-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZLRxp/EUiWaznaYy4F0F55jyr2/eIldnc9uE6eo8+hDDNdJocsVfKqDwGhkoavQ6 kBzGoqU1NKAN6OuvLMm6FQ== 0000865177-94-000002.txt : 19940302 0000865177-94-000002.hdr.sgml : 19940302 ACCESSION NUMBER: 0000865177-94-000002 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM NEW OPPORTUNITIES FUND CENTRAL INDEX KEY: 0000865177 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 043091455 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: 40 SEC FILE NUMBER: 811-06128 FILM NUMBER: 94513475 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: A6 ZIP: 02109 BUSINESS PHONE: 6172921000 N-30D 1 SEMI-ANNUAL REPORT (logo) Putnam New Opportunities Fund Semiannual Report December 31, 1993 (artwork) For investors seeking long-term capital appreciation primarily through common stock investments in companies in economic sectors with above-average long-term growth potential A member of the Putnam Family of Funds Contents 2 How your fund performed 3 From the Chairman 4 Report from Putnam Management Semiannual Report 7 Portfolio of investments owned 11 Financial statements 19 Fund performance supplement How your fund performed For periods ended December 31, 1993 Total return* Fund Lipper Class A Class B Growth NAV POP NAV CDSC Fund Index 6 months 20.59% 13.66% 20.14% 15.14% 7.13% 1 year 32.69 25.09 14.18 Life-of-class+ (class A shares)209.29 191.54 -- -- 69.50 annualized 40.22 37.76 -- -- 17.12 (class B shares) -- -- 40.70 35.70 13.33 Share data Class A Class B NAV POP NAV June 30, 1993 $20.83 $22.10 $20.80 December 31, 1993 $24.66 $26.16 $24.53 Distributions 6 months ended Investment Short-termLong-term December 31, 1993 Number income capital gainscapital gains Total Class A shares 1 -- $0.047 $0.400 $0.447 Class B shares 1 -- $0.047 $0.400 $0.447 *Performance data represent past results. Investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. +The fund began operations August 31, 1990, offering shares now known as class A shares. Effective March 1, 1993, the fund began offering class B shares. Performance for each share class will differ. Terms you need to know Total return is the change in value of an investment from the beginning to the end of a period, assuming the reinvestment of all distributions. It may be shown at net asset value or public offering price. Net asset value (NAV) is the value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares, not reflecting any 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. Contingent deferred sales charge (CDSC) is a charge applied at the time of the redemption of shares rather than the time of purchase. It generally declines and eventually disappears over a stated period. Class A shares are the shares of your fund offered subject to an initial sales charge. Your fund's POP includes the maximum 5.75% sales charge. Class B shares are the shares of your fund offered with no initial sales charge. Within the first six years of purchase, they are subject to a CDSC declining from 5% to 1%. After the sixth year, the CDSC no longer applies. Please see the fund performance supplement on page 19 for additional information about performance comparisons. From the Chairman (photograph of George Putnam) (c) Karsh, Ottawa George Putnam Chairman of the Trustees Dear Shareholder: Putnam New Opportunities Fund is off to a very strong start for fiscal 1994, adding to its successful track record and garnering praise from numerous industry sources along the way. During the semiannual period ended December 31, 1993, the fund posted returns of over 20% at net asset value for both class A and class B shares. According to Lipper Analytical Services, an independent research firm, the fund's total returns place it among the top 1% of funds with similar objectives for every time period tracked during the life of the fund. The competition for this honor ranges from 265 funds tracked for the three years ended December 31, 1993, to 395 funds tracked year-to-date. As they have done since the fund's start of operations in 1990, Portfolio Manager Dan Miller and his team of analysts achieved these results by first targeting market sectors that Putnam Management believes hold the greatest growth potential, given the current economic, investment and political environment. Then, they work to identify promising companies within each sector. In the Report from Putnam Management that follows, Dan explains the key trends within each sector during the period, as well as the strategies he employed to capitalize on those trends. While the fund's focus on emerging companies in fast-growing sectors of the economy can lead to significant short-term price fluctuations, we believe that the potential for superior total returns over time amply rewards those investors willing to accept this risk. As the fund enters the second half of fiscal 1994, we expect its unique strategy, combined with the strength and depth of Putnam's equity research, to lead to continued success. Respectfully yours, George Putnam February 16, 1994 Report from Putnam Management Top 