-----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, Wsa3m9ZBC2Vrse9aeVW/+9Lh1O+8MZM7YxHlU6OWMdpuzAjJfUCiWI26/RDeqgw8 tpl3wqMrTI1KD9Rxsy5BjQ== 0000928816-00-000077.txt : 20000217 0000928816-00-000077.hdr.sgml : 20000217 ACCESSION NUMBER: 0000928816-00-000077 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM NEW OPPORTUNITIES FUND CENTRAL INDEX KEY: 0000865177 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 043091455 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06128 FILM NUMBER: 546917 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: A6 ZIP: 02109 BUSINESS PHONE: 6172921000 N-30D 1 PUTNAM NEW OPPORTUNITIES FUND Putnam New Opportunities Fund SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK 12-31-99 [LOGO: BOSTON * LONDON * TOKYO] From the Chairman [GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM] [copyright] Karsh, Ottawa Dear Shareholder: It is always a pleasure to bring shareholders a report containing news of robust performance, and this year's semiannual report for Putnam New Opportunities Fund is no exception. It is also customary in such cases to caution that results of this magnitude should not become an annual expectation, though we remain confident that your fund's long-term prospects remain exceedingly bright. This is the last letter to you and the other shareholders of Putnam New Opportunities Fund that I will be signing. After more than 30 years as Chairman of the Trustees and President of the Putnam Funds, the time has come for me to step aside. In June, John Hill will become Chairman. John is currently an independent Trustee and has served on the board for the past 14 years. In addition, my son, George Putnam, III, will take on the role of President. I am confident that the leadership of the funds will be in exceptionally strong hands. I will become Chairman Emeritus, remain a Putnam shareholder, and stay in close touch with the funds. It has been my privilege to serve you. Respectfully yours, /S/GEORGE PUTNAM George Putnam Chairman of the Trustees February 16, 2000 Report from the Fund Managers Daniel L. Miller Kenneth W. Lang Jeffrey R. Lindsey Putnam New Opportunities Fund's greatest strength has been its ability to target sectors of the market that offer the most compelling growth potential. This was particularly beneficial in the six months ended December 31, 1999, when many rapidly growing U.S. companies made some of their most astounding advances. At the close of the fiscal period, the U.S. equity market was basking in the glow of record-breaking 1999 performance from many major indexes. The Nasdaq Composite Index -- a common measure of technology stocks -- rose 85.6% in the 1999 calendar year, the biggest annual gain for a major market index in U.S. history. The Dow Jones Industrial Average gained 25.2% in 1999, a record fifth year in a row that the blue-chip index posted a double-digit percentage gain. And the S&P 500 Index rose 19.5%, also a record fifth straight year of double-digit gains. The market's impressive gains were dominated by just a few sectors, including technology, telecommunications, wireless, and media. Your fund was positioned to capitalize on these sectors while generally sidestepping underperforming sectors such as health care and consumer services. While your fund has invested in a variety of businesses, one underlying theme served as a backdrop for nearly every stock in its portfolio: the explosive demand for advanced technology and faster, more efficient transmission of voice and data communications. Total return for 6 months ended 12/31/99 Class A Class B Class C Class M NAV POP NAV CDSC NAV CDSC NAV POP - -------------------------------------------------------------------------- 51.09% 42.40% 50.63% 45.63% 50.55% 49.55% 50.73% 45.46% - -------------------------------------------------------------------------- Past performance is not indicative of future results. Performance information for longer periods and explanation of performance calculation methods begin on page 6. [GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS] TOP INDUSTRY SECTORS* Electronics 14.7% Telecommunications 11.5% Software 11.3% Broadcasting 9.4% Communications equipment 9.3% Footnote reads: *Based on net assets as of 12/31/99. Holdings will vary over time. * INSATIABLE DEMAND FOR WIRELESS TECHNOLOGY While the Internet has attracted much of the media attention, stocks in other sectors have also experienced unprecedented growth. One example is wireless communications -- from builders of cellular telephone networks to companies that provide Internet-based content and applications for wireless units such as mobile laptop computers and handsets. Makers of wireless communications technology, such as fund holding QUALCOMM, were among the fastest-growing stocks in 1999. QUALCOMM, whose stock price rose more than 2,300% in 1999, pioneered CDMA (code-division multiple access) technology, which has become the high-quality standard for the next generation of cell phones, wireless telecom equipment, and satellite ground stations around the world. Another fund holding profiting from the growing wireless demand is WinStar Communications. In addition to its Wireless Fiber service, the company also provides local and long-distance phone services, high-speed data transport, high-speed Internet access, and Web hosting, design, and applications services. While these holdings and 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 well vary in the future. * INTERNET CONTINUES AS DOMINANT GROWTH FORCE The frenzy surrounding the Internet -- and investors' love affair with dot-com stocks -- continues to be a major theme for the U.S. equity market. When selecting Internet stocks for your fund's portfolio, as with any other holdings, we are careful to seek leaders with healthy business models, strong management teams, and a solid foothold in markets with the potential for solid long-term profits. Of particular note during the period were companies that are building vital software for Internet users. Check Point Software Technologies, for example, provides firewall software that protects corporate networks from unauthorized users. It also blocks computer viruses and other unwanted Web content and lets companies set up virtual private networks for secure internal and remote communications. Fund holding RealNetworks provides software that lets users listen to audio and view video on the Internet. The company's RealPlayer software allows broadcasters to deliver streaming audio and video content over the Web instantaneously. Silknet Software offers products that enable businesses to perform marketing, sales, e-commerce, and customer service functions via the Internet. Online advertising company DoubleClick was also a stellar performer. The company is able to collect information on audience behavior and use the results to target placement of online ads. Putnam New Opportunities Fund re-opens, briefly Your fund, which had been closed for lump sum investments since 1997, re-opened for a limited time on January 18, 2000. We proceeded cautiously - -- only keeping the fund open until new assets reached approximately $1 billion. This allowed us to meet the demands of potential investors while protecting the interests of current shareholders. The fund remained open to all investors for just 9 days, closing on January 28. At present, only current shareholders who invest through a Putnam-authorized systematic investment plan and participants in defined contribution plans are permitted to make new investments in the fund. Lipper ranked Putnam New Opportunities Fund's class A shares 60 out of 1,149 (top 6%), 64 out of 730 (top 9%), and 34 out of 449 (top 8%) growth funds tracked for 1-, 3-, and 5-year performance, respectively, as of 12/31/99. Lipper is an industry research firm whose rankings are based on total return performance, vary over time, and do not reflect the effects of sales charges. Performance of other share classes will vary. Past performance is not indicative of future results. The fund was not ranked over longer periods. Perhaps less glamorous than Internet businesses but just as vital to the explosion in new technology are data storage companies. Fund holdings EMC Corp., Veritas Software, and Network Appliance provide services and software that help businesses manage and store computer data. Veritas software also guards computer networks against data loss from crashes and errors and expedites data recovery. These storage companies have undergone phenomenal growth due in large part to new demands from Internet service providers and corporate intranets. The Wall Street Journal praises Putnam New Opportunities Fund Since it was introduced almost 10 years ago, Putnam New Opportunities Fund has compiled an impressive performance record. In fact, The Wall Street Journal recently featured it as the best-performing diversified stock fund of the 1990s based on cumulative performance.