-----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, CGIEN/lr6QSQy5qkUtbpJgjudYA0+IMsVveGBv/rYlYE/lhXvWjxCkocglrkQcYX eHYUTKUIxmeaqjHtNMf6TA== 0000928816-99-000291.txt : 19990922 0000928816-99-000291.hdr.sgml : 19990922 ACCESSION NUMBER: 0000928816-99-000291 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990731 FILED AS OF DATE: 19990921 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: 99714276 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 ON PERFORMANCE AND OUTLOOK 7-31-99 [LOGO: BOSTON * LONDON * TOKYO] From the Chairman [GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM] [copyright] Karsh, Ottawa Dear Shareholder: In a rather rapid succession, equity investors have recently been subjected to two distinct turns in the stock market. Shifting away from its narrow growth-oriented bias, the market first experienced a rally in value-oriented and cyclical stocks; then, more recently, it encountered a healthy broadening that should present fertile ground for Putnam Voyager Fund in the months ahead. In this setting, many opportunities presented themselves, and your fund's managers with the help of Putnam's extensive research capability sought many of them out. Fortunately it was not a blind search, for your fund has a highly developed procedure for identifying potential holdings and checking them thoroughly. In the following report, the management team discusses the process in the context of fiscal 1999's performance and offers its views on the fund's prospects in the months ahead. Respectfully yours, /S/GEORGE PUTNAM George Putnam Chairman of the Trustees September 15, 1999 Report from the Fund Managers Roland W. Gillis Charles H. Swanberg Robert R. Beck Michael Stack Putnam Voyager Fund continued its successful journey throughout another year of volatile markets, producing attractive results for its 1999 fiscal year. In the rapidly changing markets that characterized the 12 months ended July 31, 1999, stock selection that targeted large, small, and midsize companies was a key to fund performance. Much of the portfolio's performance during the fiscal year came from companies in the technology and communications areas. Total return for 12 months ended 7/31/99 Class A Class B Class C Class M NAV POP NAV CDSC NAV CDSC NAV POP - ------------------------------------------------------------------------- 22.40% 15.38% 21.43% 16.43% 21.52% 20.52% 21.83% 17.56% - ------------------------------------------------------------------------- Past performance is no indication of future results. Performance information for longer periods begins on page 6. * EQUITIES RIDE MARKET ROTATION Last summer, as your fund began its fiscal year, the market's momentum was fueled by steady economic growth and investor optimism. The investment environment was helped by three Federal Reserve Board rate cuts, which calmed U.S. and global markets alike. As your fund reached its fiscal midpoint, the Dow Jones Industrial Average sprinted over the milestone 10,000 mark and large-capitalization stock prices set new records. For most of the period, however, there was a wide performance gap between large- and small-cap stocks. The rift between growth and value stocks increased as well. As your fund approached the end of its fiscal year, the combination of an acceleration in economic growth, both in the United States and abroad, with a sustained increase in interest rates led to a dramatic shift in investor sentiment and sparked a rapid, widespread market rotation. Investors sold large-cap growth stocks, which offered more predictable earnings and which had dominated the market since mid 1994, to buy economically sensitive cyclical stocks. Money flowed into large-cap value stocks as well as into mid- and small-cap stocks, and the performance gap narrowed as the market broadened. [GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS] TOP INDUSTRY SECTORS* Retail 8.5% Telephone services 8.2% Computer software 8.2% Broadcasting 7.0% Telecommunications 6.6% Footnote reads: *Based on net assets as of 7/31/99. Holdings will vary over time. Investors also became increasingly convinced that economies outside the United States, previously perceived as stagnant or even contracting, had begun to show signs of recovery. Improving global economic conditions, highlighted by larger-than-expected European interest-rate cuts and the apparent revival of Asian economies, assured investors that the international markets' deceleration in profit growth was coming to an end. Faced with indications of an accelerating U.S. economy, investors expressed concern that the Fed would initiate a series of interest-rate hikes. The Fed initiated a modest quarter of a percentage point increase in June -- the first in two years -- followed by another quarter of a percentage point increase after your fund's fiscal year came to a close. * TECHNOLOGY REMAINS A LARGE FOCUS Your fund's recent strategy has been to focus on companies of all sizes that we believe are benefiting from the changes brought on by new technologies, such as the growth of the Internet and telecommunications. For this reason, technology remains one of the largest industry sectors in the portfolio. Within this sector, we emphasized communications equipment and components, taking advantage of the fact that rapid growth in data communications services is driving demand from all industry suppliers. QUALCOMM, Inc., a key holding in this area, is a leader in developing and delivering innovative digital wireless communications products and services based on the company's code division multiple access (CDMA) digital technology. The company's major business areas include CDMA phones, integrated chip sets and system software, technology licensing, and satellite-based systems. CIO magazine recently named QUALCOMM as a recipient of the 1999 CIO-100 Award for possessing the strategy, ability, and drive to prosper well into the next century. The award recognizes organizations around the world that exemplify the highest level of operational and strategic excellence. "[Fund Managers] Gillis and Swanberg look for fast-growing companies, focusing on small- and mid-cap stocks, respectively. [Fund Manager] Beck follows more of a growth-at-a-reasonable-price approach, looking for beaten-down large caps that still have strong growth prospects." - -- Morningstar Mutual Funds, April 29, 1999 Other noteworthy holdings included Metromedia Fiber Network Inc, Linear Technology Corp, PMC-Sierra Inc, and Exodus Communications Inc. While these holdings, along with others discussed in this report, were viewed favorably at the end of the fiscal period, all are subject to review and adjustment in accordance with the fund's investment strategy and may vary in the future. * MEDIA SECTOR BENEFITS FROM STRONG ECONOMY The strong economy during your fund's fiscal year along with the Internet and pharmaceuticals drove demand for advertising. The media sector represented a significant portion of your fund's portfolio and strength helped drive fund performance during the period. We concentrated on the radio, television, billboard, cable, and Internet industries. Among the sector's better performers were Clear Channel Communications Inc, Liberty Media Group (owned by AT&T Corp.), and MediaOne Group, Inc. Clear Channel Communications is a diversified media company that owns or operates 206 radio stations and 18 domestic television stations and is engaged in outdoor advertising with 213,566 international display faces. Clear Channel recently announced plans to invest $15 million in Internet music network Tunes.com Inc. The deal will give Clear Channel a stake of less than 20% in Tunes.com after the company's initial public offering. Tunes.com's Web site includes 1 million song clips, 130,000 album reviews, and 85,000 artist profiles. At the site viewers can watch live concerts and music videos, buy CDs, or download near CD-quality digital music. * CONSUMER SECTOR FOCUSES ON DISCOUNT RETAILERS Consumer holdings were focused on leading retailers, especially those serving value-oriented niches. Some specialty discount retailers have found ways to increase profits while offering reduced prices to consumers. Costco Companies, Inc. and Kohl's Corporation are two examples of companies that have recognized that many people in the United States demand value above service. "One of our successful strategies during Putnam Voyager Fund's fiscal year has been to focus on companies of all sizes that we believe are benefiting from the changes brought on by new technologies, such as the growth of the Internet and of telecommunications." - -- Charles H. Swanberg, Manager, Putnam Voyager Fund Kohl's Corporation operates family-oriented specialty department stores primarily in the Midwest and Mid-Atlantic area that feature quality, moderately priced apparel, accessories, and housewares. A department store chain of 231 stores, Kohl's announced that it plans to open 55 to 60 new stores in the year 2000. Of that total, about 38 are planned to open in the first half with 33 stores in New York, New Jersey, and Connecticut previously operated in former Caldor locations. During the period, we reduced your fund's exposure in health care as real or feared threats of government Medicare/Medicaid reimbursement regulations continued to affect multiples on these stocks. Business service holdings were concentrated in computer-related outsourcing services and transaction processing, both areas of rapid growth. * PORTFOLIO POSITIONED TO BENEFIT FROM BROADENING MARKET Although interest-rate fears were beginning to surface as the fiscal year drew to a close, the Fed's less restrictive tone in recent months shifted market sentiment toward an expectation of a benign-inflation, steady-growth