10 holdings (12/31/93)* Hospitality Franchise Systems, Inc. Liberty Media Corp. Class A Wellfleet Communications, Inc. Cisco Systems, Inc. Robert Half International, Inc. DF&R Restaurants, Inc. Elan Corp., PLC ADS Clinicom, Inc. ALC Communicators Corp. Zoll Medical Corp. *Reflects 15.9% of the total portfolio, based on net assets. Putnam New Opportunities Fund invests in promising, quality companies within selected market sectors where we believe the greatest growth potential exists. This strategy has led to enviable returns, both within the recently ended semiannual period and the past twelve months, as well as over the life of the fund. Although past performance is no guarantee of future results, notable third-party recognition during the year included many well-known mutual fund rating agencies and investment industry publications: The fund's six-month total returns of 20.59% for class A shares and 20.14% for class B shares, both at net asset value, nearly doubled the 10.48% return of the NASDAQ Industrials Index, an unmanaged measure of over-the-counter stocks. In addition, the fund's returns more than quadrupled the 4.95% earned by the broader-based Standard and Poor's 500 Index(trade mark). Morningstar has awarded the fund five stars -- the highest rating available -- for every two-week period from the fund's initial rating on October 1, 1993, through January 21, 1994. The ratings are based on risk-adjusted 3-year total returns and include the effects of sales charges. The January issues of Money and Your Money magazines both included the fund in their listings of the top 10 stock funds based on 1- and 3-year total returns, not including sales charges. New sector introduced The dynamics of today's economic, demographic and political climates have led us to identify a seventh investment sector that we believe is poised for above-average growth -- personal financial services. Representing 4.2% of the portfolio at the end of the period, this sector is likely to benefit from the baby boomer generation reaching its peak income and savings years. Dissatisfaction with the low interest rates offered by traditional bank products, coupled with the growing realization that employee-sponsored retirement plans alone will not support a healthy retirement, have turned millions of savers into investors, further fueling growth in this sector. Because companies in this sector -- exemplified by life insurance, supplemental health insurance and mutual fund companies -- tend to be more conservative and experience slower growth than those in our other targeted sectors, the personal financial services sector is expected to play a relatively small role in the fund's portfolio. We expect its primary benefit to be additional diversification. Investment sector recap Shifts in sector allocations have not been drastic over the past six months, with the largest changes in emphasis coming in the applied/advanced technology and the medical technology/cost containment areas. As the health care debate wears on, medical technology/cost containment has remained one of the portfolio's largest sectors. New purchases boosted this sleeve from 18.0% to 21.6% of the portfolio during the period to become the fund's largest area of concentration. The sector's holdings represent companies we have identified as likely beneficiaries of health care reform. We were able to purchase these stocks at attractive prices because, in our opinion, the majority of investors have not reached the same level of understanding on the potential outcome of reform. The size of our media/entertainment allocation was virtually unchanged during the period, although we have sold some holdings. Having identified the growth potential of this sector more than three years ago, we were able to realize profits here as the rest of the market recently "discovered" it. Now that acquisitions among leading companies in this sector have brought on increased investor attention, the potential for further significant price appreciation may have diminished. For this reason, we are not actively seeking new investments in this sector. Introduced as one of the fund's sectors in fiscal 1993, value-oriented consuming has quickly become one of the portfolio's largest sectors. We believe that companies in this area -- including discount retailers, budget motels and casual theme restaurant chains -- appeal to the budget-conscious consumer of the '90s. We believe that discount-oriented concepts, having grown in popularity during the recent recession, will continue to attract consumers in the current climate of modest economic recovery. Despite positive growth in the economy, competition has increased within several industry sectors, including applied/advanced technology. We reduced portfolio holdings in this area, de-emphasizing companies such as developers of personal computing education and entertainment software, who are suffering from growing competition in the field, as well as companies who are not expected to profit from the sector's advances to next generation platforms. Among