* "Since its inception in August 1990, this fund has outperformed longer-standing portfolios to produce a cumulative gain of 1,092% through December 9, according to Lipper," said the article, entitled "Decade's top 10 mutual funds delivered growth with flexibility." The article, which appeared in the December 19, 1999, edition, went on to say: "Right out of the starting gate, manager Dan Miller -- who still lead manages the fund -- decided to buy fast-growing companies of all market capitalizations." As Putnam New Opportunities Fund faces its second decade in operation, it continues to pursue the same strategy that made it so successful in the 1990s: investing in fast-growing companies of all sizes that are believed to offer exceptional long-term growth potential. *See page 6 of this report for complete performance information and page 3 for ranking information. * TRADITIONAL MEDIA COMPANIES DELIVER STRONG RETURNS In the media sector of the fund's portfolio, traditional giants such as Infinity Broadcasting and CBS Corp. were standouts, as were smaller businesses such as Citadel, a radio broadcaster that owns and operates commercial stations in midsize U.S. markets. Media companies have benefited from the growth in advertising from Internet companies as well as from pharmaceutical firms. Drug companies have increased their advertising dramatically since 1997, when the Food and Drug Administration eased direct-to-consumer advertising regulations. Also delivering strong performance in the fund's media sector were cable programming companies such as AT&T-Liberty Media. Partially owned by AT&T Corp., this company holds equity positions in nearly 100 cable channels, including BET, Discovery Channel, E!, Encore, QVC, and USA Networks. Liberty also has numerous positions in overseas cable systems, many of which are in their infancy and are expected to experience rapid growth. The company also has 95% ownership of Liberty Digital, which includes music and online properties. * GROWTH DYNAMICS REMAIN EXCITING, BUT MORE LIKELIHOOD OF VOLATILITY The first half of fiscal 2000 has provided one of the most exciting environments in recent years for aggressive growth funds. Solid corporate earnings and continued demand for new technology should continue to drive the major U.S. stock indexes in the months ahead. Recovering overseas economies and continued economic strength in the United States also contribute to a generally optimistic outlook. [GRAPHIC OMITTED: TOP 10 HOLDINGS] TOP 10 HOLDINGS QUALCOMM Communications equipment AT&T Corp. -- Liberty Media Group Cable television Clear Channel Communications, Inc. Broadcasting General Electric Co. Conglomerate JDS Uniphase Corp. Electronics Microsoft Corp. Software Verisign, Inc. Technology services CBS Corp. Broadcasting Nokia Corp. Communications equipment Infinity Broadcasting Corp. Broadcasting Footnote reads: These holdings represent 21.4% of the fund's net assets as of 12/31/99. Portfolio holdings will vary over time. It is important to note, however, that exceptional periods of growth -- like that we've experienced in the first half of the fiscal year -- are often followed by periods of volatility. In addition, a much-anticipated series of Federal Reserve Board interest-rate increases could temper stock gains as companies face steeper borrowing costs and equity investors shift money into higher-yielding bonds. With these factors in mind, we enter the second half of fiscal 2000 with a strategic eye on market conditions while continuing to target the most compelling growth opportunities. 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 12/31/99, 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 or 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 New Opportunities Fund is designed for investors seeking long-term capital appreciation primarily through common stock investments in companies in economic sectors with above-average long-term growth potential.
TOTAL RETURN FOR PERIODS ENDED 12/31/99 Class A Class B Class C Class M (inception dates) (8/31/90) (3/1/93) (7/26/99) (12/1/94) NAV POP NAV CDSC NAV CDSC NAV POP - ----------------------------------------------------------------------------------------- 6 months 51.09% 42.40% 50.63% 45.63% 50.55% 49.55% 50.73% 45.46% - ----------------------------------------------------------------------------------------- 1 year 69.64 59.91 68.62 63.62 68.41 67.41 68.81 62.91 - ----------------------------------------------------------------------------------------- 5 years 319.26 295.16 304.45 302.45 303.89 303.89 308.82 294.45 Annual average 33.20 31.63 32.24 32.11 32.21 32.21 32.53 31.58 - ----------------------------------------------------------------------------------------- Life of fund 1239.69 1162.80 1149.26 1149.26 1149.44 1149.44 1174.63 1129.73 Annual average 32.07 31.23 31.08 31.08 31.08 31.08 31.36 30.86 - -----------------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 12/31/99 Russell Midcap Consumer Growth Index price index - ------------------------------------------------------------------------ 6 months 32.49% 1.56% - ------------------------------------------------------------------------ 1 year 51.29 2.80 - ------------------------------------------------------------------------ 5 years 243.93 12.76 Annual average 28.03 2.43 - ------------------------------------------------------------------------ Life of fund 533.16 28.27 Annual average 21.86 2.70 - ------------------------------------------------------------------------ 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-, and 10-year (where available) 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. PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 12/31/99 Class A Class B Class C Class M - ----------------------------------------------------------------------------- Distributions (number) 1 1 1 1 - ----------------------------------------------------------------------------- Income -- -- -- -- - ----------------------------------------------------------------------------- Capital gains Long-term $7.30 $7.30 $7.30 $7.30 - ----------------------------------------------------------------------------- Short-term -- -- -- -- - ----------------------------------------------------------------------------- Total $7.30 $7.30 $7.30 $7.30 - ----------------------------------------------------------------------------- Share value: NAV POP NAV NAV NAV POP - ----------------------------------------------------------------------------- 6/30/99 $65.61 $69.61 $62.51 $ -- $64.05 $66.37 - ----------------------------------------------------------------------------- 7/26/99* -- -- -- 65.31 -- -- - ----------------------------------------------------------------------------- 12/31/99 90.95 96.50 85.99 90.65 88.37 91.58 - ----------------------------------------------------------------------------- *Inception 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 Consumer price index (CPI) is a commonly used measure of inflation; it does not represent an investment return. Russell Midcap Growth Index measures the performance of Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. The index assumes reinvestment of all distributions and interest payments and does not take in account brokerage fees or taxes. Securities in the fund do not match those in the index and performance of the fund will differ. It is not possible to invest directly in an index. Welcome to www.putnaminv.com Now you can use your PC to get up-to-date information about your funds, learn more about investing and retirement planning, and access market news and economic outlooks from Putnam. VISIT PUTNAM'S SITE ON THE WORLD WIDE WEB FOR: * the benefits of investing with Putnam * Putnam's money management philosophy * complete fund information, daily pricing and long-term performance * your current account value, portfolio value and transaction history * the latest on new funds and other Putnam news You can also read Putnam economist Dr. Robert Goodman's commentary and Putnam's Capital Markets outlook, search for a particular fund by name or objective, use our glossary to decode investment terms . . . and much more. The site can be accessed through any of the major online services (America Online, CompuServe, Prodigy) that offer web access. Of course, you can also access it via Netscape or Microsoft Internet Explorer, using an independent Internet service provider. New features will be added to the site regularly. So be sure to bookmark us at http://www.putnaminv.com A guide to the financial statements These sections of the report constitute the fund's financial statements. The fund's portfolio lists all the fund's investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification. Statement of assets and liabilities shows how the fund's net assets and share price are determined. All investment and noninvestment 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-end funds, a separate table is provided for each share class.