environment. As a result, the market has broadened considerably with nearly all investment styles selling at record levels. [GRAPHIC OMITTED: TOP 10 HOLDINGS] TOP 10 HOLDINGS AT&T Corp. Telephone services CBS Corporation Broadcasting Tyco International Ltd. Conglomerates Microsoft Corporation Computer software Motorola, Inc. Electronics and electrical equipment MediaOne Group Inc. Cable television Kohl's Corporation Retail Clear Channel Communications, Inc. Broadcasting Linear Technology Corp. Semiconductors Costco Companies, Inc. Retail Footnote reads: These holdings represent 22.3% of the fund's net assets as of 7/31/99. Portfolio holdings will vary over time. Interest rates have increased in 1999, although the Fed has worked to calm investor fears about further increases in long-term interest rates. We will continue to monitor carefully signs of overheated growth or inflation that could move the Fed back to a restrictive mode. While periods of market volatility are likely over the near term, the quality and growth potential of your fund's holdings remain high. This fact gives us confidence that as the market broadens, the smaller, less liquid, aggressively positioned stocks in the fund's portfolio may be poised to outperform the 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 7/31/99, there is no guarantee the fund will continue to hold these securities in the future. This fund invests all or a portion of its assets in small to midsize 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 capital appreciation primarily through common stocks.
TOTAL RETURN FOR PERIODS ENDED 7/31/99 Class A Class B Class C Class M (inception dates) (4/1/69) (4/27/92) (7/26/99) (12/1/94) NAV POP NAV CDSC NAV CDSC NAV POP - ----------------------------------------------------------------------------------------- 1 year 22.40% 15.38% 21.43% 16.43% 21.52% 20.52% 21.83% 17.56% - ----------------------------------------------------------------------------------------- 5 years 194.17 177.32 183.29 181.29 183.37 183.37 186.98 176.85 Annual average 24.09 22.63 23.15 22.98 23.16 23.16 23.47 22.59 - ----------------------------------------------------------------------------------------- 10 years 447.48 416.00 405.94 405.94 407.57 407.57 420.26 402.06 Annual average 18.53 17.83 17.60 17.60 17.64 17.64 17.93 17.51 - ----------------------------------------------------------------------------------------- Annual average (life of fund) 14.51 14.29 13.44 13.44 13.65 13.65 13.74 13.61 - -----------------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 7/31/99 Russell MidCap Consumer Growth Index price index - ------------------------------------------------------------------- 1 year 21.69% 2.14% - ------------------------------------------------------------------- 5 years 158.26 12.33 Annual average 20.90 2.35 - ------------------------------------------------------------------- 10 years 332.96 34.00 Annual average 15.79 2.97 - ------------------------------------------------------------------- Annual average (life of fund) N/A* 5.17 - ------------------------------------------------------------------- Past performance is no assurance of future results. More recent returns may be more or less than those shown. Returns for class A and class M shares reflect the current maximum initial sales charges of 5.75% and 3.50% respectively. Class B share returns for the 1-, 5-, 10-year, and life-of-fund periods reflect the applicable contingent deferred sales charge (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 applicable to such shares. For class C shares, returns for periods prior to their inception are derived from the historical performance of class A shares, adjusted to reflect both the CDSC currently applicable to class C shares, which is 1% for the first year and is eliminated thereafter, and the higher operating expenses applicable to class C shares. All returns assume reinvestment of distributions at NAV. 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. *The Russell MidCap Growth Index did not exist at the time of the Fund's inception. [GRAPHIC OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT] GROWTH OF A $10,000 INVESTMENT Cumulative total return of a $10,000 investment since 7/31/89 Fund's class A Russell MidCap Consumer price Date shares at POP Growth Index index 7/31/89 9,425 10,000 10,000 7/31/90 9,876 10,589 10,482 7/31/91 12,252 12,610 10,949 7/31/92 13,892 14,068 11,294 7/31/93 16,628 15,930 11,608 7/31/94 17,541 16,764 11,929 7/31/95 23,630 21,921 12,259 7/31/96 27,291 23,509 12,621 7/31/97 36,084 32,841 12,902 7/31/98 42,157 35,578 13,119 7/31/99 $51,600 $43,296 $13,400 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 or class C shares would have been valued at $50,594 and $50,757, respectively and no contingent deferred sales charges would apply; a $10,000 investment in the fund's class M shares would have been valued at $52,026 ($50,206 at public offering price). PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 7/31/99 Class A Class B Class C Class M - ----------------------------------------------------------------------------- Distributions (number) 1 1 -- 1 - ----------------------------------------------------------------------------- Income -- -- -- -- - ----------------------------------------------------------------------------- Capital gains Long-term $1.562 $1.562 $-- $1.562 - ----------------------------------------------------------------------------- Short-term 0.023 0.023 -- 0.023 - ----------------------------------------------------------------------------- Total $1.585 $1.585 $-- $1.585 - ----------------------------------------------------------------------------- Share value: NAV POP NAV NAV NAV POP - ----------------------------------------------------------------------------- 7/31/98 $21.36 $22.66 $20.14 -- $20.93 $21.69 - ----------------------------------------------------------------------------- 7/26/99* -- -- -- $24.64 -- -- - ----------------------------------------------------------------------------- 7/31/99 24.25 25.73 22.57 24.25 23.61 24.47 - -----------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 6/30/99 (most recent calendar quarter) Class A Class B Class C Class M (inception dates) (4/1/69) (4/27/92) (7/26/99) (12/1/94) NAV POP NAV CDSC NAV CDSC NAV POP - ---------------------------------------------------------------------------------------- 1 year 21.28% 14.30% 20.33% 15.33% 20.37% 19.37% 20.67% 16.46% - ---------------------------------------------------------------------------------------- 5 years 212.87 194.94 201.37 199.37 201.12 201.12 205.32 194.76 Annual average 25.62 24.15 24.69 24.52 24.67 24.67 25.01 24.13 - ---------------------------------------------------------------------------------------- 10 years 496.39 462.10 451.05 451.05 453.33 453.33 466.49 446.67 Annual average 19.55 18.85 18.61 18.61 18.66 18.66 18.94 18.51 - ---------------------------------------------------------------------------------------- Annual average (life of fund) 14.67 14.45 13.60 13.60 13.81 13.81 13.90 13.77 - ---------------------------------------------------------------------------------------- Past performance is no assurance of future results. More recent returns may be more or less than those shown. They do not take into account any adjustment for taxes payable on reinvested distributions. 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. * Inception date of class C shares.
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 C shares are not subject to an initial sales charge and are subject to a contingent deferred sales charge only if the shares are redeemed during the first year. Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no 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 5.75% maximum 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 or C shares and assumes redemption at the end of the period. Your fund's class B 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. The CDSC for class C shares is 1% for one year after purchase. Comparative benchmarks Russell MidCap Growth Index* measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. Consumer price index (CPI) is a commonly used measure of inflation; it does not represent an investment return. *Securities indexes assume reinvestment of all distributions and interest payments and do 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. A guide to the financial statements These sections of the report, preceded by the Report of independent accountants, constitute the fund's financial statements. The fund's portfolio lists all the fund's investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification. Statement of assets and liabilities shows how the fund's net assets and share price is determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the net assets allocated to remarketed preferred shares.) Statement of operations shows the fund's net investment gain or loss for the reporting period. This is determined by adding up all the fund's earnings -- from dividends and interest income -- and subtracting its operating expenses. This statement also lists any net gain or loss the fund realized on the sales of its holdings and -- for holdings that remain in the portfolio -- any change in unrealized gains or losses over the period. Statement of changes in net assets shows how the fund's net assets were affected by distributions to shareholders and by changes in the number of the fund's shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned. Financial highlights provide an overview of the fund's investment results, per-share distributions, expense ratios, net investment income ratios and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlight table also includes the current reporting period. For open-ended funds, a separate table is provided for each share class. Report of independent accountants For the fiscal year ended July 31, 1999 To the Trustees and Shareholders of Putnam Voyager Fund In our opinion, the accompanying statement of assets and liabilities, including the fund's portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Putnam Voyager Fund (the "fund") at July 31, 1999, 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, 1999 by correspondence with the custodian, provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Boston, Massachusetts September 13, 1999