the fund's smaller sectors, holdings in personal communications companies remain focused on cellular communications, long distance, paging and local telephone bypass companies. Despite the strong demand one would expect for environmental services, no market leaders have really emerged and product differentiation remains slight. Because market leadership is one of the qualities we seek in selecting stocks, this remains the portfolio's smallest sector. Stocks which are likely to benefit from strong secular growth trends, but do not fit neatly into any of the fund's designated investment sectors, are well represented among the fund's miscellaneous holdings. Looking ahead Slow growth in the economy, accompanied by still-low interest rates and an absence of inflationary pressures, bodes well for the fund. Stocks ended calendar 1993 at generally fair values based on 1993 earnings and, despite concerns over historically high valuations, we believe rethinking these values based on 1994 and 1995 earnings estimates indicates room for continued appreciation. (line graph) Cumulative return on a $10,000 investment since 8/31/90 Putnam New Opportunities Fund ...............Class A shares at NAV ***************Class A shares at POP - ---------------Lipper Growth Fund Index +++++++++++++++NASDAQ Industrials Index date NAV POP Lipper NASDAQ 8/31/90 10000 9425 10000 10000 12/31/90 11077 10441 10211 9978 12/31/91 18557 17492 13900 16439 12/31/92 23309 21971 14844 17815 12/31/93 30929 29154 16950 19803 Past performance is no assurance of future results. Performance of class B shares will vary from performance of class A shares due to differences in sales charges and 12b-1 fees. For example, $10,000 invested on 3/1/93 subject to the applicable contingent deferred sales charge would have been worth $13,570 if redeemed 12/31/93. If invested 6/30/93, and redeemed 12/31/93, it would have been worth $11,514. (bar chart) Shifts in sector allocations (based on a percentage of net assets) ****** Current year ...... Prior year Medical technology/ cost containment ......................18.0% *************************21.6% Media/entertainment ........................21.0% **********************20.5% Value-oriented consuming ......................18.2% ***********************19.8% Applied/advanced technology .........................21.3% *************13.4% Personal communications ......8.2% *****7.8% Personal financial services .0.0% ****4.2% Miscellaneous ...3.0% **2.3% Environmental services .0.6% *0.6% Portfolio of investments owned December 31, 1993 (Unaudited) Common Stocks (90.2%)(a) Number of Shares Value Health Care Services (11.8%) 475,000 Careline, Inc. $ 4,393,750 165,000 Coventry Corp.(b) 7,012,500 195,000 Health Management Assoc., Inc.(b) 5,703,750 85,000 Healthsource, Inc.(b) 4,696,250 366,400 Homecare Management, Inc. 4,992,200 255,000 Homedco Group, Inc.(b) 7,841,250 350,000 Horizon Healthcare Corp.(b) 7,043,750 310,000 Lincare Holdings, Inc.(b) 7,711,250 210,000 Mariner Health Group, Inc.(b) 4,541,250 45,000 Oxford Health Plans, Inc.(b) 2,385,000 57,500 Pacificare Health Systems, Inc.(b) 2,149,063 162,000 Physician Corp. of America(b) 4,050,000 72,500 Quantum Health Resources, Inc. 2,120,625 175,900 Renal Treatment Centers, Inc.(b) 3,605,950 30,000 United Healthcare Corp. 2,276,250 150,000 Value Health, Inc.(b) 4,725,000 140,000 Vencor Inc.(b) 4,182,500 79,430,338 Computer Software (8.2%) 185,000 Cisco Systems, Inc.(b) 11,955,625 25,434 Concord Communications Inc. 12,717 195,000 Digidesign, Inc.(b) 2,340,000 45,000 FTP Software, Inc. 1,192,500 30,193 Intuit, Inc.(b) 1,286,977 110,000 Parametric Technology Corp.(b) 4,262,500 205,000 PeopleSoft, Inc.(b) 6,406,250 170,000 Sybase, Inc.(b) 7,140,000 140,000 Synopsys, Inc.(b) 6,335,000 50,500 Wall Data, Inc.(b) 2,026,313 190,000 Wellfleet Communications, Inc.(b) 12,255,000 55,212,882 Restaurants (7.5%) 217,500 Apple South, Inc. 4,567,500 235,300 Applebee's International, Inc. 7,882,550 5,400 Boston Chicken, Inc.(b) 194,400 240,000 Buffets Inc.(b) 6,180,000 325,000 DF&R Restaurants, Inc.(b) 9,465,625 125,000 Fresh Choice, Inc.(b) 3,406,250 240,000 Landrys Seafood Restaurants, Inc.(b) 5,760,000 200,000 Outback Steakhouse, Inc.(b) 7,675,000 37,800 Sonic, Inc.(b) 973,350 250,000 Taco Cabana, Inc.(b) 4,437,500 50,542,175 Cable Television (7.4%) 60,000 Cablevision Systems Corp.(b) 4,095,000 386,821 Century Communications Corp. Class A 4,448,442 133,500 Comcast Corp. Special Class A 4,806,000 150,000 Gaylord Entertainment Co. 4,218,750 165,300 International Family Entertain- ment, Inc.(b) 3,367,988 490,000 Liberty Media Corp. Class A(b) 14,271,250 155,000 TCA Cable TV, Inc. 4,417,500 165,000 Tele-Communications, Inc. Class A(b) 4,991,250 115,000 Viacom, Inc. Class B(b) 5,160,625 49,776,805 Retail (7.3%) 90,000 Autozone Inc.(b) 5,152,500 230,000 Bed Bath & Beyond, Inc.(b) 7,935,000 303,200 Books-A-Million, Inc.(b) 6,594,600 125,000 CUC International, Inc.(b) 4,500,000 100,000 Gymboree Corp.(b) 4,450,000 80,000 Home Depot, Inc. (The) 3,160,000 70,000 Kohl's Corp.