The fund's portfolio December 31, 1999 (Unaudited) COMMON STOCKS (98.5%) (a) NUMBER OF SHARES VALUE Advertising and Marketing Services (1.1%) - -------------------------------------------------------------------------------------------------------------------------- 772,200 DoubleClick, Inc. (NON) $ 195,414,863 231,596 Engage Technologies, Inc. (NON) 13,895,760 2,512,500 Lamar Advertising Co. (NON) 152,163,281 --------------- 361,473,904 Airlines (0.2%) - -------------------------------------------------------------------------------------------------------------------------- 1,389,690 Ryanair Holdings, PLC ADR (Ireland) (NON) 76,606,661 Banking (1.5%) - -------------------------------------------------------------------------------------------------------------------------- 3,870,100 Citigroup, Inc. 215,032,431 715,500 Firstar Corp. 15,114,938 3,381,020 National Commerce Bancorporation 76,706,891 2,630,740 TCF Financial Corp. 65,439,658 1,869,700 Zions Bancorp 110,662,869 --------------- 482,956,787 Biotechnology (2.2%) - -------------------------------------------------------------------------------------------------------------------------- 4,437,800 Amgen, Inc. (NON) 266,545,363 568,300 Biogen, Inc. 48,021,350 795,600 Biovail Corp. International (Canada) (NON) 74,587,500 786,000 Genentech, Inc. (NON) 105,717,000 1,005,620 QLT PhotoTherapeutics Inc. (Canada) (NON) 59,080,175 1,195,130 Sepracor, Inc. (NON) 118,541,957 1,140,000 Transkaryotic Therapies, Inc. (NON) (AFF) 43,890,000 --------------- 716,383,345 Broadcasting (9.4%) - -------------------------------------------------------------------------------------------------------------------------- 4,981,920 AMFM, Inc. (NON) 389,835,240 8,653,940 CBS Corp. (NON) 553,311,289 905,850 Citadel Communications Corp. (NON) 58,767,019 9,485,600 Clear Channel Communications, Inc. (NON) 846,589,800 1,207,600 Echostar Communications Corp. Class A (NON) 117,741,000 1,420,380 Entercom Communications Corp. (NON) 93,745,080 884,600 Hispanic Broadcasting Corp. (NON) 81,576,706 15,250,433 Infinity Broadcasting Corp. Class A (NON) 551,875,044 2,036,100 Univision Communications Inc. Class A (NON) 208,063,969 1,750,400 WestWood One, Inc. (NON) 133,030,400 --------------- 3,034,535,547 Cable Television (3.9%) - -------------------------------------------------------------------------------------------------------------------------- 1,723,110 Adelphia Communications Corp. (NON) 113,079,094 14,949,520 AT&T Corp. Liberty Media Group Class A (NON) 848,385,260 3,930,000 Comcast Corp. Class A 198,710,625 1,503,800 USA Networks, Inc. (NON) 83,084,950 --------------- 1,243,259,929 Capital Equipment (2.8%) - -------------------------------------------------------------------------------------------------------------------------- 2,429,100 Applied Materials, Inc. (NON) 307,736,606 1,639,000 ASM Lithography Holding N.V. (Netherlands) (NON) 186,436,250 1,920,180 KLA Tencor Corp. (NON) 213,860,048 2,841,300 Teradyne, Inc. (NON) 187,525,800 --------------- 895,558,704 Communications Equipment (9.3%) - -------------------------------------------------------------------------------------------------------------------------- 2,070,380 ADC Telecommunications, Inc. (NON) 150,231,949 1,939,400 Advanced Fibre Communications (NON) 86,666,938 249,609 Brocade Communications Systems (NON) 44,180,793 879,800 CIENA Corp. (NON) 50,588,500 3,897,100 Cisco Systems, Inc. (NON) 417,476,838 1,994,500 Comverse Technology, Inc. (NON) 288,703,875 449,900 Extreme Networks, Inc. (NON) 37,566,650 278,900 Juniper Networks, Inc. (NON) 94,826,000 3,588,100 Lucent Technologies, Inc. 268,434,731 2,909,500 Nokia Corp. ADR (Finland) 552,805,000 4,904,424 QUALCOMM, Inc. (NON) 863,791,677 594,717 Reback Networks, Inc. (NON) 105,562,268 508,100 Tellabs, Inc. (NON) 32,621,468 --------------- 2,993,456,687 Computers (3.5%) - -------------------------------------------------------------------------------------------------------------------------- 2,541,200 Dell Computer Corp. (NON) 129,601,200 2,973,100 EMC Corp. (NON) 324,811,175 1,540,540 Network Appliance, Inc. (NON) 127,961,104 6,821,500 Sun Microsystems, Inc. (NON) 528,239,906 40,897 VA Linux Systems, Inc. (NON) 8,450,343 --------------- 1,119,063,728 Conglomerates (3.2%) - -------------------------------------------------------------------------------------------------------------------------- 4,658,300 General Electric Co. 720,871,925 7,666,600 Tyco International Ltd. 298,039,075 --------------- 1,018,911,000 Consumer Finance (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 2,135,190 Finova Group, Inc. 75,799,245 269,340 NextCard, Inc. (NON) 7,777,193 --------------- 83,576,438 Consumer Goods (0.8%) - -------------------------------------------------------------------------------------------------------------------------- 1,672,900 Colgate-Palmolive Co. 108,738,500 3,047,900 Estee Lauder Cos. Class A 153,728,456 --------------- 262,466,956 Consumer Services (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 596,300 Stamps.com, Inc. (NON) 24,820,988 535,900 TMP Worldwide Inc. (NON) 76,097,800 --------------- 100,918,788 Educational Services (--%) - -------------------------------------------------------------------------------------------------------------------------- 211,100 CBT Group PLC ADR (Ireland) (NON) 7,071,850 247,700 ITT Educational Services, Inc. (NON) 3,823,869 --------------- 10,895,719 Electric Utilities (0.5%) - -------------------------------------------------------------------------------------------------------------------------- 2,543,962 Calpine Corp. (NON) 162,813,568 Electronics (14.7%) - -------------------------------------------------------------------------------------------------------------------------- 1,315,600 Altera Corp. (NON) 65,204,425 3,158,800 Analog Devices, Inc. (NON) 293,768,400 1,051,480 Applied Micro Circuits Corp. (NON) 133,800,830 362,100 Broadcom Corp. (NON) 98,626,988 6,535,880 Celestica Inc. (Canada) (NON) 362,741,340 2,325,020 E-Tek Dynamics, Inc. (NON) 313,005,818 3,796,200 Flextronics International Ltd. (NON) 174,625,200 2,219,900 Intel Corp. 182,725,519 2,159,660 Jabil Circuit, Inc. (NON) 157,655,180 4,402,800 JDS Uniphase Corp. (NON) 710,226,675 3,609,680 Linear Technology Corp. (NON) 258,317,725 6,250,000 Maxim Integrated Products, Inc. (NON) 294,921,875 1,192,800 Micrel, Inc. (NON) 67,915,050 2,448,200 Motorola, Inc. 360,497,450 1,166,800 PMC-Sierra, Inc. (NON) 187,052,625 59,991 QLogic Corp. (NON) 9,591,061 656,400 RF Micro Devices, Inc. (NON) 44,922,375 1,351,700 Sanmina Corp. (NON) 135,001,038 253,000 Sawtek, Inc. (NON) 16,840,313 884,400 SDL, Inc. (NON) 192,799,200 2,193,590 Solectron Corp. (NON) 208,665,249 2,652,100 Texas Instruments, Inc. 256,922,188 1,091,160 Vitesse Semiconductor Corp. (NON) 57,217,703 3,380,380 Xilinx, Inc. (NON) 153,701,653 --------------- 4,736,745,880 Entertainment (0.5%) - -------------------------------------------------------------------------------------------------------------------------- 1,655,200 International Speedway Corp. Class A 83,380,700 2,309,600 SFX Entertainment, Inc. Class A (NON) 83,578,650 --------------- 166,959,350 Financial (0.7%) - -------------------------------------------------------------------------------------------------------------------------- 3,838,400 Intuit, Inc. (NON) 230,064,100 Gaming & Lottery (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 4,123,880 Harrah's Entertainment, Inc. (NON) 109,025,078 Health Care Services (0.5%) - -------------------------------------------------------------------------------------------------------------------------- 3,266,200 IMS Health, Inc. 88,799,813 2,276,470 Lincare Holdings, Inc. (NON) 78,965,053 --------------- 167,764,866 Insurance (0.6%) - -------------------------------------------------------------------------------------------------------------------------- 1,608,000 American International Group, Inc. 173,865,000 Investment Banking/Brokerage (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 2,622,300 Schwab (Charles) Corp. 100,630,763 Lodging/Tourism (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 4,165,100 Extended Stay America, Inc. (NON) 31,758,888 1,440,800 Four Seasons Hotels, Inc. (Canada) (NON) 76,722,600 --------------- 108,481,488 Media (3.1%) - -------------------------------------------------------------------------------------------------------------------------- 86,367 About.com, Inc. (NON) 7,751,438 3,848,900 America Online, Inc. (NON) 290,351,394 419,600 CNET, Inc. (NON) 23,812,300 1,499,000 Lycos, Inc. (NON) 119,264,188 85,997 OpenTV Corp. (NON) 6,901,259 3,556,600 Time Warner, Inc. 257,631,213 327,400 TV Guide, Inc. (NON) 14,078,200 4,292,800 Viacom, Inc. Class B (NON) 259,446,100 34,350 Yahoo! Inc. (NON) 14,862,816 --------------- 994,098,908 Medical Technology (0.9%) - -------------------------------------------------------------------------------------------------------------------------- 520,000 PE Corp.-PE Biosystems Group 62,562,500 5,265,290 Sybron International Corp. (NON) (AFF) 129,986,847 1,966,900 Waters Corp. (NON) 104,245,700 --------------- 296,795,047 Natural Gas Utilities (0.3%) - -------------------------------------------------------------------------------------------------------------------------- 2,659,500 Williams Cos., Inc. 81,280,969 Pharmaceuticals (1.9%) - -------------------------------------------------------------------------------------------------------------------------- 2,589,000 Elan Corp. PLC ADR (Ireland) (NON) 76,375,500 221,600 IDEXX Laboratories, Inc. (NON) 3,573,300 824,620 Medicis Pharmaceutical Corp. Class A (NON) 35,097,889 4,944,300 Schering-Plough Corp. 208,587,656 3,447,300 Warner-Lambert Co. 282,463,144 --------------- 606,097,489 Restaurants (0.2%) - -------------------------------------------------------------------------------------------------------------------------- 10,142,287 J.D. Wetherspoon PLC (United Kingdom) (AFF) 71,105,911 Retail (5.0%) - -------------------------------------------------------------------------------------------------------------------------- 682,700 Amazon.com, Inc. (NON) 51,970,538 213,600 Ames Department Stores, Inc. (NON) 6,154,350 6,861,960 Bed Bath & Beyond, Inc. (NON) 238,453,110 718,203 Costco Wholesale Corp. (NON) 65,536,024 1,026,400 Dayton Hudson Corp. 75,376,250 2,428,900 Dollar Tree Stores, Inc. (NON) 117,649,844 5,277,600 Home Depot, Inc. (The) 361,845,450 2,713,900 Kohls Corp. (NON) 195,909,656 233,900 Linens 'N Things, Inc. (NON) 6,929,288 2,392,000 TJX Cos., Inc. (The) 48,886,500 4,950,400 Wal-Mart Stores, Inc. 342,196,400 1,237,100 Whole Foods Market, Inc. (NON) 57,370,513 792,600 Williams-Sonoma, Inc. (NON) 36,459,600 --------------- 1,604,737,523 Software (11.3%) - -------------------------------------------------------------------------------------------------------------------------- 285,167 Agile Software Corp. (NON) 61,948,075 2,897,930 Amdocs Ltd. (NON) 99,978,585 166,460 Brio Technology, Inc. (NON) 6,991,320 1,201,690 BroadVision, Inc. (NON) 204,362,406 172,480 Check Point Software Technologies Ltd. (Israel) (NON) 34,280,400 54,400 E.piphany, Inc. (NON) 12,138,000 2,186,090 Electronic Arts, Inc. (NON) 183,631,560 921,770 I2 Technologies, Inc. (NON) 179,745,150 186,303 Informatica Corp. (NON) 19,817,982 730,060 Lernout & Hauspie Speech Products N.V. (Belgium) (NON) 33,765,275 1,401,640 Macromedia, Inc. (NON) 102,494,925 102,600 Micromuse, Inc. (NON) 17,442,000 5,849,200 Microsoft Corp. (NON) 682,894,100 6,756,600 Misys PLC (United Kingdom) 105,326,002 3,266,100 Oracle Corp. (NON) 366,007,331 8,473,440 Parametric Technology Corp. (NON) 229,312,470 382,900 Phone.com, Inc. (NON) 44,392,469 1,158,300 Portal Software, Inc. (NON) 119,160,113 2,239,600 Rational Software Corp. (NON) 110,020,350 377,900 Silknet Software, Inc. (NON) 62,636,925 529,748 Software.com, Inc. (NON) 50,855,808 2,837,020 Synopsys, Inc. (NON) 189,371,085 3,779,300 VERITAS Software Corp. (NON) 540,912,313 1,172,700 Vignette Corp. (NON) 191,150,100 --------------- 3,648,634,744 Technology Services (6.7%) - -------------------------------------------------------------------------------------------------------------------------- 2,030,880 Affiliated Computer Services, Inc. Class A (NON) 93,420,480 158,000 Chemdex Corp. (NON) 17,538,000 929,400 CMG Information Services, Inc. (NON) 257,327,625 2,063,000 Exodus Communications, Inc. (NON) 183,220,188 38,497 Freemarkets, Inc. (NON) 13,139,507 1,065,000 InfoSpace.com, Inc. (NON) 227,910,000 67,700 Intertrust Technologies Corp. (NON) 7,963,213 425,000 RealNetworks, Inc. (NON) 51,132,813 2,105,900 Sapient Corp. (NON) 296,800,281 4,125,300 USWeb Corp. (NON) 183,318,019 2,319,100 Verio, Inc. (NON) 107,113,431 2,908,120 VeriSign, Inc. (NON) 555,269,163 287,600 Viant Corp. (NON) 28,472,400 2,189,970 Whittman-Hart, Inc. (NON) 117,437,141 843,070 Ziff-Davis, Inc. (NON) 17,704,470 --------------- 2,157,766,731 Telecommunications (11.5%) - -------------------------------------------------------------------------------------------------------------------------- 2,223,000 Allegiance Telecom, Inc. (NON) 205,071,750 3,881,870 American Tower Corp. Class A (NON) 118,639,652 224,400 CoreComm Ltd. (NON) 13,323,750 2,534,900 Covad Communications Group 144A (NON) 141,795,969 1,369,400 Focal Communications Corp. (NON) 33,036,775 4,966,403 Global Crossing Ltd. (NON) 248,320,150 5,268,200 Global TeleSystems Group, Inc. (NON) 182,411,425 282,300 Intermedia Communications, Inc. (NON) 10,956,769 617,000 Level 3 Communications, Inc. (NON) 50,516,875 3,513,900 MCI WorldCom, Inc. (NON) 186,456,319 6,770,600 McLeod, Inc. Class A (NON) 398,619,075 8,540,400 Metromedia Fiber Network, Inc. Class A (NON) 409,405,425 1,543,300 NEXTEL Communications, Inc. Class A (NON) 159,152,813 6,571,620 NEXTLINK