The fund's portfolio July 31, 1999 COMMON STOCKS (96.9%) (a) NUMBER OF SHARES VALUE Advertising (1.9%) - -------------------------------------------------------------------------------------------------------------------------- 1,688,731 Lamar Advertising Co. (NON) $ 68,604,697 2,748,300 Omnicom Group, Inc. 194,785,763 7,467,719 Outdoor Systems, Inc. (NON) 249,701,854 391,700 TMP Worldwide Inc. (NON) 18,385,419 -------------- 531,477,733 Aerospace and Defense (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 2,127,500 Boeing Co. 96,535,313 Airlines (--%) - -------------------------------------------------------------------------------------------------------------------------- 99,100 Ryanair Holdings, PLC ADR (Ireland) (NON) 5,153,200 Apparel (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 1,839,100 Nike, Inc. 95,633,200 Banks (3.8%) - -------------------------------------------------------------------------------------------------------------------------- 373,600 Bank of America Corp. 24,797,700 1,335,000 Bank One Corp. 72,840,938 5,136,300 Fifth Third Bancorp 334,180,519 12,988,500 Firstar Corp. 338,512,781 2,289,200 Mercantile Bancorp., Inc. 124,761,400 610,800 Northern Trust Corp. 53,139,600 849,700 SunTrust Banks, Inc. 54,805,650 1,117,000 Washington Mutual, Inc. 38,327,063 621,100 Zions Bancorp 36,023,800 -------------- 1,077,389,451 Broadcasting (7.0%) - -------------------------------------------------------------------------------------------------------------------------- 5,225,346 AMFM, Inc. (NON) 274,330,665 17,428,680 CBS Corp. (NON) 765,772,628 597,300 Citadel Communications Corp. (NON) 19,113,600 6,938,558 Clear Channel Communications, Inc. (NON) 482,663,441 683,300 Entercom Communications Corp. (NON) 27,673,650 1,036,181 Hispanic Broadcasting Corp. (NON) 73,763,135 6,104,100 Infinity Broadcating Corp. Class A (NON) 168,244,256 749,130 Sinclair Broadcast Group, Inc. Class A (NON) 14,186,649 1,454,600 Univision Communications Inc. Class A (NON) 100,731,050 2,015,000 WestWood One, Inc. (AFF) (NON) 75,310,625 -------------- 2,001,789,699 Business Equipment and Services (3.1%) - -------------------------------------------------------------------------------------------------------------------------- 616,545 Affiliated Computer Services, Inc. Class A (NON) 28,669,343 458,869 AnswerThink Consulting Group, Inc. 37,225,748 9,798,900 Cendant Corp. (NON) 197,202,863 2,570,900 Cintas Corp. 164,858,963 1,444,200 Hewlett-Packard Co. 151,189,688 3,460,300 Interpublic Group Cos. Inc. 145,332,600 194,300 Navigant Consulting, Inc. (NON) 8,209,175 14,667,300 Rentokil Group PLC (United Kingdom) 57,079,265 3,702,500 Serco Group PLC (United Kingdom) (AFF) 81,769,083 760,400 Snyder Communications, Inc. (NON) 14,732,750 -------------- 886,269,478 Cable Television (3.0%) - -------------------------------------------------------------------------------------------------------------------------- 706,400 Adelphia Communications Corp. (NON) 43,002,100 366,500 Century Communications Corp. (NON) 16,320,703 2,316,500 Comcast Corp. Class A 89,185,250 411,600 Insight Communications Company, Inc. (NON) 12,296,550 7,267,600 MediaOne Group Inc. (NON) 525,992,550 3,504,100 USA Networks, Inc. (NON) 167,977,794 -------------- 854,774,947 Chemicals (0.6%) - -------------------------------------------------------------------------------------------------------------------------- 1,989,800 Hoechst AG (Germany) (NON) 83,893,828 782,500 Rohm & Haas Co. 33,354,063 932,700 Union Carbide Corp. 44,769,600 -------------- 162,017,491 Computer Services (2.8%) - -------------------------------------------------------------------------------------------------------------------------- 2,697,673 Capita Group PLC (United Kingdom) 30,477,773 215,000 CMG Information Services, Inc. 19,820,313 1,349,500 Comdisco, Inc. 32,556,688 1,021,600 Comverse Technology, Inc. 77,194,650 261,600 Critical Path, Inc. (NON) 8,763,600 3,284,350 EMC Corp. 198,908,447 1,040,000 E*Trade Group, Inc. 31,330,000 201,900 eBay Inc. 19,723,106 2,923,000 Electronic Data Systems Corp. (NON) 176,293,438 2,067,620 Misys PLC (United Kingdom) 18,338,973 446,900 RealNetworks, Inc. 34,104,056 866,100 USWeb Corp. (NON) 18,133,969 427,900 Verio Inc. (NON) 30,514,619 645,500 VeriSign, Inc. 47,847,688 1,635,200 Whittman-Hart, Inc. 41,391,000 -------------- 785,398,320 Computer Software (8.2%) - -------------------------------------------------------------------------------------------------------------------------- 1,031,300 Beyond.com Corp. 24,364,463 643,200 BMC Software, Inc. (NON) 34,652,400 340,000 BroadVision, Inc. (NON) 23,693,750 5,097,200 Computer Associates International, Inc. 233,834,050 1,288,800 Dell Computer Corp. 52,679,700 3,128,890 Electronic Arts, Inc. (AFF) 178,151,174 1,252,100 I2 Technologies, Inc. (NON) 38,502,075 565,100 Infoseek Corp. (NON) 21,509,119 1,161,529 Intuit, Inc. (NON) 95,027,591 333,600 ISS Group, Inc. 7,255,800 1,376,500 Lernout & Hauspie Speech Products N.V. (Belgium) 45,338,469 298,600 Lycos, Inc. 12,335,913 470,000 Macromedia, Inc. (NON) 16,391,250 7,566,700 Microsoft Corp. 649,317,444 6,639,600 Oracle Corp. 252,719,775 13,979,214 Parametric Technology Corp. (AFF) (NON) 197,456,398 1,150,000 Rational Software Corp. (NON) 38,381,250 885,000 Research in Motion Ltd. (Canada) (NON) 20,686,875 209,500 SAP AG (Germany) 69,721,830 623,000 Security First Technologies Corp. 21,727,125 323,300 Softbank Corp. (Japan) 87,553,944 1,902,454 Synopsys, Inc. (NON) 114,503,950 1,490,200 VERITAS Software Corp. 83,637,475 -------------- 2,319,441,820 Computers (1.3%) - -------------------------------------------------------------------------------------------------------------------------- 450,750 Gateway, Inc. (NON) 34,341,516 2,579,200 IBM Corp. 324,173,200 -------------- 358,514,716 Conglomerates (3.0%) - -------------------------------------------------------------------------------------------------------------------------- 1,426,900 Corning Inc. 99,883,000 6,835,200 Tyco International Ltd. 667,713,600 1,058,200 United Technologies Corp. 70,568,713 -------------- 838,165,313 Consumer Non Durables (0.1%) - -------------------------------------------------------------------------------------------------------------------------- 1,291,490 Luxottica Group S.P.A. ADR (Italy) 19,937,377 Consumer Services (0.2%) - -------------------------------------------------------------------------------------------------------------------------- 1,330,400 At Home Corp. 60,782,650 224,300 SportsLine USA, Inc. (NON) 5,130,863 -------------- 65,913,513 Cosmetics (--%) - -------------------------------------------------------------------------------------------------------------------------- 235,003 ThermoLase Corp. (NON) 558,132 Education (--%) - -------------------------------------------------------------------------------------------------------------------------- 432,400 ITT Educational Services, Inc. (NON) 9,729,000 Electric Utilities (0.2%) - -------------------------------------------------------------------------------------------------------------------------- 581,300 CalEnergy Co., Inc. 20,345,500 460,000 Montana Power Co. 31,136,250 -------------- 51,481,750 Electronic Components (1.9%) - -------------------------------------------------------------------------------------------------------------------------- 1,117,400 ASM Lithography Holding N.V. (Netherlands) 67,882,050 310,000 Broadcom Corp. 37,355,000 1,731,100 Jabil Circuit, Inc. 72,814,394 5,872,000 Metromedia Fiber Network, Inc. Class A 188,638,000 1,646,600 Rockwell International Corp. 96,840,663 80,900 STMicroelectronics N.V. ADR (France) 5,703,450 1,272,528 Waters Corp. 76,033,548 -------------- 545,267,105 Electronics and Electrical Equipment (5.1%) - -------------------------------------------------------------------------------------------------------------------------- 3,075,900 Applied Materials, Inc. (NON) 221,272,556 1,350,000 Celestica Inc. (Canada) (NON) 61,087,500 600,000 Flextronics International Ltd. 26,925,000 5,946,700 Motorola, Inc. 542,636,375 1,031,754 Sanmina Corp. (NON) 67,386,433 826,800 Sipex Corp. (NON) 13,590,525 1,403,672 Solectron Corp. 90,449,115 2,036,600 Sony Corp. (Japan) 259,578,877 1,080,600 Tandy Corp. 55,448,288 969,760 Teradyne, Inc. (NON) 72,307,730 2,038,800 Thermo Instrument Systems, Inc. (NON) 29,562,600 -------------- 1,440,244,999 Energy-Related (0.2%) - -------------------------------------------------------------------------------------------------------------------------- 2,492,300 Thermo Electron Corp. (NON) 42,836,406 Entertainment (0.9%) - -------------------------------------------------------------------------------------------------------------------------- 1,400,000 Harrah's Entertainment, Inc. (NON) 29,837,500 1,566,150 SFX Entertainment, Inc. Class A 70,183,097 1,030,700 Time Warner, Inc. 74,210,400 1,820,400 Viacom, Inc. Class B 76,343,025 -------------- 250,574,022 Financial Services (5.8%) - -------------------------------------------------------------------------------------------------------------------------- 1,714,100 American Express Co. 225,832,675 632,500 