(b) 3,517,500 60,000 Office Depot, Inc.(b) 2,017,500 240,000 Stein Mart, Inc.(b) 4,620,000 195,000 Sun Television & Appliances, Inc. 4,143,750 170,000 Today's Man, Inc.(b) 3,102,500 49,193,350 Broadcasting (5.3%) 150,000 Broadcasting Partners, Inc.(b) 2,362,500 140,000 Clear Channel Communications, Inc.(b) 6,440,000 225,000 EZ Communications, Inc. Class A 3,543,750 165,000 Infinity Broadcasting Corp. Class A(b) 4,991,250 75,000 QVC Network, Inc.(b) 2,943,750 360,000 Sfx Broadcasting, Inc. Class A(b) 4,590,000 420,000 Westcott Communications, Inc.(b) 7,665,000 380,000 Westwood One, Inc.(b) 3,182,500 35,718,750 Recreation (4.9%) 264,000 Boomtown, Inc.(b) 3,828,000 185,000 Casino America, Inc.(b) 4,440,000 75,000 Disney (Walt) Productions, Inc. 3,196,875 200,000 Elsinore Corp.(b) 925,000 335,000 Mirage Resorts, Inc.(b) 7,998,125 120,000 Players International Inc.(b) 2,970,000 172,800 President Riverboat Casinos, Inc.(b) 3,801,600 127,500 Promus Cos., Inc.(b) 5,833,125 32,992,725 Telephone Services (4.7%) 300,000 ALC Communications Corp.(b) 8,625,000 135 Bell South Corp. 7,813 301,800 Communications Central, Inc.(b) 3,998,850 250,000 Davel Communications Group, Inc.(b) 3,843,750 65,000 LDDS Communications, Inc.(b) 3,136,250 146,600 MFS Communications Company, Inc.(b) 4,764,500 140,000 Telephone & Data Systems, Inc. 7,297,500 31,673,663 Medical Equipment And Supplies (4.1%) 375,000 Bioject Medical Technologies(b) 1,875,000 200,000 Haemonetics Corp.(b) 5,550,000 51,800 Molecular Dynamics, Inc.(b) 608,650 190,000 Protocol Systems, Inc.(b) 2,042,500 160,000 Sofamor/Danek Group, Inc.(b) 5,320,000 105,000 Ventritex, Inc.(b) 4,121,250 270,000 Zoll Medical Corp.(b) 8,100,000 27,617,400 Computer Services (4.0%) 100,000 America Online, Inc.(b) 5,850,000 64,125 BISYS Group, Inc.(b) 1,106,156 181,100 Cambridge Technololgy Partners(b) 2,852,325 135,000 First Data Corp. 5,501,250 300,000 Fiserv Inc.(b) 5,775,000 125,000 Paychex, Inc. 4,375,000 65,000 Quickresponse Services, Inc.(b) 1,430,000 26,889,731 Pharmaceuticals and Biotechnology (3.7%) 145,000 Amylin Pharmaceuticals, Inc.(b) 1,885,000 45,000 Biogen Inc.(b) 1,794,375 115,000 Cephalon, Inc.(b) 1,883,125 160,000 Cor Therapeutics, Inc.(b) 2,420,000 209,500 Elan Corp., PLC ADR(b)(d) 8,877,564 125,000 Immulogic Pharmaceutical Corp.(b) 1,687,500 175,000 Magainin Pharmaceuticals, Inc.(b) 2,406,250 115,000 Penederm, Inc.(b) 1,265,000 190,000 Theratech, Inc. Delaware(b) 2,850,000 25,068,814 Insurance (3.4%) 215,000 Bankers Life Holding Corp. 4,622,500 145,000 CCP Insurance, Inc. 4,041,875 220,000 Equitable Cos., Inc. 5,940,000 135,000 NWNL Companies, Inc. 4,320,000 100,000 Sunamerica, Inc. 4,325,000 23,249,375 Business Services (3.0%) 185,000 Danka Business Systems ADR(c) 7,400,000 16,200 Kelly Services, Inc. Class A 449,550 80,200 Olsten Corp. (The) 2,355,875 385,000 Robert Half International, Inc.(b) 10,106,250 20,311,675 Cellular Broadcasting (2.9%) 35,000 Cellular Communications, Inc. Class A(b) 1,636,250 250,000 Centennial Cellular Corp. Class A(b) 6,062,500 60,000 McCaw Cellular Communications, Inc.(b) 3,030,000 225,000 Pactel Corp.(b) 5,596,870 100,000 United States Cellular Corp.(b) 3,500,000 19,825,620 Lodging (2.3%) 290,000 Hospitality Franchise Systems, Inc.(b) 15,406,250 12,800 ShoLodge, Inc.(b) 294,400 15,700,650 Health Care Information Services (2.0%) 400,000 Clinicom, Inc.(b) 8,700,000 100,000 HBO & Co. 4,600,000 64,200 Pharmaceutical Marketing Services, Inc.(b) 946,950 14,246,950 Business Equipment and Services (2.0%) 235,000 Antec Corp.(b) 5,875,000 115,000 Newbridge Networks Corp.(b) 6,296,250 90,000 Star Sight Telecast, Inc.(b) 1,665,000 13,836,250 Publishing (1.6%) 190,000 Marvel Enterainment Group, Inc.(b) 5,177,500 110,000 News Corp. Ltd. ADR(c) 5,802,500 10,980,000 Paging (1.5%) 280,000 A+ Communications, Inc.(b) 3,640,000 220,000 Paging Network, Inc.(b) 6,710,000 10,350,000 Computers (0.9%) 34,000 Cabletron Systems, Inc.(b) 3,825,000 40,400 Chipcom Corp.(b) 2,040,200 5,865,200 Financial Services (0.8%) 160,000 MBNA Corp. 5,340,000 Environmental Control (0.6%) 200,000 Omega Environmental, Inc.(b) 2,050,000 120,000 Waste Management International PLC ADR(b)(c) 2,100,000 4,150,000 Specialty Consumer Products (0.3%) 135,000 Valence Technology, Inc.(b) 2,058,750 Total Common Stocks (cost $455,532,073) $610,031,103 Convertible Preferred Stocks (0.5%)(a) (cost $1,992,839) Number of Shares Value 72,000 Cellular Communications, Inc. $0.01, cv. pfd. $ 3,366,000 Convertible Bonds (0.5%)(a) (cost $2,145,330) Principal Amount Value $ 4,500,000 Office Depot Inc. sub. liquid yield, cv. notes zero %, 2007. $ 3,206,250 Short-Term Investments (8.9%)(a) Principal Amount Value $10,000,000 Ford Motor Credit Co. 3.32s, January 21, 1994 $ 9,981,556 10,000,000 Merrill Lynch & Co. Inc. 3.35s, January 7, 1994 9,994,417 4,150,000 Preferred Receivables Funding Corp. 3.25s, January 10, 1994 4,136,394 5,000,000 USAA Capital Corp. 3.18s, February 3, 1994 4,985,425 30,723,000 Interest in $402,391,000 joint repurchase agreement dated December 31, 1993 with Kidder Peabody & Co. Inc., due