Communications, Inc. Class A (NON) 545,855,186 1,136,200 NorthPoint Communications Group, Inc. (NON) 27,268,800 1,612,800 NTL, Inc. (NON) 201,196,800 1,212,740 Pinnacle Holdings, Inc. (NON) 51,389,858 184,300 PSINet, Inc. (NON) 11,380,525 251,900 Spectrasite Holdings, Inc. (NON) 2,739,413 3,687,100 Sprint Corp. 248,187,901 3,131,100 Sprint PCS (NON) 320,937,750 1,690,780 WinStar Communications, Inc. (NON) 127,231,195 --------------- 3,693,894,175 Transaction Processing (0.7%) - -------------------------------------------------------------------------------------------------------------------------- 1,011,600 CheckFree Holdings Corp. (NON) 105,712,200 4,818,295 Concord EFS, Inc. (NON) 124,071,096 --------------- 229,783,296 --------------- Total Common Stocks (cost $14,152,890,204) $31,740,609,079 SHORT-TERM INVESTMENTS (1.0%) (a) PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------------------------------------------------------------------- $50,000,000 Federal Home Loan Mortgage Corp. for an effective yield of 5.74%, February 15, 2000 $ 49,641,250 50,000,000 Federal Home Loan Mortgage Corp. for an effective yield of 5.53%, February 9, 2000 49,700,458 142,429,000 Interest in $578,946,000 joint repurchase agreement dated December 31, 1999 with Morgan (J.P.) & Co. Inc. due January 3, 2000 with respect to various U.S. Treasury obligations -- maturity value of $142,458,673 for an effective yield of 2.50% 142,429,000 75,000,000 Interest in $75,000,000 repurchase agreement dated December 31, 1999 with S.B.C. Warburg Inc. due January 3, 2000 with respect to various U.S. Treasury obligations -- maturity value of $75,025,000 for an effective yield of 4.00% 75,000,000 --------------- Total Short-Term Investments (cost $316,770,708) $ 316,770,708 - -------------------------------------------------------------------------------------------------------------------------- Total Investments (cost $14,469,660,912) (b) $32,057,379,787 - -------------------------------------------------------------------------------------------------------------------------- (a) Percentages indicated are based on net assets of $32,207,575,043. (b) The aggregate identified cost on a tax basis is $14,485,878,500,resulting in gross unrealized appreciation and depreciation of $17,761,172,209 and $189,670,922, respectively, or net unrealized appreciation of $17,571,501,287. (NON) Non-income-producing security. (AFF) Affiliated companies (Note 5). 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. - ------------------------------------------------------------------------------- Futures Contracts Outstanding at December 31, 1999 (Unaudited) Aggregate Face Expiration Unrealized Total Value Value Date Appreciation - ------------------------------------------------------------------------------- S&P 500 Index (Long) $125,043,850 $124,560,794 Mar-00 $483,056 - ------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities December 31, 1999 (Unaudited) Assets - ----------------------------------------------------------------------------------------------- Investments in securities, at value (identified cost $14,469,660,912) (Note 1) $32,057,379,787 - ----------------------------------------------------------------------------------------------- Cash 3,277,878 - ----------------------------------------------------------------------------------------------- Dividends, interest and other receivables 4,217,372 - ----------------------------------------------------------------------------------------------- Receivable for shares of the fund sold 33,874,841 - ----------------------------------------------------------------------------------------------- Receivable for securities sold 462,475,913 - ----------------------------------------------------------------------------------------------- Receivable for variation margin 112,643 - ----------------------------------------------------------------------------------------------- Total assets 32,561,338,434 Liabilities - ----------------------------------------------------------------------------------------------- Payable for securities purchased 153,000,850 - ----------------------------------------------------------------------------------------------- Payable for shares of the fund repurchased 148,984,468 - ----------------------------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 30,743,937 - ----------------------------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 2,244,867 - ----------------------------------------------------------------------------------------------- Payable for compensation of Trustees (Note 2) 215,205 - ----------------------------------------------------------------------------------------------- Payable for administrative services (Note 2) 14,496 - ----------------------------------------------------------------------------------------------- Payable for distribution fees (Note 2) 18,001,749 - ----------------------------------------------------------------------------------------------- Other accrued expenses 557,819 - ----------------------------------------------------------------------------------------------- Total liabilities 353,763,391 - ----------------------------------------------------------------------------------------------- Net assets $32,207,575,043 Represented by - ----------------------------------------------------------------------------------------------- Paid-in capital (Notes 1 and 4) $13,739,762,271 - ----------------------------------------------------------------------------------------------- Accumulated net investment loss (Note 1) (101,953,584) - ----------------------------------------------------------------------------------------------- Accumulated net realized gains on investments (Note 1) 981,564,425 - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of investments 17,588,201,931 - ----------------------------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $32,207,575,043 Computation of net asset value and offering price - ----------------------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($17,940,842,972 divided by 197,260,782 shares) $90.95 - ----------------------------------------------------------------------------------------------- Offering price per class A share (100/94.25 of $90.95)* $96.50 - ----------------------------------------------------------------------------------------------- Net asset value and offering price per class B share ($11,892,069,718 divided by 138,289,475 shares)** $85.99 - ----------------------------------------------------------------------------------------------- Net asset value and offering price per class C share ($9,490,653 divided by 104,693 shares)** $90.65 - ----------------------------------------------------------------------------------------------- Net asset value and redemption price per class M share ($712,487,281 divided by 8,062,658 shares) $88.37 - ----------------------------------------------------------------------------------------------- Offering price per class M share (100/96.50 of $88.37)* $91.58 - ----------------------------------------------------------------------------------------------- Net asset value, offering price and redemption price per class Y share ($1,652,684,419 divided by 17,885,247 shares) $92.40 - ----------------------------------------------------------------------------------------------- * On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales, the offering price is reduced. ** Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. The accompanying notes are an integral part of these financial statements.