Capital One Financial Corp. 29,332,188 6,044,850 Citigroup, Inc. 269,373,628 3,675,877 Concord EFS, Inc. (NON) 125,209,560 2,493,100 Fannie Mae 172,023,900 2,034,300 Federal Home Loan Mortgage Corp. 116,717,963 992,700 Franklin Resources, Inc. 37,846,688 74,500 Goldman Sachs Group, Inc. (The) (NON) 4,791,281 448,100 Knight/Trimark Group, Inc. 18,876,213 2,380,300 MBNA Corp. 67,838,550 792,800 Morgan Stanley, Dean Witter, Discover and Co. 71,451,100 715,900 National Commerce Bancorporation 15,973,519 1,179,000 Providian Financial Corp. 107,289,000 4,064,200 Schwab (Charles) Corp. 179,078,813 3,108,042 TCF Financial Corp. 85,859,660 438,600 TD Waterhouse Group, Inc. (NON) 7,620,675 1,063,800 The Equitable Cos., Inc. 68,349,150 1,253,700 Wells Fargo Co. 48,894,300 -------------- 1,652,358,863 Food and Beverages (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 1,291,200 Coca-Cola Co. 77,875,500 Health Care Information Services (0.1%) - -------------------------------------------------------------------------------------------------------------------------- 226,900 Eclipsys Corp. (NON) 4,041,656 603,200 Medquist, Inc. (NON) 26,163,800 -------------- 30,205,456 Health Care Services (0.7%) - -------------------------------------------------------------------------------------------------------------------------- 514,300 CareMatrix Corp. (NON) 5,593,013 1,253,200 Lincare Holdings, Inc. (NON) 37,596,000 575,000 Sunrise Assisted Living, Inc. (NON) 17,357,813 346,300 TLC The Laser Center Inc. (Canada) (NON) 12,596,663 2,226,300 United Healthcare Corp. 135,804,300 -------------- 208,947,789 Insurance (2.2%) - -------------------------------------------------------------------------------------------------------------------------- 2,752,900 AFLAC Inc. 127,665,738 1,930,200 American General Corp. (NON) 149,349,225 1,245,650 American International Group, Inc. 144,651,106 919,600 CIGNA Corp. 81,097,225 522,900 Lincoln National Corp. 26,145,000 837,900 Progressive Corp. (The) 107,041,725 -------------- 635,950,019 Lodging (0.1%) - -------------------------------------------------------------------------------------------------------------------------- 2,905,783 Extended Stay America, Inc. (NON) 29,602,664 Medical Supplies and Devices (1.8%) - -------------------------------------------------------------------------------------------------------------------------- 600,000 Bausch & Lomb, Inc. 43,087,500 1,100,000 Biomet, Inc. 40,012,500 614,000 LifeCore Biomedical, Inc. (NON) 5,909,750 3,209,100 Medtronic, Inc. 231,255,769 1,161,500 Stryker Corp. 70,851,500 3,070,632 Sybron International Corp. (NON) 91,543,217 2,093,693 Thermo Cardiosystems, Inc. (AFF) (NON) 20,936,930 -------------- 503,597,166 Networking (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 796,500 CIENA Corp. (NON) 26,881,875 1,141,000 Entrust Technologies Inc. (NON) 34,230,000 194,700 Exodus Communications, Inc. 23,376,169 122,000 International Network Services 5,253,625 12,971 Juniper Networks, Inc. (NON) 2,106,977 -------------- 91,848,646 Networking Equipment (1.9%) - -------------------------------------------------------------------------------------------------------------------------- 4,498,000 ADC Telecommunications Inc. (NON) 200,161,000 4,192,700 Cisco Systems, Inc. 260,471,488 1,020,000 E-Tek Dynamics, Inc. (NON) 42,776,250 813,400 Network Appliance, Inc. 44,330,300 -------------- 547,739,038 Office Equipment (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 1,263,600 Avery Dennison Corp. 77,553,450 Oil and Gas (3.0%) - -------------------------------------------------------------------------------------------------------------------------- 1,637,500 Chevron, Inc. 149,421,875 5,137,400 Conoco, Inc. 133,893,488 3,014,600 Halliburton Co. 139,048,425 1,080,900 Mobil Corp. 110,522,025 527,100 Royal Dutch Petroleum Co. PLC ADR (Netherlands) 32,153,100 846,900 Schlumberger Ltd. 51,290,381 2,069,200 Unocal Corp. 82,121,375 3,781,700 Williams Cos., Inc. (NON) 159,067,756 -------------- 857,518,425 Packaging and Containers (0.4%) - -------------------------------------------------------------------------------------------------------------------------- 1,872,800 Sealed Air Corp. (NON) 120,327,400 Paper and Forest Products (0.6%) - -------------------------------------------------------------------------------------------------------------------------- 1,070,400 Westvaco Corp. 31,509,900 665,600 Weyerhaeuser Co. 43,056,000 2,452,600 Willamette Industries, Inc. 110,367,000 -------------- 184,932,900 Pharmaceuticals and Biotechnology (3.0%) - -------------------------------------------------------------------------------------------------------------------------- 3,147,000 American Home Products Corp. 160,497,000 4,633,706 Elan Corp. PLC ADR (Ireland) 134,667,081 1,884,222 Merck & Co., Inc. 127,538,277 4,103,293 Pharmacia & Upjohn, Inc. 220,808,455 437,800 QLT PhotoTherapeutics Inc. (Canada) (NON) 28,019,200 981,285 Sepracor, Inc. (NON) 72,124,448 280,000 Transkaryotic Therapies, Inc. (Malaysia) (NON) 9,975,000 1,250,921 Vertex Pharmaceuticals, Inc. (NON) 31,585,755 819,900 Warner-Lambert Co. 54,113,400 -------------- 839,328,616 Publishing (0.1%) - -------------------------------------------------------------------------------------------------------------------------- 106,100 Kadokawa Shoten Publishing Co., Ltd. (Japan) 24,284,267 Recreation (0.1%) - -------------------------------------------------------------------------------------------------------------------------- 394,800 International Speedway Corp. Class A 20,307,525 Restaurants (0.8%) - -------------------------------------------------------------------------------------------------------------------------- 9,433,737 J.D. Wetherspoon PLC (United Kingdom) 48,643,838 1,050,400 PizzaExpress PLC (United Kingdom) 12,731,596 5,297,711 Starbucks Corp. 123,171,781 1,264,800 Tricon Global Restaurants, Inc. (NON) 51,461,550 -------------- 236,008,765 Retail (8.5%) - -------------------------------------------------------------------------------------------------------------------------- 280,900 Ames Department Stores, Inc. (NON) 11,516,900 2,594,050 Bed Bath & Beyond, Inc. 88,035,572 6,275,700 Costco Companies, Inc. (NON) 469,108,575 2,085,340 CVS Corp. 103,745,665 4,098,157 Dollar Tree Stores, Inc. (AFF) (NON) 173,403,268 1,277,500 Federated Department Stores, Inc. (NON) 65,551,719 5,097,900 Home Depot, Inc. (The) 325,309,744 6,495,998 Kohls Corp. (NON) 494,101,848 990,900 Lowe's Cos., Inc. 52,269,975 1,919,637 Michaels Stores, Inc. (AFF) (NON) 55,909,428 7,123,600 TJX Cos., Inc. (The) 235,524,025 3,287,800 Wal-Mart Stores, Inc. 138,909,550 4,836,000 Walgreen Co. 136,919,250 1,437,340 Williams-Sonoma, Inc. 53,810,416 711,417 Yankee Candle Company, Inc. (The) (NON) 16,006,883 -------------- 2,420,122,818 Semiconductors (6.1%) - -------------------------------------------------------------------------------------------------------------------------- 1,150,000 Analog Devices, Inc. (NON) 49,593,750 2,129,500 Galileo International, Inc. 109,003,781 3,408,600 Intel Corp. 235,193,400 1,098,730 KLA Tencor Corp. (NON) 74,438,958 7,805,382 Linear Technology Corp. (AFF) 479,055,320 5,830,496 Maxim Integrated Products Inc. (NON) 373,516,150 1,258,000 PMC -- Sierra, Inc. 98,438,500 293,000 Rohm Co. Ltd. (Japan) 54,955,097 172,200 SDL, Inc. 11,698,838 1,094,700 Texas Instruments, Inc. 157,636,800 75,200 Vitesse Semiconductor Corp. (NON) 4,803,400 1,608,000 Xilinx, Inc. 100,299,000 -------------- 1,748,632,994 Telecommunications (6.6%) - -------------------------------------------------------------------------------------------------------------------------- 1,004,500 Allegiance Telecom, Inc. (NON) 50,538,906 1,414,700 Amdocs Ltd. 37,666,388 150,000 Copper Mountain Networks, Inc. (NON) 18,150,000 1,012,500 Covad Communications Group 144A 46,575,000 933,900 General Instrument Corp. (NON) 42,375,713 798,869 Global Crossing Ltd. 33,153,064 4,518,866 Global TeleSystems Group, Inc. 144,038,854 195,900 Hikari Tsushin, Inc. (Japan) 82,145,509 713,610 JDS Uniphase Corp. 64,492,504 4,264,500 Lucent Technologies, Inc. 277,459,031 3,267,500 MCI WorldCom, Inc. (NON) 269,568,750 1,185,800 NTL Inc. (NON) 123,174,975 7,688,050 Orange PLC ADR (United Kingdom) 122,230,827 1,992,400 Oy Nokia AB Class A, (Finland) 172,697,446 1,531,000 QUALCOMM, Inc. 238,836,000 4,332,300 Telefonaktiebolaget LM Ericsson Class B, (Sweden) 141,362,558 --------------- 1,864,465,525 Telephone Services (8.2%) - -------------------------------------------------------------------------------------------------------------------------- 33,828,751 AT&T Corp. 1,251,663,787 890,000 Frontier Corp. 49,339,375 1,434,890 Intermedia Communications, Inc. (NON) 39,549,156 3,649,200 McLeod USA, Inc. Class A 108,791,775 1,648,095 NEXTLINK Communications, Inc. Class A (NON) 184,792,652 500,000 RSL Communications, Ltd. Class A 8,562,500 3,319,400 SBC Communications, Inc. 189,828,188 8,273,200 Sprint Corp. (NON) 427,621,025 1,160,000 WinStar Communications. Inc. (NON) 60,900,000 --------------- 2,321,048,458 Transportation (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 1,806,900 FDX Corp. 80,971,706 Wireless Communications (1.8%) - -------------------------------------------------------------------------------------------------------------------------- 5,058,400 American Tower Corp. Class A (NON) 117,291,650 399,400 Pinnacle Holdings Inc. (NON) 9,860,188 587,400 RF Micro Devices, Inc. 44,899,388 3,063,600 Sprint PCS 185,730,750 728,700 Vodafone AirTouch PLC (United Kingdom) 153,391,067 --------------- 511,173,043 --------------- Total Common Stocks (cost $18,957,865,672) $27,523,904,018 SHORT-TERM INVESTMENTS (3.3%) (a) PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------------------------------------------------------------------- $45,000,000 American General Finance Corp. effective yield of 5.09%, September 27, 1999 $ 44,637,338 50,000,000 Bank of America Corp. effective yield of 5.12%, September 21, 1999 49,637,331 50,778,000 Contifinancial Corp. effective yield of 5.2%, August 18, 1999 50,653,312 50,300,000 Corporate Receivables Corp. effective yield of 5.11%, September 9, 1999 50,021,548 50,000,000 Eureka Securitization Inc. effective yield of 5.11%, August 16, 1999 49,893,542 50,000,000 Federal Home Loan Mortgage Corp. effective yield of 4.925%, September 15, 1999 49,691,250 50,000,000 Ford Motor Credit Corp. effective yield of 5.08%, August 27, 1999 49,816,556 50,000,000 General Electric Capital Corp. effective yield of 5.03%, August 23, 1999 49,844,167 45,000,000 International Business Machines Corp. effective yield of 5.08%, August 12, 1999 44,930,150 50,000,000 J. P. Morgan & Co., Inc. effective yield of 4.94%, August 9, 1999 49,945,111 59,695,000 Preferred Receivables Funding Corp. effective yield of 5.1%, August 17, 1999 59,559,691 50,000,000 Shell Finance effective yield of 5.11%, August 5, 1999 49,971,611 24,750,000 Sigma Finance Inc. effective yield of 4.82%, August 19, 1999 24,690,353 30,000,000 Sigma Finance Inc. effective yield of 4.86%, October 19, 1999 29,652,325 30,000,000 USAA Capital Corp. effective yield of of 4.78%, August 27, 1999 29,896,433 50,000,000 Windmill Funding Corp. effective yield of 5.13%, August 5, 1999 49,971,500 78,282,000 Interest in $600,000,000 joint repurchase agreement dated July 30, 1999 with Goldman Sachs & Co. due August 2, 1999 with respect to various U. S. Treasury obligations -- maturity value $78,314,944 for an effective yield of 5.05% 78,282,000 131,718,000 Interest in $500,000,000 joint repurchase agreement dated July 30, 1999 with Lehman Brothers Inc. due August 2, 1999 with respect to various U. S. Treasury obligations -- maturity value $131,773,431 for an effective yield of 5.05% 131,718,000 --------------- Total Short-Term Investments (cost $942,812,218) $ 942,812,218 - -------------------------------------------------------------------------------------------------------------------------- Total Investments (cost $19,900,677,890) (b) $28,466,716,236 - -------------------------------------------------------------------------------------------------------------------------- (a) Percentages indicated are based on net assets of $28,411,633,847. (b) The aggregate identified cost on a tax basis is $19,970,428,462, resulting in gross unrealized appreciation and depreciation of $9,168,276,879 and $671,989,105, respectively, or net unrealized appreciation of $8,496,287,774. (NON) Non-income-producing security. (AFF) Affiliated Companies (Note 5). 144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities on deposit with a domestic custodian bank. - ------------------------------------------------------------------------------- Forward Currency Contracts to Sell at July 31, 1999 Market Aggregate Face Delivery Unrealized Value Value Date Depreciation - ------------------------------------------------------------------------------- Japanese Yen $17,068,439 $16,548,042 9/16/99 $(520,397) - ------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities July 31, 1999 Assets - ----------------------------------------------------------------------------------------------- Investments in securities, at value (identified cost $19,900,677,890) (Note 1) $28,466,716,236 - ----------------------------------------------------------------------------------------------- Cash 166,765 - ----------------------------------------------------------------------------------------------- Foreign currency (cost $7,168,389) 6,616,138 - ----------------------------------------------------------------------------------------------- Dividends and interest and other receivables 6,525,596 - ----------------------------------------------------------------------------------------------- Receivable for shares of the fund sold 135,101,521 - ----------------------------------------------------------------------------------------------- Receivable for securities sold 217,680,624 - ----------------------------------------------------------------------------------------------- Total assets 28,832,806,880 Liabilities - ----------------------------------------------------------------------------------------------- Payable for securities purchased 250,864,805 - ----------------------------------------------------------------------------------------------- Payable for shares of the fund repurchased 117,898,515 - ----------------------------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 33,279,356 - ----------------------------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 5,054,425 - ----------------------------------------------------------------------------------------------- Payable for compensation of Trustees (Note 2) 480,385 - ----------------------------------------------------------------------------------------------- Payable for administrative services (Note 2) 21,721 - ----------------------------------------------------------------------------------------------- Payable for distribution fees (Note 2) 11,475,549 - ----------------------------------------------------------------------------------------------- Payable for open forward currency contracts 520,397 - ----------------------------------------------------------------------------------------------- Other accrued expenses 1,577,880 - ----------------------------------------------------------------------------------------------- Total liabilities 421,173,033 - ----------------------------------------------------------------------------------------------- Net assets $28,411,633,847 Represented by - ----------------------------------------------------------------------------------------------- Paid-in capital (Notes 1 and 4) $17,082,901,505 - ----------------------------------------------------------------------------------------------- Undistributed net investment income 520,397 - ----------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions (Note 1) 2,763,494,871 - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 8,564,717,074 - ----------------------------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $28,411,633,847 Computation of net asset value and offering price - ----------------------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($17,180,287,753 divided by 708,378,589 shares) $24.25 - ----------------------------------------------------------------------------------------------- Offering price per class A share (100/94.25 of $24.25)* $25.73 - ----------------------------------------------------------------------------------------------- Net asset value and offering price per class B share ($8,433,130,821 divided by 373,570,664 shares)** $22.57 - ----------------------------------------------------------------------------------------------- Net asset value and offering price per class C share ($821,995 divided by 33,891 shares)** $24.25 - ----------------------------------------------------------------------------------------------- Net asset value and redemption price per class M share ($390,975,269 divided by 16,559,253 shares) $23.61 - ----------------------------------------------------------------------------------------------- Offering price per class M share (100/96.50 of $23.61)* $24.47 - ----------------------------------------------------------------------------------------------- Net asset value, offering price and redemption price per class Y share ($2,406,418,009 divided by 97,481,163 shares) $24.69 - ----------------------------------------------------------------------------------------------- * On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales, the offering price is reduced. ** Redemption price per share is equal to net asset value less any applicable contingent sales charge. The accompanying notes are an integral part of these financial statements.
Statement of operations Year ended July 31, 1999 Investment income: - ----------------------------------------------------------------------------------------------- Dividends (net of foreign tax of $1,330,286) (including dividend income of $3,050,382 from investments in affiliated issuers) (Note 5) $ 116,398,115 - ----------------------------------------------------------------------------------------------- Interest 40,971,529 - ----------------------------------------------------------------------------------------------- Total investment income 157,369,644 Expenses: - ----------------------------------------------------------------------------------------------- Compensation of Manager (Note 2) 117,055,103 - ----------------------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 36,743,243 - ----------------------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 398,012 - ----------------------------------------------------------------------------------------------- Administrative services (Note 2) 63,007 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 37,789,892 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 76,530,540 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class C (Note 2) 51 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 2,586,337 - ----------------------------------------------------------------------------------------------- Reports to shareholders 354,884 - ----------------------------------------------------------------------------------------------- Registration fees 1,040,800 - ----------------------------------------------------------------------------------------------- Auditing 57,930 - ----------------------------------------------------------------------------------------------- Legal 