor enthusiasm for smaller companies began to return, and prices rebounded from their April lows. We remain optimistic about this universe for several reasons. First, a less robust economy could dampen the earnings outlook for large-cap stocks, which are dependent on the overall trends in the economy. Smaller-cap stocks -- technology stocks in particular -- are dependent to a greater extent on product cycles and the desire on the part of their customers to increase productivity. Second, the relative value of small-cap stocks is attractive and their earnings growth rates tend to be greater than those of large-cap stocks. It seems reasonable to expect that the federal budget agreement, with its reduction in the capital gains tax, will further support these prices. Finally, history has shown that smaller-company stocks experience a rise in prices as the market factors in an improving after-tax return for these growth stocks. * TECHNOLOGY HOLDINGS STRENGTHEN LATE IN PERIOD Although volatility throughout the technology sector continued well into the second half of the fiscal year, many of the fund's holdings in this area nevertheless proved profitable. Baan Company, which provides business management software to more than 2,300 companies, is experiencing strong revenues as a result of larger deals, growing software licenses, and improvements in its pricing structure. America Online (AOL) was another strong contributor to performance. While AOL was hurt by increased network and equipment costs, it benefited from a growing number of subscribers and increased advertising revenues. Our decision to increase the weighting of the semiconductor-related stocks proved advantageous over the past six months. These holdings are concentrated in analog or mixed-signal suppliers, including Linear Technology, Maxim Integrated Products, and Sipex Corp. The fund also has a notable exposure to semiconductor equipment stocks. The ever-increasing complexity of manufacturing integrated circuits has driven a strong capital spending cycle in the equipment segment. Telecommunications equipment holdings are benefiting from a global boom in industry spending. There are several factors that bode well for this industry's future, including deregulation, the growth in new wireless systems, and the surge in the use of the Internet. TOP 10 HOLDINGS Computer Associates Intl., Inc. Computer software American Express Co. Finance Costco Companies, Inc. Retail EMC Corp. Computer services Compuware Corp. Computer software Federal Home Loan Mortgage Corp. Finance Linear Technology Corp. Semiconductors Clear Channel Communications, Inc. Broadcasting Citicorp Banks Microsoft Corp. Computer software Footnote reads: These holdings represent 13.2% of the fund's net assets as of 7/31/97. Portfolio holdings will vary over time. * SOLID ECONOMIC GROWTH BENEFITS CONSUMER, FINANCIAL AND HEALTH-CARE SECTORS Consumer cyclical stocks, which include companies whose profits are tied to the strength of the economy, were big winners during the year. Retailing stocks have enjoyed a steady comeback, with Dayton Hudson Corp. and Payless Shoesource, Inc. among the better performers. Higher employment and consumer confidence levels coupled with downsizing and consolidations by many department stores have resulted in well-managed inventory levels and improving profit margins. The fund's oil and gas stocks were led by the oil services companies, such as Halliburton and Schlumberger. Our heavy weighting in financial stocks was also a big contributor to performance. This sector experienced a setback in the weeks leading up to the Fed's rate increase in March. Financial stocks are typically interest-rate sensitive, since higher interest rates can pinch profits. However, this sector resumed its climb as it became apparent that evidence of real inflation -- generally a precursor of higher interest rates -- was nonexistent. Money center banks were among the portfolio's best performing financial stocks, with holdings such as Citicorp, BankAmerica, Banc One, and NationsBank climbing substantially by the close of the fiscal year. Global growth strategies, mergers, and cost savings arising out of technologically driven productivity gains have benefited this industry tremendously, as has baby boomers' increasing focus on investing for retirement. A presence in several subsectors within the health-care industries -- pharmaceuticals, medical equipment and supplies, and information systems -- also contributed to the fund's performance. Warner-Lambert Co. and Eli Lilly and Co. stand out in this industry. * SMALL AND MIDSIZE COMPANIES MAY HAVE THEIR DAY Just following the close of the fiscal period, investor sentiment for large, blue-chip stocks turned negative in the wake of a series of disappointing earnings reports. As investors re-evaluate their large-cap holdings, we believe they may turn to smaller companies as their earnings growth rates become more attractive. The average small-cap stock in your fund carries an earnings growth rate of over 30%, which is 3 to 4 times the anticipated earnings growth rate for the overall stock market in 1998. Given the fund's ability to select companies of all sizes, however, we believe the portfolio is well positioned for longer-term capital appreciation in relation to the overall market. 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 7/31/97, there is no guarantee the fund will continue to hold these securities in the future. The fund invests all or a portion of its assets in small to medium-size companies. Such investments increase the risk of greater price fluctuations. Performance summary This section provides information about your fund's performance, which should always be considered in light of its investment strategy. Putnam Voyager Fund is designed for investors seeking aggressive capital appreciation primarily through common stocks. TOTAL RETURN FOR PERIODS ENDED 7/31/97 Class A Class B Class M (inception date) (4/1/69) (4/27/92) (12/1/94) NAV POP NAV CDSC NAV POP - ------------------------------------------------------------------------------ 1 year 32.22% 24.62% 31.17% 26.17% 31.57% 26.93% - ------------------------------------------------------------------------------ 5 years 159.73 144.80 150.13 148.13 153.28 144.52 Annual average 21.03 19.61 20.12 19.93 20.43 19.58 - ------------------------------------------------------------------------------ 10 years 355.73 329.59 318.77 318.77 330.84 315.77 Annual average 16.38 15.69 15.40 15.40 15.73 15.31 - ------------------------------------------------------------------------------ COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 7/31/97 Standard & Poors Consumer 500 Index Price Index - ------------------------------------------------------------------------------ 1 year 52.11% 2.23% - ------------------------------------------------------------------------------ 5 years 155.27 14.23 Annual average 20.62 2.70 - ------------------------------------------------------------------------------ 10 years 302.62 41.04 Annual average 14.94 3.50 - ------------------------------------------------------------------------------ Returns for class A and class M shares reflect the current maximum initial sales charges of 5.75% for class A shares and 3.50% for class M shares. One-, five-, and ten-year returns for class B shares reflect the applicable contingent deferred sales charges (CDSC), which is 5% in the first year, declines to 1% in the sixth year, and is eliminated thereafter. Returns shown for class B and class M shares for periods prior to their inception are derived from the historical performance of class A shares, adjusted to reflect both the initial sales charge or CDSC, if any, currently applicable to each class and in the case of class B and class M shares, the higher operating expenses are applicable to such shares. All returns assume reinvestment of distributions at NAV and represent past performance; they do not guarantee future results. Investment return and principal value will fluctuate so that an investor's shares when redeemed may be worth more or less than their original cost. [GRAPHIC OMITTED: line chart GROWTH OF A $10,000 INVESTMENT] GROWTH OF A $10,000 INVESTMENT Cumulative total return of a $10,000 investment since 7/31/87 Fund's Consumer class A shares S&P 500 Price at POP Index Index 7/31/87 9425 10000 10000 7/31/88 8459 8832 10413 7/31/89 11216 11650 10931 7/31/90 11754 12402 11459 7/31/91 14580 13989 11968 