January 3, 1994 with respect to various U.S. Treasury obligations--maturity value of $30,725,688 for an effective yield of 3.15% 30,725,688 Total Short-Term Investments (cost $59,823,480) $ 59,823,480 Total Investments (cost $519,493,722)(d) $676,426,833 Notes (a) Percentages indicated are based on total net assets of $676,045,810, which correspond to a net asset value per Class A share and Class B share of $24.66 and $24.53, respectively. (b) Non-income-producing security. (c) Securities whose values are determined or significantly influenced by trading on exchanges not in the United States or Canada. ADR after the name of a foreign holding stands for American Depository Receipt, representing foreign securities on deposit with a domestic custodian bank. (d) The aggregate identified cost on a tax basis is $519,829,906, resulting in gross unrealized appreciation and depreciation of $168,739,509 and $12,142,582, respectively, or net unrealized appreciation of $156,596,927.
Statement of assets and liabilities December 31, 1993 (Unaudited) Assets Investments in securities, at value (identified cost $519,493,722) (Note 1) $676,426,833 Cash 903 Dividends receivable 86,137 Receivable for shares of the Fund sold 10,087,500 Receivable for securities sold 8,779,566 Unamortized organization expenses (Note 1) 13,735 Total assets 695,394,674 Liabilities Payable for securities purchased $15,978,133 Payable for shares of the Fund repurchased 1,795,668 Distributions payable to shareholders 10,343 Payable for compensation of Manager (Note 2) 991,249 Payable for distribution fees (Note 2) 400,717 Payable for administrative services (Note 2) 2,886 Payable for compensation of Trustees (Note 2) 899 Payable for investor servicing and custodian fees (Note 2) 41,410 Payable for organization expenses (Note 1) 23,788 Other accrued expenses 103,771 Total liabilities 19,348,864 Net assets $676,045,810 Represented by Paid-in capital (Note 4 and 5) $515,000,656 Accumulated net investment loss (2,351,707) Accumulated net realized gain on investment transactions 6,463,750 Net unrealized appreciation of investments 156,933,111 Total -- Representing net assets applicable to capital shares outstanding $676,045,810 Computation of net asset value and offering price Net asset value and redemption price per Class A share ($531,555,018 divided by 21,552,233 shares) $24.66 Offering price per Class A share (100/94.25 of $24.66)* $26.16 Net asset value and redemption price per Class B share ($144,490,792 divided by 5,891,298 shares)** $24.53 *On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. **Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. /TABLE
Statement of operations Six months ended December 31, 1993 (Unaudited) Investment income Interest $ 385,583 Dividends (net of foreign tax of $2,831) 228,117 Total investment income 613,700 Compensation of Manager (Note 2) $1,675,021 Investor servicing and custodian fees (Note 2) 267,431 Administrative services (Note 2) 5,624 Compensation of Trustees (Note 2) 9,934 Distribution fee -- Class A (Note 2) 519,863 Distribution fee -- Class B (Note 2) 309,665 Reports to shareholders 24,322 Auditing 10,992 Legal 6,284 Postage 40,110 Amortization of organization expenses (Note 1) 5,991 Other 90,170 Total expenses 2,965,407 Net investment loss (2,351,707) Net realized gain on investments (Notes 1 and 3) 14,226,082 Net unrealized appreciation of investments during the period 73,534,977 Net gain on investments 87,761,059 Net increase in net assets resulting from operations $85,409,352 /TABLE
Statement of changes in net assets Six months ended Year ended December 31 June 30 1993* 1992 Increase in net assets Operations: Net investment loss $ (2,351,707) $ (2,175,729) Net realized gain on investments 14,226,082 3,536,111 Net unrealized appreciation of investments 73,534,977 80,388,469 Net increase in net assets resulting from operations 85,409,352 81,748,851 Distributions to shareholders from net realized gain on investments -- Class A (8,898,213)(3,728,798) net realized gain on investments -- Class B (2,205,357) -- Increase from capital share transactions (Notes 4) 267,616,032114,897,684 Total increase in net assets 341,921,814 192,917,737 Net assets Beginning of period 334,123,996 141,206,259 End of period (including accumulated net investment loss of $2,351,707 and $2,644,703, respectively) $676,045,810 $334,123,996 *Unaudited /TABLE