134,258 - ----------------------------------------------------------------------------------------------- Postage 2,912,842 - ----------------------------------------------------------------------------------------------- Other 2,528,615 - ----------------------------------------------------------------------------------------------- Total expenses 278,195,514 - ----------------------------------------------------------------------------------------------- Expense reduction (Note 2) (4,115,634) - ----------------------------------------------------------------------------------------------- Net expenses 274,079,880 - ----------------------------------------------------------------------------------------------- Net investment loss (116,710,236) - ----------------------------------------------------------------------------------------------- Net realized gain on investments (Notes 1, 3 and 5) (including realized gain of $4,426,259 on sales of investments in affiliated issuers) 3,127,565,011 - ----------------------------------------------------------------------------------------------- Net realized gain on foreign currency transactions (Note 1) 684,004 - ----------------------------------------------------------------------------------------------- Net unrealized depreciation of assets and liabilities in foreign currencies during the year (1,309,341) - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of investments during the year 2,080,087,054 - ----------------------------------------------------------------------------------------------- Net gain on investments 5,207,026,728 - ----------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $5,090,316,492 - ----------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets Year ended July 31 ------------------------------- 1999 1998 - --------------------------------------------------------------------------------------------------------------- Increase in net assets - --------------------------------------------------------------------------------------------------------------- Operations: - --------------------------------------------------------------------------------------------------------------- Net investment loss $ (116,710,236) $ (88,429,562) - --------------------------------------------------------------------------------------------------------------- Net realized gain on investments and foreign currency transactions 3,128,249,015 2,303,218,869 - --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 2,078,777,713 891,370,340 - --------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 5,090,316,492 3,106,159,647 - --------------------------------------------------------------------------------------------------------------- Distributions to shareholders: - --------------------------------------------------------------------------------------------------------------- From net realized gain on investments Class A (1,042,857,172) (699,467,888) - --------------------------------------------------------------------------------------------------------------- Class B (569,436,634) (385,798,466) - --------------------------------------------------------------------------------------------------------------- Class M (25,276,938) (15,960,864) - --------------------------------------------------------------------------------------------------------------- Class Y (106,713,548) (73,039,295) - --------------------------------------------------------------------------------------------------------------- Increase from capital share transactions (Note 4) 2,148,949,675 2,892,368,485 - --------------------------------------------------------------------------------------------------------------- Total increase in net assets 5,494,981,875 4,824,261,619 Net assets - --------------------------------------------------------------------------------------------------------------- Beginning of year 22,916,651,972 18,092,390,353 - --------------------------------------------------------------------------------------------------------------- End of year (including undistributed net investment income of $520,397 and $--, respectively) $28,411,633,847 $22,916,651,972 - --------------------------------------------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------------------------------------------------------------ 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $21.36 $19.49 $15.73 $14.42 $11.19 - ------------------------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) (.05)(c) (.04)(c) --(c) (.02)(c) .02 - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments 4.53 3.12 4.85 2.19 3.72 - ------------------------------------------------------------------------------------------------------------------------------------ Total from investment operations 4.48 3.08 4.85 2.17 3.74 - ------------------------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------------------------ From net realized gain on investments (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $24.25 $21.36 $19.49 $15.73 $14.42 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) 22.40 16.83 32.22 15.49 34.72 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $17,180,288 $13,854,611 $11,158,273 $7,332,248 $4,895,180 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .90 .96 1.02 1.03 1.07 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) (.25) (.20) -- (.10) .17 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43 - ------------------------------------------------------------------------------------------------------------------------------------ + Commencement of operations. * Not annualized. (a) Total 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) 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 - ------------------------------------------------------------------------------------------------------------------------------------ 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $20.14 $18.57 $15.15 $14.01 $10.97 - ------------------------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) (.21)(c) (.18)(c) (.12)(c) (.13)(c) (.06) - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments 4.23 2.96 4.63 2.13 3.61 - ------------------------------------------------------------------------------------------------------------------------------------ Total from investment operations 4.02 2.78 4.51 2.00 3.55 - ------------------------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------------------------ From net realized gain on investments (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $22.57 $20.14 $18.57 $15.15 $14.01 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) 21.43 16.02 31.17 14.70 33.65 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $8,433,131 $7,263,280 $5,664,375 $3,405,318 $1,870,370 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) 1.65 1.71 1.77 1.78 1.82 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) (1.00) (.95) (.75) (.85) (.58) - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43 - ------------------------------------------------------------------------------------------------------------------------------------ + Commencement of operations. * Not annualized. (a) Total 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) 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 C - ------------------------------------------------------------------------------------------------------------------------------------ For the period Per-share July 26, 1999+ operating performance to July 31 - ------------------------------------------------------------------------------------------------------------------------------------ 1999 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $24.64 - ------------------------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (.39) - ------------------------------------------------------------------------------------------------------------------------------------ Total from investment operations (.39) - ------------------------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------------------------ From net realized gain on investments -- - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions -- - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $24.25 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) (1.58)* - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $822 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .03* - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) (.02)* - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 85.05 - ------------------------------------------------------------------------------------------------------------------------------------ + Commencement of operations. * Not annualized. (a) Total 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) 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 - ------------------------------------------------------------------------------------------------------------------------------------ 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $20.93 $19.22 $15.60 $14.37 $11.79 - ------------------------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) (.16)(c) (.14)(c) (.08)(c) (.09)(c) (.01) - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments 4.43 3.06 4.79 2.18 3.10 - ------------------------------------------------------------------------------------------------------------------------------------ Total from investment operations 4.27 2.92 4.71 2.09 3.09 - ------------------------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------------------------ From net realized gain on investments (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $23.61 $20.93 $19.22 $15.60 $14.37 