7/31/92 16532 15773 12346 7/31/93 19787 17129 12689 7/31/94 20873 18013 13040 7/31/95 28120 22709 13401 7/31/96 32476 26468 13796 7/31/97 42959 40262 14104 Footnote reads: Past performance is no assurance of future results. At the end of the same time period, a $10,000 investment in the fund's class B shares would have been valued at $41,877 and no contingent deferred sales charges would apply; a $10,000 investment in the fund's class M shares would have been valued at $43,084 ($41,577 at public offering price). See first page of performance section for performance calculation method. PRICE AND DISTRIBUTION INFORMATION 12 months ended 7/31/97 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 - ------------------------------------------------------------------------------ 6/31/97 19.49 20.68 18.57 19.22 19.92 - ------------------------------------------------------------------------------ TOTAL RETURN FOR PERIODS ENDED 6/30/97 (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 - ------------------------------------------------------------------------------ 1 year 12.34% 5.89% 11.50% 6.50% 11.77% 7.88% - ------------------------------------------------------------------------------ 5 years 147.40 133.18 138.02 136.02 141.30 132.92 Annual average 19.86 18.45 18.94 18.74 19.26 18.42 - ------------------------------------------------------------------------------ 10 years 337.80 312.62 302.60 302.60 313.65 299.40 Annual average 15.91 15.23 14.94 14.94 15.26 14.85 - ------------------------------------------------------------------------------ Performance data represent past results, do not reflect future performance, and will differ for each share class. 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. See first page of performance section for performance calculation method. TERMS AND DEFINITIONS 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. 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 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. Report of independent accountants To the Trustees and Shareholders of Putnam Voyager Fund In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments owned, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Putnam Voyager Fund (the "fund") at July 31, 1997, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments owned at July 31, 1997 by correspondence with the custodian and the application of alternative auditing procedures where investments purchased were not yet received by the custodian, provide a reasonable basis for the opinion expressed above. Price Waterhouse LLP Boston, Massachusetts September 16, 1997 Portfolio of investments owned July 31, 1997
COMMON STOCKS (98.7%) * NUMBER OF SHARES VALUE Advertising (1.3%) - ------------------------------------------------------------------------------------------------------------ 807,221 Lamar Advertising Co. + $ 22,551,737 1,628,797 Omnicom Group, Inc. 113,710,391 2,544,621 Outdoor Systems, Inc. + 67,432,457 465,645 TMP Worldwide Inc. + [SECTION MARK] 11,291,891 649,275 Universal Outdoor Holdings, Inc. + 23,617,378 ---------------- 238,603,854 Aerospace and Defense (0.6%) - ------------------------------------------------------------------------------------------------------------ 577,300 Boeing Co. 33,952,456 250,000 Lockheed Martin Corp. 26,625,000 428,400 Northrop Grumman Corp. 49,319,550 ---------------- 109,897,006 Agriculture (0.1%) - ------------------------------------------------------------------------------------------------------------ 228,500 Delta & Pine Land Co. 8,683,000 Alcoholic Beverages (0.4%) - ------------------------------------------------------------------------------------------------------------ 2,050,000 Seagram Co., Ltd. 78,540,625 Apparel (0.5%) - ------------------------------------------------------------------------------------------------------------ 1,181,369 Gucci Group N.V. (Netherlands) + 74,573,918 450,902 The Men's Wearhouse, Inc. + 16,683,374 ---------------- 91,257,292 Automotive (0.7%) - ------------------------------------------------------------------------------------------------------------ 1,625,000 Echlin, Inc. 60,226,563 1,800,000 Snap-On Inc. 74,250,000 ---------------- 134,476,563 Banks (4.2%) - ------------------------------------------------------------------------------------------------------------ 1,450,000 Banc One Corp. 81,381,250 2,400,000 BankAmerica Corp. 181,200,000 200,000 Barnett Banks, Inc. 11,387,500 1,400,000 Citicorp 190,050,000 869,200 Fifth Third Bancorp 54,922,575 1,860,000 NationsBank Corp. 132,408,750 1,638,300 Washington Mutual, Inc. 113,247,488 ---------------- 764,597,563 Basic Industrial Products (0.8%) - ------------------------------------------------------------------------------------------------------------ 1,331,000 American Standard Companies, Inc. + 66,134,063 295,000 Cooper Industries, Inc. 16,390,938 1,350,000 General Signal Corp. 66,403,125 ---------------- 148,928,126 Broadcasting (2.7%) - ------------------------------------------------------------------------------------------------------------ 563,825 Chancellor Broadcasting Corp. Class A + [SECTION MARK] 23,257,781 3,099,853 Clear Channel Communications, Inc. + 192,965,849 1,782,200 Evergreen Media Corp. Class A + [SECTION MARK] 81,981,200 79,800 Heftel Broadcasting Corp. Class A + 4,668,300 649,988 Jacor Communications, Inc. + 27,868,236 416,620 LIN Television Corp. + 20,049,838 546,500 ProSieben Media AG 144A (Germany) + 24,354,891 165,540 SFX Broadcasting, Inc. Class A + 9,704,783 573,907 Sinclair Broadcast Group, Inc. Class A + 19,943,268 477,800 Univision Communications Inc. Class A + 20,545,400 2,015,000 Westwood One, Inc. + [SECTION MARK] 64,731,875 218,600 Young Broadcasting Corp. Class A + 6,721,950 ---------------- 496,793,371 Building Products (0.3%) - ------------------------------------------------------------------------------------------------------------ 1,250,000 Masco Corp. 58,593,750 Business Services (5.0%) - ------------------------------------------------------------------------------------------------------------ 308,869 Abacus Direct Corp. + 9,266,070 730,836 Accustaff, Inc. + 19,915,281 616,545 Affiliated Computer Services, Inc. Class A + 16,723,783 3,106,723 Airgas, Inc. + 61,357,779 56,700 Caribiner Intl., Inc. + 2,062,463 413,800 Cintas Corp. 27,103,900 1,375,024 Corestaff, Inc. + 42,625,744 5,201,770 Corporate Express, Inc. + 78,026,550 2,562,400 Deluxe Corp. 85,359,950 1,150,411 Gartner Group Inc. Class A + 32,642,912 687,263 Interim Services Inc. + 31,313,420 2,251,547 Interpublic Group of Cos., Inc. 100,756,728 582,800 Metromedia International Group, Inc. + 6,556,500 659,566 Paychex, Inc. 26,629,977 404,325 Pharmaceutical Product Development, Inc. + 9,451,097 492,300 Precision Response Corp. + 5,599,913 30,054,960 Rentokil Initial PLC (United Kingdom) 107,199,505 350,000 Reuters Holdings PLC ADR (United Kingdom) 22,618,750 2,588,824 Robert Half International, Inc. + 142,547,122 840,000 Select Appointments Holdings PLC ADR (United Kingdom) 14,700,000 1,958,073 Serco Group PLC (United Kingdom) + 23,360,344 72,700 Snyder Communications, Inc. + 2,253,700 778,600 Teletech Holdings, Inc. + 15,572,000 328,994 The Registry, Inc. + 16,655,321 ---------------- 900,298,809 Cable Television (1.2%) - ------------------------------------------------------------------------------------------------------------ 1,200,000 Tele-Comm Liberty Media Group, Inc. Class A + 30,675,000 10,805,300 Tele-Communications, Inc. Class A + 185,040,763 ---------------- 215,715,763 Chemicals (1.7%) - ------------------------------------------------------------------------------------------------------------ 750,000 Air Products & Chemicals, Inc. 66,140,625 650,000 Great Lakes Chemical Corp. 32,540,625 1,200,000 Praxair, Inc. 66,150,000 1,175,000 Raychem Corp. 113,975,000 650,000 Witco Chemical Corp. 29,656,250 ---------------- 308,462,500 Computer Equipment (0.5%) - ------------------------------------------------------------------------------------------------------------ 1,645,139 Newbridge Networks Corp. (Canada) 85,752,870 28,000 PMC -- Sierra, Inc. + 917,000 285,788 Western Digital Corp. + 11,002,838 ---------------- 97,672,708 Computer Services (4.1%) - ------------------------------------------------------------------------------------------------------------ 2,568,938 America Online, Inc. + 173,403,315 429,200 CBT Group PLC ADR (Ireland) + 28,434,500 4,772,973 EMC Corp. + 241,035,137 