Financial highlights* (For a share outstanding throughout the period) For the period March 1, 1993 August 31, 1990 Six months (commencement Six months (commencement ended of operations) to ended Year ended of operations) to December 31 June 30 December 31 June 30 June 30 1993** 1993 1993** 1993 1992 1991 Class B Class A Net Asset Value, Beginning of Period $20.80 $17.76 $20.83 $14.50 $11.56 $8.54 Investment operations Net Investment Loss (.04) (.05) (.04) (.12) (.02) (.11)(a) Net Realized and Unrealized Gain on Investments 4.22 3.09 4.32 6.77 3.33(d) 3.19 Total from Investment Operations 4.18 3.04 4.28 6.65 3.31 3.08 Less distributions from net realized gain on investments (.45) -- (.45) (.32) (.37) (.06) Total Distributions (.45) -- (.45) (.32) (.37) (.06) Net Asset Value, End of Period $24.53 $20.80 $24.66 $20.83 $14.50 $11.56 Total Investment Return at Net Asset Value (%) (e) 40.28(b) 51.88(b) 41.18(b) 46.12 28.85 43.12(b) Net Assets, End of Period (in thousands) $144,491 $15,698 $531,555 $318,426 $141,206 $3,164 Ratio of Expenses to Average Net Assets (%) 1.89(b) 2.02(b) 1.65(b) 1.31 1.64 2.75(a)(b) Ratio of Net Investment Loss to Average Net Assets (%) (2.28)(b) (1.72)(b) (1.28)(b) (0.98) (.91) (1.37)(a)(b) Portfolio Turnover (%) 31.36(f) 93.59 31.36(f) 93.59 116.04(c) 71.54(f) *Financial Highlights for periods ended through June 30, 1992 have been restated to conform with requirements issued by the SEC in April 1993. **Unaudited. (a)Reflects a voluntary absorption of expenses incurred by the Fund and an expense limitation during the period. As a result of these limitations, expenses of the Fund for the period ended June 30, 1991 reflect a reduction of $0.05 per share, respectively. (b)Annualized. (c)Portfolio turnover excludes the impact of assets received from the acquisition of Putnam Information Sciences Trust. (See Note 5) (d)The amount shown is a balancing figure and does not accord with the net loss on investments which excludes the unrealized appreciation acquired from Putnam Information Sciences Trust. (Note 5) (e)Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (f)Not annualized. /TABLE Notes to Financial statements December 31, 1993 (Unaudited) Note 1 Significant accounting policies The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund seeks capital appreciation by investing principally in common stocks of companies in sectors of the economy which, in Putnam Investment Management's judgment, possess above-average, long-term growth potential. The Fund offers both Class A and Class B shares. The Fund commenced its public offering of Class B shares on March 1, 1993. Class A shares are sold with a front-end sales charge of 5.75%. Class B shares do not pay a front-end sales charge, but pay a higher ongoing distribution fee than Class A shares and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. In addition, the Trustees declare separate dividends on each class of shares. Each class bears expenses unique to that class (including the distribution fees applicable to such class), and votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law to be determined by the Trustees, all other expenses of the Fund are borne pro-rata by the holders of both classes of shares. Shares of each class would receive their pro rata share of the net assets of the Fund if the Fund were liquidated. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A) Security valuation Investments for which market quotations are readily available are stated at market value, which is determined using the last reported sale price, or, if no sales are reported - -- as in the case of some securities traded over-the-counter -- the last reported bid price, except that certain U.S. government obligations are stated at the mean between the last reported bid and asked prices. Short-term investments having remaining maturities of 60 days or less are stated at amortized cost which approximates market, and other investments are stated at fair value following procedures approved by the Trustees. B) Security transactions and related investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Interest income is recorded on the accrual basis and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. C) Joint trading account Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Fund may transfer uninvested cash balances into a joint trading account, along with the cash of other registered investment companies managed by Putnam Investment Management, Inc. (formerly known as The Putnam Management Company, Inc.), the Fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc. (formerly known as The Putnam Companies, Inc.), and certain other accounts. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. D) Repurchase agreements The Fund, through its custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. The Fund's Manager is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. E) Federal taxes It is the policy of the Fund to distribute all of its income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. It is also the intention of the Fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation of securities held, and excise tax on income and capital gains. F) Distributions to shareholders Distributions to shareholders are recorded by the Fund on the ex-dividend date. G) Unamortized organization expenses Expenses incurred by the Fund in connection with its organization, its registration with the Securities Exchange Commission and with various state and the initial public offering of its shares aggregated $54,369. These expenses are being amortized by the Fund on a straight-line basis over a five-year period. Note 2 Management fee, administrative services, and other transactions Compensation of Putnam Investment Management, the Fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., for management and investment advisory services is paid quarterly based on the average net assets of the Fund. 