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) 21.83 16.21 31.57 14.97 27.42* - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $390,975 $322,277 $208,656 $87,782 $19,004 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) 1.40 1.46 1.52 1.50 1.06* - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) (.75) (.69) (.50) (.57) (.24)* - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43 - ------------------------------------------------------------------------------------------------------------------------------------ + Commencement of operations. * Not annualized. (a) Total 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) 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 - ------------------------------------------------------------------------------------------------------------------------------------ Per-share operating performance Year ended July 31 - ------------------------------------------------------------------------------------------------------------------------------------ 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $21.66 $19.70 $15.85 $14.48 $11.22 - ------------------------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (loss) --(c) .01(c) .04(c) .02(c) .03 - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments 4.62 3.16 4.90 2.21 3.74 - ------------------------------------------------------------------------------------------------------------------------------------ Total from investment operations 4.62 3.17 4.94 2.23 3.77 - ------------------------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------------------------ From net realized gain on investments (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions (1.59) (1.21) (1.09) (.86) (.51) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $24.69 $21.66 $19.70 $15.85 $14.48 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) 22.75 17.12 32.56 15.85 34.90 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $2,406,418 $1,476,485 $1,061,087 $709,595 $351,817 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .65 .71 .77 .77 .83 - ------------------------------------------------------------------------------------------------------------------------------------ Ratio of net investment income (loss) to average net assets (%) -- .06 .25 .15 .39 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 85.05 60.04 59.77 57.92 65.43 - ------------------------------------------------------------------------------------------------------------------------------------ + Commencement of operations. * Not annualized. (a) Total 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) 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, 1999 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 C, class M and class Y shares. The fund began offering class C shares on July 26, 1999. 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 approximately eight years, do not pay a front-end sales charge but pay a higher ongoing distribution fee than class A shares, and are subject to a contingent deferred sales charge, if those shares are redeemed within six years of purchase Class C shares are subject to the same fees and expenses as class B shares, except that class C shares have a one year 1.00% contingent deferred sales charge and do not convert to class A shares. 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 and class C shares. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A shares, class B shares, class C shares, and class M shares, but do not bear a distribution fee. Class Y shares are sold to defined contribution plans that invest at least $150 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 consistently 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, Inc. 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. Collateral for certain tri-party repurchase agreements is held at the counterparty's custodian in a segregated account for the benefit of the fund and the counterparty. 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. Discounts on original issue discount bonds are accreted according to the yield-to-maturity basis. 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 gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies and the difference between the amount of investment income and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. F) Forward currency contracts The fund may engage in forward currency contracts which are agreements between two parties to buy and sell currencies at a set price on a future date, to protect against a decline in value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of a currency in which securities a fund intends to buy are denominated, when a fund holds cash reserves and short-term investments). The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is "marked to market" daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. G) Line of credit The fund has entered into a committed line of credit with certain banks. This line of credit agreement includes restrictions that the fund maintain an asset coverage ratio of at least 300% and borrowings must not exceed prospectus limitations. For the year ended July 31, 1999, the fund had no borrowings against the line of credit. H) 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, as amended. 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. I) 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 temporary and permanent differences of losses on wash sale transactions, foreign currency gains and losses, book accretion/amortization and net operating losses. 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, 1999, the fund reclassified $117,230,633 to decrease accumulated net investment loss and $88,508,811 to increase paid-in-capital, with a decrease to accumulated net realized gains of $205,739,444. 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, and 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, 0.43% of the next $5 billion, 0.42% of the next $5 billion, 0.41% of the next $5 billion, 0.40% of the next $5 billion, and 0.39% thereafter. Prior to February 1, 1999, the management fees were as follows, 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% thereafter. The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. Custodial functions for the fund's assets are provided by Putnam Fiduciary Trust Company (PFTC), a 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, 1999, fund expenses were reduced by $4,115,634 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. Each Trustee of the fund receives an annual Trustee fee, of which $8,961 has been allocated to the fund, 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 "Deferral Plan") which allows the Trustees to defer the receipt of all or a portion of Trustees Fees payable on or after July 1, 1995. The deferred fees remain in the fund and are invested in certain Putnam funds until distribution in accordance with the Deferral Plan. The fund has adopted an unfunded noncontributory defined benefit pension plan (the "Pension Plan") covering all Trustees of the fund who have served as 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, class C 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%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C and class M shares, respectively. The Trustees have approved payment by the fund to an annual rate of 0.25%, 1.00% and 1.00% and 0.75% of the average net assets attributable to class A, class B, class C and class M shares respectively. For the year ended July 31, 1999, Putnam Mutual Funds Corp., acting as underwriter received net commissions of $5,270,995 and $126,536 from the sale of class A and class M shares, respectively and received $9,969,527 and no monies in contingent deferred sales charges from redemptions of class B and class C shares, respectively. A deferred sales charge of up to 1% is assessed on certain redemptions of class A shares. For the year ended July 31, 1999, Putnam Mutual Funds Corp., acting as underwriter received $133,652 on class A redemptions. Note 3 Purchase and sales of securities During the year ended July 31, 1999, purchases and sales of investment securities other than short-term investments aggregated $20,783,404,098 and $20,482,538,866, 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, 1999, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Year ended July 31, 1999 - ----------------------------------------------------------------------------- Class A Shares Amount - ----------------------------------------------------------------------------- Shares sold 200,358,574 $4,408,201,255 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 49,587,295 1,006,126,012 - ----------------------------------------------------------------------------- 249,945,869 5,414,327,267 Shares repurchased (190,131,808) (4,190,827,089) - ----------------------------------------------------------------------------- Net increase 59,814,061 $1,223,500,178 - ----------------------------------------------------------------------------- Year ended July 31, 1998 - ----------------------------------------------------------------------------- Class A Shares Amount - ----------------------------------------------------------------------------- Shares sold 171,955,043 $3,517,913,589 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 37,008,241 676,509,789 - ----------------------------------------------------------------------------- 208,963,284 4,194,423,378 Shares repurchased (132,964,406) (2,708,486,833) - ----------------------------------------------------------------------------- Net increase 75,998,878 $1,485,936,545 - ----------------------------------------------------------------------------- Year ended July 31, 1999 - ----------------------------------------------------------------------------- Class