Statement of operations Six months ended December 31, 1999 (Unaudited) Investment income: - ----------------------------------------------------------------------------------------------- Dividends (net of foreign tax of $29,256, including dividend income of $399,370 from investments in affiliated issuers) (Note 5) $ 21,487,662 - ----------------------------------------------------------------------------------------------- Interest 5,830,585 - ----------------------------------------------------------------------------------------------- Total investment income 27,318,247 Expenses: - ----------------------------------------------------------------------------------------------- Compensation of Manager (Note 2) 56,498,636 - ----------------------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 14,105,833 - ----------------------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 148,620 - ----------------------------------------------------------------------------------------------- Administrative services (Note 2) 28,658 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 16,361,290 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 38,403,220 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class C (Note 2) 11,254 - ----------------------------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 2,004,484 - ----------------------------------------------------------------------------------------------- Reports to shareholders 207,213 - ----------------------------------------------------------------------------------------------- Registration fees 66,560 - ----------------------------------------------------------------------------------------------- Auditing 55,027 - ----------------------------------------------------------------------------------------------- Legal 64,939 - ----------------------------------------------------------------------------------------------- Postage 741,072 - ----------------------------------------------------------------------------------------------- Other 1,716,783 - ----------------------------------------------------------------------------------------------- Total expenses 130,413,589 - ----------------------------------------------------------------------------------------------- Expense reduction (Note 2) (1,141,758) - ----------------------------------------------------------------------------------------------- Net expenses 129,271,831 - ----------------------------------------------------------------------------------------------- Net investment loss (101,953,584) - ----------------------------------------------------------------------------------------------- Net realized gain on investments (Notes 1, 3, and 5) (including realized loss of $106,695,558 on sales of investments in affiliated issuers) 1,093,398,642 - ----------------------------------------------------------------------------------------------- Net realized loss on foreign currency transactions (Note 1) (893,003) - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of assets and liabilities in foreign currency during the period 692 - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of investments during the period 9,905,764,973 - ----------------------------------------------------------------------------------------------- Net gain on investments 10,998,271,304 - ----------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $10,896,317,720 - ----------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets Six months ended Year ended December 31 June 30 1999* 1999 - --------------------------------------------------------------------------------------------------------------- Increase in net assets - --------------------------------------------------------------------------------------------------------------- Operations: - --------------------------------------------------------------------------------------------------------------- Net investment loss $ (101,953,584) $ (155,256,135) - --------------------------------------------------------------------------------------------------------------- Net realized gain on investments and foreign currency transactions 1,092,505,639 2,352,943,195 - --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 9,905,765,665 997,121,712 - --------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 10,896,317,720 3,194,808,772 - --------------------------------------------------------------------------------------------------------------- Distributions to shareholders: - --------------------------------------------------------------------------------------------------------------- From net realized gain on investments Class A (1,314,507,212) (332,350,742) - --------------------------------------------------------------------------------------------------------------- Class B (933,682,378) (257,923,945) - --------------------------------------------------------------------------------------------------------------- Class C (488,124) -- - --------------------------------------------------------------------------------------------------------------- Class M (54,386,506) (14,531,244) - --------------------------------------------------------------------------------------------------------------- Class Y (125,842,222) (15,917,465) - --------------------------------------------------------------------------------------------------------------- Increase from capital share transactions (Note 4) 2,016,842,886 114,640,051 - --------------------------------------------------------------------------------------------------------------- Total increase in net assets 10,484,254,164 2,688,725,427 Net assets - --------------------------------------------------------------------------------------------------------------- Beginning of year 21,723,320,879 19,034,595,452 - --------------------------------------------------------------------------------------------------------------- End of year (including accumulated net investment loss of $101,953,584 and $--, respectively) $32,207,575,043 $21,723,320,879 - --------------------------------------------------------------------------------------------------------------- * Unaudited The accompanying notes are an integral part of these financial statements.