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 any amount over $1.5 billion, subject to reduction in any year by the amount of certain brokerage commissions and fees (less expenses) received by affiliates of the Manager of the Fund's portfolio transactions. The Fund also reimburses the Manager for the compensation and related expenses of certain officers of the Fund and their staff who provide administrative services to the Fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. For the six months ended December 31, 1993, the Fund incurred $5,624 for these services. Trustees of the Fund receive an annual Trustee's fee of $1,440 and an additional fee for each Trustees' meeting attended. Trustees who are not interested persons of the Manager and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. Custodial functions for the Fund'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. Fees paid for these investor servicing and custodial functions for the six months ended December 31, 1993 amounted to $267,431. Investor servicing and custodian fees reported in the Statement of operations for the six months ended December 31, 1993 have been reduced by credits allowed by PFTC. The Fund has adopted a distribution plan with respect to its class A shares (the "Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Class A Plan is to compensate Putnam Mutual Funds Corp. (formerly known as Putnam Financial Services, Inc.), a wholly-owned subsidiary of Putnam Investments Inc., for services provided and expenses incurred by it in distributing class A shares. The Trustees have approved payment by the Fund to Putnam Mutual Funds Corp. at an annual rate of 0.25% of the average net assets attributable to class A shares. For the period ended December 31, 1993, the Fund paid $519,863 in distribution fees for class A shares. The Fund has adopted a separate distribution plan with respect to its class B shares (the "Class B Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Class B Plan is to compensate Putnam Mutual Funds Corp. for services provided and expenses incurred by it in distributing class B shares. The Class B Plan provides for payments by the Fund to Putnam Mutual Funds Corp. at an annual rate of 1.00% of the Fund's average net assets attributable to class B shares. For the six months ended December 31, 1993, the Fund paid Putnam Mutual Funds Corp. distribution fees of $309,665 for class B shares. During the six months ended December 31, 1993, Putnam Mutual Funds Corp., a wholly owned subsidiary of The Putnam Companies, Inc., acting as an underwriter, received net commissions of $395,367 from the sale of Class A shares of the Fund. Putnam Mutual Funds Corp. also receives the proceeds of the contingent deferred sales charges on its Class B share redemptions. Putnam Mutual Funds Corp. has informed the Fund that it received contingent deferred sales charges of $65,509 from redemptions during the six months ended December 31, 1993. A deferred sales charge of up to 1% is assessed on certain redemptions of Class A shares repurchased as part of an investment of $1 million or more. For the period ended December 31, 1993, Putnam Mutual Funds Corp., acting as underwriter, received $18 on such redemptions. Note 3 Purchases and sales of securities During the six months ended December 31, 1993, purchases and sales of investment securities other than short-term investments aggregated $362,849,776 and $141,269,693, respectively. There were no purchases or sales of U.S. government obligations during the year. In determining the net gain or loss on securities sold, the cost of securities has been determined on the identified cost basis.
Note 4 Capital shares At December 31, 1993, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Six months ended Year ended December 31 June 30 1993 1993 Shares Amount Shares Amount Class A Shares sold 13,784,604 $321,618,033 15,622,166 $282,584,004 Reinvestment of distributions 333,472 8,016,624 180,756 3,313,941 14,118,076 329,634,657 15,802,922 285,897,945 Shares repurchased (7,851,725) (183,138,289) (10,253,778) (185,483,706) Net increase 6,266,351 $146,496,368 5,549,144 $100,414,239 For the period March 1, 1993 (commencement of Six months ended operations) to December 31 June 30 1993 1993 Shares Amount Shares Amount Class B Shares sold 5,586,061 $131,677,002 780,431 $14,991,747 Reinvestment of distributions 84,413 2,019,170 -- -- 5,670,474 133,696,172 780,431 14,991,747 Shares repurchased (533,835) (12,576,508) (25,772) (508,302) Net Increase 5,136,639 $121,119,664 754,659 $14,483,445 /TABLE Note 5 Acquisition of Putnam Information Sciences Trust On March 23, 1992, the exchange date, the Fund acquired the net assets of Putnam Information Sciences Trust (PIST) by a tax-free exchange approved by the shareholders of PIST. The net assets of the Fund immediately following the