431,900 Galileo International, Inc. + 11,391,363 1,404,200 Getronics Electric N.V. (Netherlands) 48,778,116 817,940 IDT Corp. + 6,850,248 1,734,004 Keane, Inc. + 105,990,995 900,000 NCR Corp. + 28,856,250 2,616,292 Sterling Commerce, Inc. + 98,601,505 93,600 Transaction Systems Architects, Inc. Class A + 3,463,200 105,100 Whittman-Hart, Inc. + 2,706,325 ---------------- 749,510,954 Computer Software (10.1%) - ------------------------------------------------------------------------------------------------------------ 309,065 Arbor Software Corp. + 13,289,795 1,328,378 Baan Co., N.V. (Netherlands) + 91,658,082 2,454,214 BMC Software, Inc. + 147,866,394 920,393 Cadence Design Systems, Inc. + 40,899,964 646,327 Citrix Systems, Inc. + 30,619,742 5,159,094 Computer Associates Intl., Inc. 351,140,835 3,782,515 Compuware Corp. + 234,043,116 437,732 Documentum, Inc. + 14,499,873 2,590,443 Electronic Arts, Inc. + 86,779,841 2,092,948 Electronics for Imaging, Inc. + 115,112,140 731,300 Geoworks + [SECTION MARK] 7,084,469 300,836 HNC Software, Inc. + 10,566,865 222,700 Information Management Resources, Inc. 7,015,050 630,200 Lernout & Hauspie Speech Products N.V. (Belgium) + 19,536,200 757,350 McAfee Associates, Inc. + 49,369,753 1,330,481 Microsoft Corp. + 188,263,062 3,542,779 Parametric Technology Corp. + 173,596,171 1,132,100 PeopleSoft, Inc. + 66,227,850 899,805 Security Dynamics Technologies, Inc. + 37,566,859 2,291,000 SEMA Group PLC (United Kingdom) 52,598,153 1,049,838 Synopsys, Inc. + 35,300,803 878,200 Vantive Corp. + 27,443,750 302,423 Viasoft, Inc. + 18,296,592 ---------------- 1,818,775,359 Consumer Products (0.5%) - ------------------------------------------------------------------------------------------------------------ 1,673,800 Kimberly-Clark Corp. 84,840,738 Consumer Services (0.5%) - ------------------------------------------------------------------------------------------------------------ 3,448,500 CUC International, Inc. + 84,919,313 25,100 Sabre Group Holdings, Inc. + 740,450 ---------------- 85,659,763 Containers (0.1%) - ------------------------------------------------------------------------------------------------------------ 350,000 Temple Inland, Inc. 23,559,375 Cosmetics (--%) - ------------------------------------------------------------------------------------------------------------ 403,464 ThermoLase Corp. + 5,875,445 Education Services (0.5%) - ------------------------------------------------------------------------------------------------------------ 525,172 Apollo Group, Inc. Class A + 19,497,011 1,000,244 DeVry, Inc. + 29,382,168 408,300 Learning Tree International, Inc. + 16,638,225 484,529 Sylvan Learning Systems, Inc. + 18,896,631 ---------------- 84,414,035 Electric Utilities (0.4%) - ------------------------------------------------------------------------------------------------------------ 1,774,687 CalEnergy, Inc. + 71,542,070 Electronics and Electrical Equipment (4.6%) - ------------------------------------------------------------------------------------------------------------ 1,855,581 Applied Materials, Inc. + 170,481,504 1,000,000 General Electric Co. 70,187,500 1,879,000 Hewlett-Packard Co. 131,647,438 222,550 Microchip Technology, Inc. + 8,289,988 1,786,100 Motorola, Inc. 143,446,156 413,400 Sipex Corp. + [SECTION MARK] 19,223,100 730,965 Solectron Corp. + 57,654,864 1,557,680 Thermo Instrument Systems, Inc. + 56,660,610 7,513,425 Westinghouse Electric Corp. 180,791,789 ---------------- 838,382,949 Energy-Related (0.9%) - ------------------------------------------------------------------------------------------------------------ 352,677 AES Corp. + 27,861,483 4,732,055 Thermo Electron Corp. + 161,777,130 ---------------- 189,638,613 Environmental Control (1.3%) - ------------------------------------------------------------------------------------------------------------ 1,300,000 Browning-Ferris Industries, Inc. 48,100,000 515,900 Memtec Ltd. ADR (Australia) 14,187,250 1,582,353 Philip Services Corp. (Canada) + 23,537,501 3,440,431 Republic Industries, Inc. + 84,720,613 225,300 United Waste Systems, Inc. + 9,631,575 1,345,653 USA Waste Services, Inc. + 54,246,637 ---------------- 234,423,576 Finance (4.6%) - ------------------------------------------------------------------------------------------------------------ 3,912,110 American Express Co. 327,639,213 5,533,627 Federal Home Loan Mortgage Corp. 199,556,424 3,822,860 Federal National Mortgage Association 180,869,064 333,400 Morgan Stanley, Dean Witter, Discover and Co. 17,440,988 208,300 Student Loan Marketing Assn. 31,231,981 1,260,482 TCF Financial Corp. 67,514,567 ---------------- 824,252,237 Financial Services (1.7%) - ------------------------------------------------------------------------------------------------------------ 1,250,100 Associates First Capital Corp. 82,428,469 479,718 Concord EFS, Inc. + 14,121,699 304,302 First USA Paymentech, Inc. + 8,748,683 599,684 FIRSTPLUS Financial Group, Inc. + 27,360,583 3,605,303 MBNA Corp. 162,238,635 553,644 Southern Pacific Funding Corp. + 9,481,154 ---------------- 304,379,223 Food and Beverages (1.5%) - ------------------------------------------------------------------------------------------------------------ 2,837,500 Archer Daniels Midland Co. 63,843,750 3,200,000 PepsiCo, Inc. 122,600,000 1,350,000 Sara Lee Corp. 59,146,875 875,000 Whitman Corp. 22,093,750 ---------------- 267,684,375 Gas Pipelines (0.5%) - ------------------------------------------------------------------------------------------------------------ 710,700 El Paso Natural Gas Co. 41,087,344 904,500 Sonat, Inc. 45,111,938 ---------------- 86,199,282 Gas Utilities (0.6%) - ------------------------------------------------------------------------------------------------------------ 1,500,000 Columbia Gas System, Inc. 103,125,000 Health Care Information Systems (0.5%) - ------------------------------------------------------------------------------------------------------------ 1,081,479 HBO & Co. 83,679,438 Health Care Services (1.8%) - ------------------------------------------------------------------------------------------------------------ 611,293 ABR Information Services, Inc. + 16,657,734 438,200 CareMatrix Corp. + 11,064,550 2,316,200 HEALTHSOUTH Corp. + 61,379,300 1,698,355 MedPartners, Inc. + 40,335,931 775,572 Renal Treatment Centers, Inc. + 22,879,374 103,300 Rotech Medical Corp. + 1,951,402 545,700 Total Renal Care Holdings, Inc. + 22,510,125 2,725,839 United Healthcare Corp. 155,372,823 ---------------- 332,151,239 Hospital Management (0.4%) - ------------------------------------------------------------------------------------------------------------ 2,383,797 Health Management Assoc., Inc. + 76,132,533 Household Products (0.7%) - ------------------------------------------------------------------------------------------------------------ 1,677,450 Blyth Industries, Inc. + 60,283,359 2,110,500 Tupperware Corp. 73,339,875 ---------------- 133,623,234 Insurance (2.5%) - ------------------------------------------------------------------------------------------------------------ 950,000 Aetna Inc. 108,240,625 600,000 AFLAC Inc. 33,450,000 1,773,200 American General Corp. 94,422,900 562,500 American International Group, Inc. 59,906,250 585,200 AON Corp. 32,771,200 264,000 CIGNA Corp. 52,668,000 633,700 Conseco Inc. 25,823,275 516,464 HCC Insurance Holdings, Inc. 16,300,895 1,000,000 USF&G Corp. 24,562,500 ---------------- 448,145,645 Leisure (0.4%) - ------------------------------------------------------------------------------------------------------------ 1,046,180 Adidas AG 144A ADS (Germany) 61,201,530 92,400 Signature Resorts, Inc. + 3,557,400 ---------------- 64,758,930 Lodging (1.3%) - ------------------------------------------------------------------------------------------------------------ 777,000 Doubletree Corp. + 32,634,000 1,973,392 Extended Stay America, Inc. + 31,820,946 1,726,799 HFS, Inc. + 100,586,042 1,392,800 Prime Hospitality Corp. + 25,592,700 980,912 Promus Hotel Corp. + 38,562,103 ---------------- 229,195,791 Medical Management Services (0.6%) - ------------------------------------------------------------------------------------------------------------ 105,200 NCS HealthCare, Inc. Class A + 2,958,750 391,300 OccuSystems, Inc. + 11,152,050 2,787,342 Phycor, Inc. + 93,375,957 84,349 Sunrise Assisted Living, Inc. + 3,047,108 ---------------- 110,533,865 Medical Supplies and Devices (3.5%) - ------------------------------------------------------------------------------------------------------------ 896,900 Bard (C.R.), Inc. 33,745,863 796,247 Cytyc Corp. + 18,612,274 414,200 Henry Schein, Inc. + 15,325,400 2,012,150 Johnson & Johnson 125,382,097 614,000 Lifecore Biomedical, Inc. + [SECTION MARK] 8,289,000 368,467 Medtronic, Inc. 32,148,746 410,000 Minimed, Inc. + 12,505,000 821,444 Omnicare, Inc. 24,181,258 560,517 Physician Sales & Service, Inc. + 10,369,565 3,887,587 Stryker Corp. 151,615,893 336,700 Sybron International Corp. + 13,783,656 2,126,125 Thermo Cardiosystems, Inc. + 42,256,734 399,050 Thermotrex Corp. + 9,103,328 31,285 Trex Medical Corp. + 393,018 1,155,192 Tyco International Ltd. 93,570,552 1,000,000 U.S. Surgical Corp. 37,125,000 ---------------- 628,407,384 Metals and Mining (0.3%) - ------------------------------------------------------------------------------------------------------------ 110,600 Freeport-McMoRan Copper & Gold Co., Inc. Class A 3,013,850 786,600 Miller Industries, Inc./Tennessee + 13,273,875 234,560 SGL Carbon AG (Germany) 31,168,435 ---------------- 47,456,160 Networking Equipment (0.9%) - ------------------------------------------------------------------------------------------------------------ 2,115,833 Cisco Systems, Inc. + 168,340,963 Nursing Homes (0.3%) - ------------------------------------------------------------------------------------------------------------ 1,390,800 Health Care & Retirement Corp. + 49,721,100 Office Equipment (1.1%) - ------------------------------------------------------------------------------------------------------------ 4,922,663 Viking Office Products, Inc. + 98,760,926 1,250,000 Xerox Corp. 102,812,500 ---------------- 201,573,426 Oil and Gas (3.4%) - ------------------------------------------------------------------------------------------------------------ 1,019,252 British Petroleum PLC ADR (United Kingdom) 84,024,587 423,600 Ente Nazionale Idrocarburi S.P.A. (ENI) ADR (Italy) 24,912,975 796,000 Exxon Corp. 51,143,000 2,050,000 Halliburton Co. 94,300,000 2,000,000 Mobil Corp. 153,000,000 1,150,000 Schlumberger Ltd. 87,831,250 2,548,900 Total Corp. ADR (France) 128,560,144 ---------------- 623,771,956 Paper and Forest Products (0.4%) - ------------------------------------------------------------------------------------------------------------ 1,511,800 Unisource Worldwide, Inc. + 28,157,275 800,000 Weyerhaeuser Co. 49,800,000 ---------------- 77,957,275 Pharmaceuticals and Biotechnology (5.7%) - ------------------------------------------------------------------------------------------------------------ 1,692,000 Bristol-Myers Squibb Co. 132,716,250 994,300 Dura Pharmaceuticals, Inc. + 38,777,700 1,010,422 Elan Corp. PLC ADR (Ireland) + 47,995,045 1,104,182 Gilead Sciences, Inc. + 31,193,142 311,157 Jones Medical Industries, Inc. 9,218,026 900,000 Lilly (Eli) & Co. 101,700,000 211,300 Medicis Pharmaceutical Corp. Class A + 9,534,913 725,795 Merck & Co., Inc. 75,437,318 63,550 Novartis AG ADR (Switzerland) 101,859,629 608,344 Parexel International Corp. + 23,421,244 3,081,008 Pfizer, Inc. 183,705,102 2,625,151 Pharmacia & Upjohn, Inc. 99,099,450 336,362 Quintiles Transnational Corp. + 25,353,286 618,768 Sepracor, Inc. + 15,546,546 850,500 Smithkline Beecham PLC ADR (United Kingdom) 82,711,125 280,000 Transkaryotic Therapies, Inc. (Malaysia) + 9,800,000 583,127 Vertex Pharmaceuticals, Inc. + 20,482,336 173,800 Warner-Lambert Co. 24,277,688 ---------------- 1,032,828,800 Photography (0.6%) - ------------------------------------------------------------------------------------------------------------ 1,701,300 Polaroid Corp. 101,227,350 Publishing (1.8%) - ------------------------------------------------------------------------------------------------------------ 20,700 CMP Media, Inc. Class A + 558,900 250,000 Gannett Co., Inc. 24,828,125 831,700 Harcourt General, Inc. 39,297,825 500,000 McGraw-Hill, Inc. 33,906,250 1,250,000 Tribune Co. 66,171,875 1,275,228 Wolters Kluwer N.V. (Netherlands) 167,840,112 ---------------- 332,603,087 Railroads (0.2%) - ------------------------------------------------------------------------------------------------------------ 300,000 Burlington Northern Santa Fe Corp. + 28,968,750 Restaurants (0.8%) - ------------------------------------------------------------------------------------------------------------ 793,382 Applebee's International, Inc. 23,801,460 683,400 Cracker Barrel Old Country Store, Inc. 19,562,325 1,882,564 J.D. Wetherspoon PLC (United Kingdom) 42,603,591 798,900 Landry's Seafood Restaurants, Inc. + 20,371,950 826,410 Papa Johns International, Inc. + 27,271,530 526,900 PizzaExpress PLC (United Kingdom) 5,629,372 ---------------- 139,240,228 Retail (10.0%) - ------------------------------------------------------------------------------------------------------------ 1,566,825 Bed Bath & Beyond, Inc. + 51,705,225 1,323,277 CompUSA, Inc. + 35,563,069 542,111 Consolidated Stores Corp. + 21,819,968 6,854,762 Costco Companies, Inc. + 259,624,111 2,126,520 CVS Corp. 120,945,825 1,800,000 Dayton Hudson Corp. 116,325,000 7,297,749 Dixons Group PLC (United Kingdom) 72,703,040 576,700 Dollar General Corp. 25,374,800 1,293,124 Dollar Tree Stores, Inc. + 53,987,927 1,750,000 Federated Department Stores, Inc. + 76,671,875 1,503,800 General Nutrition Companies, Inc. + 42,858,300 336,700 Global DirectMail Corp. + 8,796,288 1,098,550 Home Depot, Inc. 54,790,181 2,571,717 Kohls Corp. + 162,018,171 1,450,000 Lowe's Cos., Inc. 54,556,250 81,700 MSC Industrial Direct Co., Inc. Class A + 3,533,525 367,300 Nordstrom, Inc. 20,821,319 7,246,753 Officemax, Inc. + 101,454,542 1,100,000 Payless Shoesource, Inc. + 67,650,000 785,137 Payment Services., Inc. + 12,856,618 970,179 Petco Animal Supplies, Inc. + [SECTION MARK] 25,709,744 215,000 Rexall Sundown, Inc. + 7,686,250 1,450,000 Rite Aid Corp. 75,309,375 4,122,297 Staples, Inc. + 103,572,712 4,550,950 Starbucks Corp. + [SECTION MARK] 186,304,516 651,942 Williams-Sonoma, Inc. + 28,155,745 689,936 Wolverine World Wide, Inc. 18,843,863 ---------------- 1,809,638,239 Satellite Services (0.4%) - ------------------------------------------------------------------------------------------------------------ 2,128,800 PanAmSat Corp. + 65,327,550 Semiconductors (3.6%) - ------------------------------------------------------------------------------------------------------------ 280,476 Altera Corp. + 16,933,739 343,416 Analog Devices, Inc. + 10,796,141 942,215 KLA-Tencor Instruments Corp. + 57,062,896 268,821 Lattice Semiconductor Corp. + 18,111,815 2,921,006 Linear Technology Corp. 195,342,276 2,578,131 Maxim Integrated Products Inc. + 178,213,305 1,700,000 National Semiconductor Corp. + 53,550,000 700,000 Texas Instruments, Inc. 80,500,000 744,311 Xilinx, Inc. + 35,261,734 ---------------- 645,771,906 Specialty Consumer Products (0.9%) - ------------------------------------------------------------------------------------------------------------ 587,093 Central Garden and Pet Co. + 15,117,645 1,276,497 Fastenal Co. 71,404,051 510,298 Luxottica Group S.P.A. ADR (Italy) 35,146,775 238,300 Marks Brothers Jewelers, Inc. + 3,068,113 810,500 Mattel, Inc. 28,164,875 ---------------- 152,901,459 Supermarkets (0.2%) - ------------------------------------------------------------------------------------------------------------ 62,250 Carrefour Supermarche SA (France) 41,955,142 Telecommunication Equipment (1.1%) - ------------------------------------------------------------------------------------------------------------ 474,550 Advanced Fibre Communications + 33,159,181 352,700 Brooks Fiber Properties, Inc. + 13,270,338 329,100 Premisys Communications, Inc. + 6,741,416 1,119,800 Qwest Communications International, Inc. + 34,853,775 176,400 Sawtek Inc. + 6,725,250 135,300 Tekelec + 8,320,950 1,656,642 Tellabs, Inc. 99,191,440 ---------------- 202,262,350 Telephone Services (2.0%) - ------------------------------------------------------------------------------------------------------------ 265,200 Intermedia Communications, Inc. + 9,646,650 1,718,400 MCI Communications Corp. 60,681,000 1,321,600 McLeod, Inc. Class A + 45,430,000 242,895 Natural Microsystems Corp. + 8,501,325 500,000 SBC Communications, Inc. 29,593,750 1,700,000 Sprint Corp. 84,150,000 994,080 Tel-Save Holdings, Inc. + 16,899,360 2,942,453 WorldCom, Inc. + 102,801,918 ---------------- 357,704,003 Textiles (0.2%) - ------------------------------------------------------------------------------------------------------------ 