Financial highlights (For a share outstanding throughout the period) CLASS A - --------------------------------------------------------------------------------------------------------------------------------- Six months ended Per-share December 31 operating performance (Unaudited) Year ended June 30 - --------------------------------------------------------------------------------------------------------------------------------- 1999 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $65.61 $57.68 $44.47 $42.99 $29.58 $21.88 - --------------------------------------------------------------------------------------------------------------------------------- Investment operations - --------------------------------------------------------------------------------------------------------------------------------- Net investment loss (.23)(c) (.32)(c) (.25) (.20)(c) (.21)(c) (.12) - --------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments 32.87 10.13 14.55 2.00 13.62 8.02 - --------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 32.64 9.81 14.30 1.80 13.41 7.90 - --------------------------------------------------------------------------------------------------------------------------------- Less distributions: - --------------------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (7.30) (1.88) (1.09) (.26) -- (.15) - --------------------------------------------------------------------------------------------------------------------------------- In excess of net realized gains -- -- -- (.06) -- (.04) - --------------------------------------------------------------------------------------------------------------------------------- From return of capital -- -- -- -- -- (.01) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (7.30) (1.88) (1.09) (.32) -- (.20) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $90.95 $65.61 $57.68 $44.47 $42.99 $29.58 - --------------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - --------------------------------------------------------------------------------------------------------------------------------- Total return at net asset value (%)(a) 51.09* 17.81 32.75 4.26 45.34 36.36 - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $17,940,843 $11,817,798 $10,163,386 $7,381,624 $4,752,611 $1,341,877 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) (b) .44* .93 .98 1.06 1.11 1.13 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment loss to average net assets (%) (.32)* (.56) (.49) (.48) (.54) (.55) - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99 - --------------------------------------------------------------------------------------------------------------------------------- + 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 year ended June 30, 1996 and thereafter includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2) (c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during the period.
Financial highlights (For a share outstanding throughout the period) CLASS B - --------------------------------------------------------------------------------------------------------------------------------- Six months ended Per-share December 31 operating performance (Unaudited) Year ended June 30 - --------------------------------------------------------------------------------------------------------------------------------- 1999 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $62.51 $55.42 $43.08 $41.96 $29.09 $21.68 - --------------------------------------------------------------------------------------------------------------------------------- Investment operations - --------------------------------------------------------------------------------------------------------------------------------- Net investment loss (.42)(c) (.66)(c) (.62) (.49)(c) (.48)(c) (.23) - --------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments 31.20 9.63 14.05 1.93 13.35 7.84 - --------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 30.78 8.97 13.43 1.44 12.87 7.61 - --------------------------------------------------------------------------------------------------------------------------------- Less distributions: - --------------------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (7.30) (1.88) (1.09) (.26) -- (.15) - --------------------------------------------------------------------------------------------------------------------------------- In excess of net realized gains -- -- -- (.06) -- (.04) - --------------------------------------------------------------------------------------------------------------------------------- From return of capital -- -- -- -- -- (.01) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (7.30) (1.88) (1.09) (.32) -- (.20) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $85.99 $62.51 $55.42 $43.08 $41.96 $29.09 - --------------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - --------------------------------------------------------------------------------------------------------------------------------- Total return at net asset value (%)(a) 50.63* 17.01 31.78 3.50 44.24 35.34 - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $11,892,070 $8,382,292 $7,950,848 $6,359,447 $4,254,962 $1,013,379 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) (b) .74* 1.60 1.73 1.81 1.87 1.87 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment loss to average net assets (%) (.62)* (1.23) (1.24) (1.23) (1.30) (1.30) - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99 - --------------------------------------------------------------------------------------------------------------------------------- + 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 year ended June 30, 1996 and thereafter includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2) (c) Per share net investment loss has been determined on the basis of the 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 December 31 - --------------------------------------------------------------------------------------------------------------------------------- 1999 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $65.31 - --------------------------------------------------------------------------------------------------------------------------------- Investment operations - --------------------------------------------------------------------------------------------------------------------------------- Net investment loss (.41)(c) - --------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments 33.05 - --------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 32.64 - --------------------------------------------------------------------------------------------------------------------------------- Less distributions: - --------------------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (7.30) - --------------------------------------------------------------------------------------------------------------------------------- In excess of net realized gains -- - --------------------------------------------------------------------------------------------------------------------------------- From return of capital -- - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (7.30) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $90.65 - --------------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - --------------------------------------------------------------------------------------------------------------------------------- Total return at net asset value (%)(a) 51.31* - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $9,491 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) (b) .70* - --------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment loss to average net assets (%) (.60)* - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 27.93* - --------------------------------------------------------------------------------------------------------------------------------- + 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 year ended June 30, 1996 and thereafter includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2) (c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during the period.