acquisition on March 23, 1992, were $148,015,840. PIST Net assets of PIST on March 20, 1992, valuation date (including unrealized appreciation of $21,305,019) $101,174,780 Shares of the Fund exchanged in the acquisition for 5,615,045 outstanding shares of PIST 6,113,280 Note 6 Reclassification of Capital Account Effective July 1, 1993, Putnam New Opportunities Fund has adopted the provisions of Statement of Position 93-2 "Determination, DIsclosure and FInancial Statement Presentation of Income, Capital Gain and Return of Capital Distributions by Investment Companies (SOP)." The purpose of this SOP is to report the accumulated net investment income (loss) and accumulated net realized gain (loss) accounts in such a manner as to approximate amounts available for future distributions (or to offset future realized capital gains) and to achieve uniformity in the presentation of distributions by investment companies. As a result of the SOP, the Fund has reclassified $2,644,703 to increase undistributed net investment income and decreased accumulated net realized gain by $7,424, with an decrease of $2,637,279 to additional paid-in capital. These adjustments represent the cumulative amounts necessary to report these balances through June 30, 1993, the close of the Fund's most recent fiscal year-end, for financial reporting and tax purposes. Fund performance supplement Putnam New Opportunities Fund is a portfolio managed for long-term capital appreciation through common stocks of companies in sectors of the economy which, in Putnam Management's judgment, possess above-average long-term growth potential. The NASDAQ Industrial Index is an unmanaged index of common stocks traded in the over-the-counter market. The index does not take into account brokerage commissions or other costs. Standard & Poor's 500 Index is an unmanaged list of large-capitalization common stocks; it assumes reinvestment of all distributions. The index does not take into account brokerage commissions or other costs. The fund's portfolio contains securities that do not match those in the indexes. The Lipper Growth Fund Index is a NAV-weighted index which represents the 30 largest growth funds tracked by Lipper Analytical Services for the 12 months ended December 31, 1993 and since the fund's inception on 8/31/90. Lipper rankings vary over time and do not reflect the effect of sales charges. Fund performance data do not take into account any adjustment for taxes that may have been payable. The fund performance supplement has been prepared by Putnam Management to provide additional information about the fund and the indexes used for performance comparisons. The information is not part of the portfolio of investments owned or the financial statements. Putnam New Opportunities Fund Fund information Investment manager Putnam Investment Management One Post Office Square Boston, MA 02109 Marketing services Putnam Mutual Funds One Post Office Square Boston, MA 02109 Investor servicing agent Putnam Investor Services Mailing address: P.O. Box 41203 Providence, RI 02940-1203 1-800-225-1581 Custodian Putnam Fiduciary Trust Company Legal counsel Ropes & Gray (DALBAR logo) Putnam Investor Services has received the DALBAR award each year since the award's 1990 inception. In more than 10,000 tests of 38 shareholder service components, Putnam outperformed the industry standard in every category. 45/71-10470 Officers George Putnam President Charles E. Porter Executive Vice President Patricia C. Flaherty Senior Vice President Lawrence J. Lasser Vice President Gordon H. Silver Vice President Peter Carman Vice President Matthew A. Weatherbie Vice President Daniel L. Miller Vice President and Fund Manager William N. Shiebler Vice President John R. Verani Vice President Paul O'Neil Vice President John D. Hughes Vice President and Treasurer Beverly Marcus Clerk and Assistant Treasurer Trustees George Putnam, Chairman William F. Pounds, Vice Chairman Hans H. Estin, John A. Hill, Elizabeth T. Kennan, Lawrence J. Lasser, Robert E. Patterson, Donald S. Perkins, George Putnam, III, A.J.C. Smith, W. Nicholas Thorndike This report is for the information of shareholders of Putnam New Opportunities 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. - ---------------------- Bulk Rate U.S. Postage Paid Boston, MA Permit No. 53749 - ---------------------- PUTNAMINVESTMENTS The Putnam Funds One Post Office Square Boston, Massachusetts 02109 APPENDIX TO FORM N30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND EDGAR-FILED TEXTS: (1) Rule lines for tables are omitted. (2) Boldface and italic typefaces are displayed in normal type. (3) Headers (e.g, the name of the fund) and footers (e.g., page numbers and "The accompanying notes are an integral part of these financial statements") are omitted. (4) Because the printed page breaks are not reflected, certain tabular and columnar headings and symbols are displayed differently in this filing. (5) Bullet points and similar graphic signals are omitted. (6) Page numbering is different. -----END PRIVACY-ENHANCED MESSAGE-----