783,800 St. John Knits, Inc. 35,662,900 Trucking (0.3%) - ------------------------------------------------------------------------------------------------------------ 1,300,000 Ryder System, Inc. 46,556,250 Wireless Communications (0.9%) - ------------------------------------------------------------------------------------------------------------ 558,080 Clearnet Communications, Inc. Class A, (Canada) + 7,394,560 438,080 ICG Communications, Inc. + 9,418,720 6,384,009 NEXTEL Communications, Inc. Class A + 154,014,217 ---------------- 170,827,497 ---------------- Total Common Stocks (cost $12,265,620,478) $ 17,863,708,374 CONVERTIBLE BONDS AND NOTES (--%) *(cost $8,241,000) PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------------------ $ 8,000,000 Signature Resorts, Inc. cv. sub. notes 5 3/4s, 2007 $ 8,520,000 UNITS (--%) *(cost $8,991,520) PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------------------ 292,948 ThermoLase Corp. $ 5,236,446 SHORT-TERM INVESTMENTS (1.5%) * PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------------------ $ 25,000,000 Bank of America effective yield of 5.54%, 8/11/97 $ 24,961,528 30,000,000 Corporate Asset Funding Co., Inc. effective yield of 5.55%, 8/19/97 29,916,750 28,795,000 Federal Home Loan Banks effective yield of 5.41%, 9/3/97 28,652,201 27,000,000 Federal National Mortgage Association effective yield of 5.45%, 10/3/97 26,742,488 25,000,000 Federal National Mortgage Association effective yield of 5.45%, 8/4/97 24,988,646 50,000,000 Ford Motor Credit Co. effective yield of 5.58%, 8/25/97 49,814,000 50,000,000 Merrill Lynch & Co., Inc effective yield of 5.57%, 9/15/97 49,651,875 25,000,000 USAA Capital Corp. effective yield of 5.49%, 9/18/97 24,817,000 12,890,000 Interest in $204,956,000 joint repurchase agreement dated July 31, 1997 with UBS Securities due August 1, 997 with respect to various U.S. Treasury obligations -- maturity value of $12,892,062 for an effective yield of 5.76% 12,892,062 ---------------- Total Short-Term Investments (cost $272,436,550) $ 272,436,550 - ------------------------------------------------------------------------------------------------------------ Total Investments (cost $12,555,289,548) *** $ 18,149,901,370 - ------------------------------------------------------------------------------------------------------------ * Percentages indicated are based on net assets of $18,092,390,353. *** The aggregate identified cost on a tax basis is $12,593,724,046, resulting in gross unrealized appreciation and depreciation of $5,823,411,115 and $267,233,791, respectively, or net unrealized appreciation of $5,556,177,324. + 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 or ADS after the name of a foreign holding stands for American Depository Receipts or American Depository Shares, respectively, representing ownership of foreign securities on deposit with a domestic custodian bank. Affiliated Companies (Note 5) The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities July 31, 1997 Assets - --------------------------------------------------------------------------------------------------- Investments in securities, at value (identified cost $12,555,289,548) (Note 1) $18,149,901,370 - --------------------------------------------------------------------------------------------------- Dividends, interest, and other receivables 10,848,922 - --------------------------------------------------------------------------------------------------- Foreign currency (cost $308,279) 308,279 - --------------------------------------------------------------------------------------------------- Receivable for shares of the fund sold 38,558,238 - --------------------------------------------------------------------------------------------------- Receivable for securities sold 150,317,666 - --------------------------------------------------------------------------------------------------- Total assets 18,349,934,475 Liabilities - --------------------------------------------------------------------------------------------------- Payable to subcustodian (Note 2) 7,688 - --------------------------------------------------------------------------------------------------- Payable for securities purchased 204,111,893 - --------------------------------------------------------------------------------------------------- Payable for shares of the fund repurchased 18,767,163 - --------------------------------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 20,234,310 - --------------------------------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 5,291,911 - --------------------------------------------------------------------------------------------------- Payable for compensation of Trustees (Note 2) 111,462 - --------------------------------------------------------------------------------------------------- Payable for administrative services (Note 2) 4,940 - --------------------------------------------------------------------------------------------------- Payable for distribution fees (Note 2) 7,037,592 - --------------------------------------------------------------------------------------------------- Other accrued expenses 1,977,163 - --------------------------------------------------------------------------------------------------- Total liabilities 257,544,122 - --------------------------------------------------------------------------------------------------- Net assets $18,092,390,353 Represented by - --------------------------------------------------------------------------------------------------- Paid-in capital (Notes 1 and 4) $12,041,956,306 - --------------------------------------------------------------------------------------------------- Accumulated net investment loss (Note 1) (17,751) - --------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions (Note 1) 455,882,777 - --------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 5,594,569,021 - --------------------------------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $18,092,390,353 Computation of net asset value and offering price - --------------------------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($11,158,272,554 divided by 572,565,650 shares) $19.49 - --------------------------------------------------------------------------------------------------- Offering price per class A share (100/94.25 of $19.49)* $20.68 - --------------------------------------------------------------------------------------------------- Net asset value and offering price per class B share ($5,664,374,740 divided by 304,963,617 shares)** $18.57 - --------------------------------------------------------------------------------------------------- Net asset value and redemption price per class M share ($208,656,370 divided by 10,856,717 shares) $19.22 - --------------------------------------------------------------------------------------------------- Offering price per class M share (100/96.50 of $19.22)* $19.92 - --------------------------------------------------------------------------------------------------- Net asset value, offering price and redemption price per class Y share ($1,061,086,689 divided by 53,866,915 shares) $19.70 - --------------------------------------------------------------------------------------------------- * On single retail sales of less than $50,000 sales of $50,000 or more and on group sales, the offering price is reduced. ** Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. The accompanying notes are an integral part of these financial statements.