B Shares Amount - ----------------------------------------------------------------------------- Shares sold 80,109,234 $1,644,300,567 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 27,943,081 530,078,393 - ----------------------------------------------------------------------------- 108,052,315 2,174,378,960 Shares repurchased (95,145,441) (1,953,712,771) - ----------------------------------------------------------------------------- Net increase 12,906,874 $ 220,666,189 - ----------------------------------------------------------------------------- Year ended July 31, 1998 - ----------------------------------------------------------------------------- Class B Shares Amount - ----------------------------------------------------------------------------- Shares sold 87,432,869 $ 1,694,803,885 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 20,772,542 359,571,774 - ----------------------------------------------------------------------------- 108,205,411 2,054,375,659 Shares repurchased (52,505,238) (1,023,763,961) - ----------------------------------------------------------------------------- Net increase 55,700,173 $ 1,030,611,698 - ----------------------------------------------------------------------------- For the period July 26, 1999 (commencement of operations) to July 31, 1999 - ----------------------------------------------------------------------------- Class C Shares Amount - ----------------------------------------------------------------------------- Shares sold 33,891 $829,273 Shares issued in connection with reinvestment of distributions -- -- - ----------------------------------------------------------------------------- 33,891 829,273 Shares repurchased -- -- - ----------------------------------------------------------------------------- Net increase 33,891 $829,273 - ----------------------------------------------------------------------------- Year ended July 31, 1999 - ----------------------------------------------------------------------------- Class M Shares Amount - ----------------------------------------------------------------------------- Shares sold 6,906,639 $ 148,886,198 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,234,352 24,453,377 - ----------------------------------------------------------------------------- 8,140,991 173,339,575 Shares repurchased (6,976,351) (150,450,227) - ----------------------------------------------------------------------------- Net increase 1,164,640 $ 22,889,348 - ----------------------------------------------------------------------------- Year ended July 31, 1998 - ----------------------------------------------------------------------------- Class M Shares Amount - ----------------------------------------------------------------------------- Shares sold 7,899,365 $158,011,193 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 842,975 15,156,766 - ----------------------------------------------------------------------------- 8,742,340 173,167,959 Shares repurchased (4,204,444) (84,838,578) - ----------------------------------------------------------------------------- Net increase 4,537,896 $ 88,329,381 - ----------------------------------------------------------------------------- Year ended July 31, 1999 - ----------------------------------------------------------------------------- Class Y Shares Amount - ----------------------------------------------------------------------------- Shares sold 45,348,130 $1,048,260,384 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 5,176,001 106,713,548 - ----------------------------------------------------------------------------- 50,524,131 1,154,973,932 Shares repurchased (21,197,444) (473,909,245) - ----------------------------------------------------------------------------- Net increase 29,326,687 $ 681,064,687 - ----------------------------------------------------------------------------- Year ended July 31, 1998 - ----------------------------------------------------------------------------- Class Y Shares Amount - ----------------------------------------------------------------------------- Shares sold 24,981,685 $ 517,221,628 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 3,945,937 73,039,295 - ----------------------------------------------------------------------------- 28,927,622 590,260,923 Shares repurchased (14,640,061) (302,770,062) - ----------------------------------------------------------------------------- Net increase 14,287,561 $ 287,490,861 - -----------------------------------------------------------------------------
Note 5 Transactions with Affiliated Issuers Transactions during the year with companies in which the fund owned at least 5% of the voting securities were as follows: Purchase Sales Dividend Market Affiliates cost cost Income Value - ------------------------------------------------------------------------------------------------------- Name of affiliate - ------------------------------------------------------------------------------------------------------- Dollar Tree Stores $ 7,255,931 $ 10,569,079 $ -- $ 173,403,268 Electronic Arts -- -- -- 178,151,174 Linear Technology Corp. 77,218,050 19,769,903 849,773 479,055,320 Luxottica Group SPA ADR 4,596,596 45,983,670 425,734 -- Michaels Stores Inc. 12,937,855 -- -- 55,909,428 National Oilwell, Inc. 2,383,878 104,860,933 -- -- Network Solutions Inc. Class A 64,587,526 64,587,526 -- -- Office Depot Inc. 20,047,719 211,488,119 -- -- OfficeMax, Inc. -- 103,598,641 -- -- Parametric Technology Corp. 90,383,540 46,092,981 -- 197,456,398 Serco Group PLC 26,267,955 -- 338,934 81,769,083 Starbucks Corp. 83,144,567 57,818,539 -- -- Telecom-TCI Ventures Group Class A 20,502,393 -- -- -- Thermo Cardio Systems, Inc. 1,034,073 14,945,446 -- 20,936,930 WestWood One, Inc. -- -- -- 75,310,625 Wolters Kluwer CTF 33,499,898 145,109,894 1,435,941 -- - -------------------------------------------------------------------------------------------------------- Totals $443,859,981 $824,824,731 $3,050,382 $1,261,992,226
Federal tax information (Unaudited) Pursuant to Section 852 of the Internal Revenue Code, as amended, the Fund hereby designates $2,904,913,324 as a capital gain, for its taxable year ended July 31, 1999. The fund has designated 77.80% of the distributions from net investment income as qualifying for the dividends received deduction for corporations. The Form 1099 you receive in January 2000 will show the tax status of all distributions paid to your account in calendar 1999. Fund information WEB SITE www.putnaminv.com 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 PricewaterhouseCoopers LLP TRUSTEES George Putnam, Chairman William F. Pounds, Vice Chairman John A. Hill, Vice Chairman Jameson Adkins Baxter Hans H. Estin Ronald J. Jackson Paul L. Joskow Elizabeth T. Kennan Lawrence J. Lasser John H. Mullin III Robert E. Patterson George Putnam, III A.J.C. Smith W. Thomas Stephens 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 Roland W. Gillis Vice President and Fund Manager Charles H. Swanberg Vice President and Fund Manager Robert R. Beck Vice President and Fund Manager Michael Stack Vice President and Fund Manager Richard A. Monaghan Vice President John R. Verani Vice President 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' Web site: 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 the 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 - --------------------- For account balances, economic forecasts, and the latest on Putnam funds, visit www.putnaminv.com AN016-54549 007/883/530/516 9/99 PUTNAM INVESTMENTS [SCALE LOGO OMITTED} - ---------------------------------------------------------------------------- Putnam Voyager Fund Supplement to Annual Report dated 7/31/99 The following information has been prepared to provide class Y shareholders with a performance overview specific to their holdings. Class Y shares are offered exclusively to defined contribution plans investing $150 million or more in one or more of Putnam's funds or private accounts. Performance of class Y shares, which incur neither a front-end load, distribution fee, nor contingent deferred sales charge, will differ from performance of class A, B, C, and M shares, which are discussed more extensively in the annual report. ANNUAL RESULTS AT A GLANCE - ---------------------------------------------------------------------------- Total return for periods ended 7/31/99 NAV 1 year 22.75% 5 years 197.83 Annual average 24.39 10 years 455.76 Annual average 18.71 Life of fund (since class A inception, 4/1/69) Annual average 14.57 - ---------------------------------------------------------------------------- Share value: NAV 7/31/98 $21.66 7/31/99 $24.69 - ---------------------------------------------------------------------------- Distributions: No. Income Capital gains Total 1 $0.000 1.585 $1.585 - ---------------------------------------------------------------------------- Please note that past performance does not indicate future results. More recent returns may be more or less than those shown. Returns shown for class Y shares for periods prior to their inception are derived from the historical performance of class A shares, adjusted to reflect the initial sales charge currently applicable to class A shares. These returns have not been adjusted to reflect differences in operating expenses which, for class Y shares, are lower than the operating expenses applicable to class A shares. All returns assume reinvestment of distributions at net asset value. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. See full report for information on comparative benchmarks. If you have questions, please consult your fund prospectus or call Putnam toll free at 1-800-752-9894. -----END PRIVACY-ENHANCED MESSAGE-----