Statement of operations Year ended July 31, 1997 Investment income: - -------------------------------------------------------------------------------------------------- Dividends (net of foreign tax of $1,809,327) $ 116,578,777 - -------------------------------------------------------------------------------------------------- Interest 26,430,568 - -------------------------------------------------------------------------------------------------- Total investment income 143,009,345 - -------------------------------------------------------------------------------------------------- Expenses: Compensation of Manager (Note 2) 71,453,260 - -------------------------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 33,592,374 - -------------------------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 332,974 - -------------------------------------------------------------------------------------------------- Administrative services (Note 2) 59,815 - -------------------------------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 22,343,711 - -------------------------------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 44,357,003 - -------------------------------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 1,035,616 - -------------------------------------------------------------------------------------------------- Reports to shareholders 979,211 - -------------------------------------------------------------------------------------------------- Registration fees 1,153,997 - -------------------------------------------------------------------------------------------------- Auditing 173,075 - -------------------------------------------------------------------------------------------------- Legal 173,863 - -------------------------------------------------------------------------------------------------- Postage 1,915,219 - -------------------------------------------------------------------------------------------------- Other 1,371,566 - -------------------------------------------------------------------------------------------------- Total expenses 178,941,684 - -------------------------------------------------------------------------------------------------- Expense reduction (Note 2) (3,852,442) - -------------------------------------------------------------------------------------------------- Net expenses 175,089,242 - -------------------------------------------------------------------------------------------------- Net investment loss (32,079,897) - -------------------------------------------------------------------------------------------------- Net realized gain on investments (Notes 1, 3, and 5) (including realized loss of $12,046,853 on sales of investments in affiliated issuers) 574,582,154 - -------------------------------------------------------------------------------------------------- Net realized gain on foreign currency translations (Note 1) 25,010 - -------------------------------------------------------------------------------------------------- Net unrealized depreciation of assets and liabilities in foreign currencies during the year (51,551) - -------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments during the year 3,610,070,235 - -------------------------------------------------------------------------------------------------- Net gain on investments 4,184,625,848 - -------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $4,152,545,951 - -------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets Year ended July 31 ------------------------ 1997 1996 - --------------------------------------------------------------------------------------------------------- Increase in net assets - --------------------------------------------------------------------------------------------------------- Operations: - --------------------------------------------------------------------------------------------------------- Net investment loss $ (32,079,897) $ (28,749,167) - --------------------------------------------------------------------------------------------------------- Net realized gain on investments and foreign currency transactions 574,607,164 962,821,663 - --------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 3,610,018,684 144,557,473 - --------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 4,152,545,951 1,078,629,969 - --------------------------------------------------------------------------------------------------------- Distributions to shareholders: - --------------------------------------------------------------------------------------------------------- From net realized gain on investments - --------------------------------------------------------------------------------------------------------- Class A (548,605,542) (317,069,690) - --------------------------------------------------------------------------------------------------------- Class B (281,238,919) (135,078,052) - --------------------------------------------------------------------------------------------------------- Class M (8,171,341) (2,101,620) - --------------------------------------------------------------------------------------------------------- Class Y (52,119,074) (22,695,086) - --------------------------------------------------------------------------------------------------------- Increase from capital share transactions (Note 4) 3,295,035,279 3,796,887,582 - --------------------------------------------------------------------------------------------------------- Total increase in net assets 6,557,446,354 4,398,573,103 - --------------------------------------------------------------------------------------------------------- Net assets - --------------------------------------------------------------------------------------------------------- Beginning of year 11,534,943,999 7,136,370,896 - --------------------------------------------------------------------------------------------------------- End of year (including accumulated net investment loss of $17,751 and --, respectively) $18,092,390,353 $11,534,943,999 - --------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Financial highlights (For a share outstanding throughout the period) CLASS A - ----------------------------------------------------------------------------------------------------------------------------- Per-share operating performance Year ended July 31 - ----------------------------------------------------------------------------------------------------------------------------- 1997 1996 1995 1994 1993 - ----------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $15.73 $14.42 $11.19 $11.02 $9.67 - ----------------------------------------------------------------------------------------------------------------------------- Investment operations - ----------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) --(d) (.02)(d) .02 (.02) (.02) - ----------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 4.85 2.19 3.72 .65 1.89 - ----------------------------------------------------------------------------------------------------------------------------- Total from investment operations 4.85 2.17 3.74 .63 1.87 - ----------------------------------------------------------------------------------------------------------------------------- Less distributions: - ----------------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (1.09) (.86) (.51) (.46) (.52) - ----------------------------------------------------------------------------------------------------------------------------- Total distributions (1.09) (.86) (.51) (.46) (.52) - ----------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $19.49 $15.73 $14.42 $11.19 $11.02 - ----------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - ----------------------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) 32.22 15.49 34.72 5.49 19.69 - ----------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $11,158,273 $7,332,248 $4,895,180 $3,051,878 $2,403,332 - ----------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) 1.02 1.03 1.07 1.10 1.12 - ----------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) -- (.10) .17 (.18) (.14) - ----------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 59.77 57.92 65.43 57.74 64.62 - ----------------------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) $0.0546 - ----------------------------------------------------------------------------------------------------------------------------- + Commencement of operations. * 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.
Financial highlights (For a share outstanding throughout the period) CLASS B - ------------------------------------------------------------------------------------------------------------------------- Per-share operating performance Year ended July 31 - ------------------------------------------------------------------------------------------------------------------------- 1997 1996 1995 1994 1993 - ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $15.15 $14.01 $10.97 $10.89 $9.63 - ------------------------------------------------------------------------------------------------------------------------- Investment operations - ------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (.12)(d) (.13)(d) (.06) (.05) (.03) - ------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 4.63 2.13 3.61 .59 1.81 - ------------------------------------------------------------------------------------------------------------------------- Total from investment operations 4.51 2.00 3.55 .54 1.78 - ------------------------------------------------------------------------------------------------------------------------- Less distributions: - ------------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (1.09) (.86) (.51) (.46) (.52) - ------------------------------------------------------------------------------------------------------------------------- Total distributions (1.09) (.86) (.51) (.46) (.52) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $18.57 $15.15 $14.01 $10.97 $10.89 - ------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) 31.17 14.70 33.65 4.71 18.79 - ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $5,664,375 $3,405,318 $1,870,370 $911,069 $408,361 - ------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) 1.77 1.78 1.82 1.84 1.87 - ------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) (.75) (.85) (.58) (.91) (.91) - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 59.77 57.92 65.43 57.74 64.62 - ------------------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) $0.0546 - ------------------------------------------------------------------------------------------------------------------------- + Commencement of operations. * 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 required 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.
Financial highlights (For a share outstanding throughout the period) CLASS M - ----------------------------------------------------------------------------------------------------------------- For the period Per-share Dec. 1, 1994+ operating performance Year ended July 31 to July 31 - ----------------------------------------------------------------------------------------------------------------- 1997 1996 1995 - ----------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $15.60 $14.37 $11.79 - ----------------------------------------------------------------------------------------------------------------- Investment operations - ----------------------------------------------------------------------------------------------------------------- Net investment income (loss) (.08)(d) (.09)(d) (.01) - ----------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 4.79 2.18 3.10 - ----------------------------------------------------------------------------------------------------------------- Total from investment operations 4.71 2.09 3.09 - ----------------------------------------------------------------------------------------------------------------- Less distributions: - ----------------------------------------------------------------------------------------------------------------- From net realized gain on investments (1.09) (.86) (.51) - ----------------------------------------------------------------------------------------------------------------- Total distributions (1.09) (.86) (.51) - ----------------------------------------------------------------------------------------------------------------- Net asset value, end of period $19.22 $15.60 $14.37 - ----------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - ----------------------------------------------------------------------------------------------------------------- Total investment return at net asset value (%)(a) 31.57 14.97 27.42 * - ----------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $208,656 $87,782 $19,004 - ----------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) 1.52 1.50 1.06 * - ----------------------------------------------------------------------------------------------------------------- Ratio of net investment income (loss) to average net assets (%) (.50) (.57) (.24)* - ----------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 59.77 57.92 65.43 - ----------------------------------------------------------------------------------------------------------------- Average commission rate paid (c) $0.0546 - ----------------------------------------------------------------------------------------------------------------- + Commencement of operations. * 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 required 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.
Financial highlights (For a share outstanding throughout the period) CLASS Y - ------------------------------------------------------------------------------------------------------------------ For the period Per-share March 31, 1994+ operating performance Year ended July 31 to July 31 - ------------------------------------------------------------------------------------------------------------------ 1997 1996 1995 1994 - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $15.85 $14.48 $11.22 $11.24 - ------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------ Net investment income .04(d) .02(d) .03 -- - ------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments 4.90 2.21 3.74 (.02) - ------------------------------------------------------------------------------------------------------------------ Total from investment operations 4.94 2.23 3.77 (.02) - ------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------ From net investment income -- -- -- -- - ------------------------------------------------------------------------------------------------------------------ From net realized gain on investments (1.09) (.86) (.51) -- - ------------------------------------------------------------------------------------------------------------------ Total distributions (1.09) (.86) (.51) -- - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $19.70 $15.85 $14.48 $11.22 - ------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------ Total investment return at net asset value (%)(a) 32.56 15.85 34.90 (0.18)* - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $1,061,087 $709,595 $351,817 $82,102 - ------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .77 .77 .83 .31* - ------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) .25 .15 .39 (.05)* - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 59.77 57.92 65.43 57.74 - ------------------------------------------------------------------------------------------------------------------ Average commission rate paid (c) $0.0546 - ------------------------------------------------------------------------------------------------------------------ + Commencement of operations. * 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 required 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 July 31, 1997 Note 1 Significant accounting policies Putnam Voyager Fund (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 M, and class Y shares. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class B shares, which convert to class A shares after eight years, do not pay a front-end sales charge but pay a higher ongoing distribution fee than class A shares, and may be subject to a contingent deferred sales charge, if those shares are redeemed within 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 initially 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) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities are recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when accrued or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such fluctuations are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net exchange gains or losses on closed forward currency contracts, disposition of foreign currencies and the difference between the amount of investment income and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized gains and losses on foreign currency transactions arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. F) 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. G) 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 at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences include treatment of net operating loss, losses on wash sale transactions, and realized gains and losses on short-term foreign currency contracts. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. For the year ended July 31, 1997, the fund reclassified $32,062,146 to decrease accumulated net investment loss and 32,037,136 to decrease paid-in-capital, with a decrease to accumulated net realized gains on investments of $25,010. The calculation of net investment income per share in the financial highlights table excludes these adjustments. 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. As part of the custodian contract between the subcustodian bank and PFTC, the subcustodian bank has a lien of the securities of the fund to the extent permitted by the fund's investment restrictions to cover any advances made by the subcustodian bank for the settlement of securities purchased by the fund. At July 31, 1997, the payable to the subcustodian bank represents the amount due for cash advance for the settlement of a security purchased. 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 year ended July 31, 1997, fund expenses were reduced by $3,852,442 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 $11,733 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 year ended July 31, 1997, Putnam Mutual Funds Corp., acting as underwriter received net commissions of $6,667,683 and $170,791 from the sale of class A and class M shares, respectively and $6,493,953 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 year ended July 31, 1997, Putnam Mutual Funds Corp., acting as underwriter received $145,471 on class A redemptions. Note 3 Purchases and sales of securities During the year ended July 31, 1997, purchases and sales of investment securities other than short-term investments aggregated $10,957,733,274 and $8,340,771,948, 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 July 31, 1997, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Year ended July 31, 1997 - ------------------------------------------------------------ Class A Shares Amount - ------------------------------------------------------------ Shares sold 234,017,903 $ 3,953,449,438 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 32,563,535 527,855,140 - ------------------------------------------------------------ 266,581,438 4,481,304,578 Shares repurchased (160,170,443) (2,692,322,364) - ------------------------------------------------------------ Net increase 106,410,995 $ 1,788,982,214 - ------------------------------------------------------------ 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 - ------------------------------------------------------------ Year ended July 31, 1997 - ------------------------------------------------------------ Class B Shares Amount - ------------------------------------------------------------ Shares sold 105,067,672 $ 1,702,505,550 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 16,881,432 261,999,265 - ------------------------------------------------------------ 121,949,104 1,964,504,815 Shares repurchased (41,818,952) (673,171,844) - ------------------------------------------------------------ Net increase 80,130,152 $ 1,291,332,971 - ------------------------------------------------------------ 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 - ------------------------------------------------------------ Year ended July 31, 1997 - ------------------------------------------------------------ Class M Shares Amount - ------------------------------------------------------------ Shares sold 7,188,244 $121,126,210 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 474,478 7,605,878 - ------------------------------------------------------------ 7,662,722 128,732,088 Shares repurchased (2,432,366) (40,629,278) - ------------------------------------------------------------ Net increase 5,230,356 $ 88,102,810 - ------------------------------------------------------------ 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 - ------------------------------------------------------------ Year ended July 31, 1997 - ------------------------------------------------------------ Class Y Shares Amount - ------------------------------------------------------------ Shares sold 31,072,579 $ 513,070,605 - ------------------------------------------------------------ Shares issued in connection with reinvestment of distributions 3,185,837 52,119,074 - ------------------------------------------------------------ 34,258,416 565,189,679 Shares repurchased (25,162,721) (438,572,395) - ------------------------------------------------------------ Net increase 9,095,695 $ 126,617,284 - ------------------------------------------------------------ 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 Name of Affiliate Cost Cost Income Value - ------------------------------------------------------------------------------ Chancellor Broadcasting, Class A $ 3,370,439 $ -- $-- $ 23,257,781 Evergreen Media Corp., Class A 43,316,001 -- -- 81,981,200 Fulcrum Technologies, Inc. -- 8,893,294 -- -- Geoworks 937,125 -- -- 7,084,469 LifeCore Biomedical, Inc. 256,375 -- -- 8,289,000 Petco Animal Supplies, Inc. 2,455,294 -- -- 25,709,744 Preferred Networks, Inc. -- 7,329,264 -- -- Sipex Corp. 10,765,425 1,087,100 -- 19,223,100 Starbucks Corp. 85,035,597 21,748,007 -- 186,304,516 TMP Worldwide, Inc. 6,539,436 -- -- 11,291,891 Western Wireless Corp., Class A -- 15,504,405 -- -- WestWood One, Inc. 2,811,800 -- -- 64,731,875 - ------------------------------------------------------------------------------ Totals $155,487,492 $54,562,070 $-- $427,873,576 ============================================================================== Federal tax information (Unaudited) Pursuant to section 852 of the Internal Revenue Code, the Fund hereby designates $1.088 per share (or if different, the amount necessary to offset net capital gains earned by the fund) [for all share classes] as capital gain dividends for its capital taxable year ended July 31,1997. The Form 1099 you receive in January 1998 will show the tax status of all distributions paid to your account in calendar 1997. PUTNAM GROWTH FUNDS Asia Pacific Growth Fund Capital Appreciation Fund Diversified Equity Trust Europe Growth Fund Global Growth Fund Global Natural Resources Fund Growth Opportunities Fund Health Sciences Trust International Growth Fund * International New Opportunities Fund Investors Fund New Opportunities Fund + OTC & Emerging Growth Fund [DBL. DAGGER] Vista Fund Voyager Fund Voyager Fund II PUTNAM GROWTH AND INCOME FUNDS Balanced Retirement Fund Convertible Income-Growth Trust Equity Income Fund The George Putnam Fund of Boston The Putnam Fund for Growth and Income Growth and Income Fund II International Growth and Income Fund New Value Fund Utilities Growth and Income Fund PUTNAM INCOME FUNDS American Government Income Fund Diversified Income Trust Diversified Income Trust II Federal Income Trust Global Governmental Income Trust High Yield Advantage Fund High Yield Total Return Fund High Yield Trust + Income Fund Money Market Fund ** Intermediate U.S. Government Income Fund Preferred Income Fund U.S. Government Income Trust PUTNAM TAX-FREE INCOME FUNDS Municipal Income Fund Tax Exempt Income Fund Tax Exempt Money Market Fund** Tax-Free High Yield Fund Tax-Free Insured Fund State tax-free income funds [SECTION MARK] Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio and Pennsylvania State tax-free money market funds [SECTION MARK] California, New York LIFESTAGESM FUNDS Putnam Asset Allocation Funds--three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments. The three portfolios: Asset Allocation: Balanced Portfolio Asset Allocation: Conservative Portfolio Asset Allocation: Growth Portfolio * Formerly Overseas Growth Fund + Closed to new investors. Some exceptions may apply. Contact Putnam for details. [DBL. DAGGER] Formerly OTC Emerging Growth Fund [SECTION MARK] Not available in all states. ** An investment in a money market fund is neither insured nor guaranteed by the U.S. government. These funds are managed to maintain a price of $1.00 per share, although there is no assurance that this price will be maintained in the future. Please call your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus for any Putnam fund. It contains more complete information, including charges and expenses. Please read it carefully before you invest or send money. Fund information INVESTMENT MANAGER Putnam Investment Management, Inc. One Post Office Square Boston, MA 02109 MARKETING SERVICES Putnam Mutual Funds Corp. One Post Office Square Boston, MA 02109 CUSTODIAN Putnam Fiduciary Trust Company LEGAL COUNSEL Ropes & Gray INDEPENDENT ACCOUNTANTS Price Waterhouse LLP 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 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 Ian C. Ferguson 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 - -------------------- 35902-007/883/530/516 9/97 -----END PRIVACY-ENHANCED MESSAGE-----