Financial highlights (For a share outstanding throughout the period) CLASS M - --------------------------------------------------------------------------------------------------------------------------------- Six months ended For the period Per-share December 31 Dec. 1,1994+ operating performance (Unaudited) Year ended June 30 to June 30 - --------------------------------------------------------------------------------------------------------------------------------- 1999 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $64.05 $56.65 $43.91 $42.66 $29.51 $24.72 - --------------------------------------------------------------------------------------------------------------------------------- Investment operations - --------------------------------------------------------------------------------------------------------------------------------- Net investment loss (.40)(c) (.58)(c) (.49) (.40)(c) (.40)(c) (.05) - --------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments 32.02 9.86 14.32 1.97 13.55 5.04 - --------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 31.62 9.28 13.83 1.57 13.15 4.99 - --------------------------------------------------------------------------------------------------------------------------------- Less distributions: - --------------------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (7.30) (1.88) (1.09) (.26) -- (.15) - --------------------------------------------------------------------------------------------------------------------------------- In excess of net realized gains -- -- -- (.06) -- (.04) - --------------------------------------------------------------------------------------------------------------------------------- From return of capital -- -- -- -- -- (.01) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (7.30) (1.88) (1.09) (.32) -- (.20) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $88.37 $64.05 $56.65 $43.91 $42.66 $29.51 - --------------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - --------------------------------------------------------------------------------------------------------------------------------- Total return at net asset value (%)(a) 50.73* 17.19 32.09 3.75 44.56 20.40* - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $712,487 $491,209 $444,325 $337,535 $210,404 $16,011 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) (b) .69* 1.43 1.48 1.56 1.64 .94* - --------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment loss to average net assets (%) (.57)* (1.06) (.99) (.98) (1.06) (.53)* - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99 - --------------------------------------------------------------------------------------------------------------------------------- + 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 year ended June 30, 1996 and thereafter includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2) (c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during the period.
Financial highlights (For a share outstanding throughout the period) CLASS Y - --------------------------------------------------------------------------------------------------------------------------------- Six months ended For the period Per-share December 31 July 19,1994+ operating performance (Unaudited) Year ended June 30 to June 30 - --------------------------------------------------------------------------------------------------------------------------------- 1999 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $66.49 $58.28 $44.82 $43.21 $29.66 $22.59 - --------------------------------------------------------------------------------------------------------------------------------- Investment operations - --------------------------------------------------------------------------------------------------------------------------------- Net investment loss (.14)(c) (.19)(c) (.13)(c) (.09)(c) (.11)(c) (.04) - --------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments 33.35 10.28 14.68 2.02 13.66 7.31 - --------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 33.21 10.09 14.55 1.93 13.55 7.27 - --------------------------------------------------------------------------------------------------------------------------------- Less distributions: - --------------------------------------------------------------------------------------------------------------------------------- From net realized gain on investments (7.30) (1.88) (1.09) (.26) -- (.15) - --------------------------------------------------------------------------------------------------------------------------------- In excess of net realized gains -- -- -- (.06) -- (.04) - --------------------------------------------------------------------------------------------------------------------------------- From return of capital -- -- -- -- -- (.01) - --------------------------------------------------------------------------------------------------------------------------------- Total distributions (7.30) (1.88) (1.09) (.32) -- (.20) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $92.40 $66.49 $58.28 $44.82 $43.21 $29.66 - --------------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - --------------------------------------------------------------------------------------------------------------------------------- Total return at net asset value (%)(a) 51.26* 18.11 33.05 4.54 45.68 32.42* - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $1,652,684 $1,032,022 $476,037 $254,126 $118,640 $24,538 - --------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%) (b) .31* .68 .73 .81 .86 .83* - --------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment loss to average net assets (%) (.19)* (.32) (.24) (.23) (.29) (.26)* - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 27.93* 76.54 65.21 66.74 36.61 56.99 - --------------------------------------------------------------------------------------------------------------------------------- + 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 year ended June 30, 1996 and thereafter includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios exclude these amounts. (Note 2) (c) Per share net investment loss has been determined on the basis of the weighted average number of shares outstanding during the period.
Notes to financial statements December 31, 1999 (Unaudited) Note 1 Significant accounting policies Putnam New Opportunities Fund (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 the judgment of Putnam Investment Management, Inc. ("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc. possess above-average, long-term growth potential. The fund, which is at present generally closed to new investors, 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 and class C shares. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C 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 of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. 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 sales price on its principal exchange, 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. Other investments, including restricted securities, are stated at fair value following procedures approved by the Trustees. B) Joint trading account Pursuant to an exemptive order issued by the Securities and Exchange Commission, the fund may transfer uninvested cash balances into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Management. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. C) Repurchase agreements The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. 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). Gains or losses on securities sold are determined on the identified cost basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the fund is informed of the ex-dividend date. E) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities are recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when accrued or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such 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. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments. F) 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 six months ended December 31, 1999, the fund had no borrowings against the line of credit. G) 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. H) 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. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. Note 2 Management fee, administrative services and other transactions Compensation of Putnam Management, for management and investment advisory services is paid quarterly based on the average net assets of the fund. 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. 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 six months ended December 31, 1999, fund expenses were reduced by $1,141,758 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 $7,430 has been allocated to the fund, and an additional fee for each Trustee's meeting attended. 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 invested in certain Putnam funds until distribution in accordance with the Deferral Plan. The fund has adopted an unfunded noncontributory defined benefit pension plan (the "Pension Plan") covering all Trustees of the fund who have served as a Trustee for at least five years. 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 at an annual rate of 0.25%, 0.85%, 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 six months ended December 31, 1999, Putnam Mutual Funds Corp., acting as underwriter received net commissions of $755,040 and $25,463 from the sale of class A and class M shares, respectively, and received $4,474,708 and $170 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 six months ended December 31, 1999, Putnam Mutual Funds Corp., acting as underwriter received $19,222 on class A redemptions. Note 3 Purchases and sales of securities During the six months ended December 31, 1999, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $6,641,935,927 and $7,173,909,291, respectively. There were no purchases and sales of U.S. government obligations. Note 4 Capital shares At December 31, 1999, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Six months ended December 31, 1999 - ----------------------------------------------------------------------------- Class A Shares Amount - ----------------------------------------------------------------------------- Shares sold 22,965,428 $1,687,981,271 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 15,449,159 1,255,087,472 - ----------------------------------------------------------------------------- 38,414,587 2,943,068,743 Shares repurchased (21,288,317) (1,511,994,685) - ----------------------------------------------------------------------------- Net increase 17,126,270 $1,431,074,058 - ----------------------------------------------------------------------------- Year ended June 30, 1999 - ----------------------------------------------------------------------------- Class A Shares Amount - ----------------------------------------------------------------------------- Shares sold 45,594,076 $2,572,784,440 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 6,046,651 317,327,118 - ----------------------------------------------------------------------------- 51,640,727 2,890,111,558 Shares repurchased (47,716,775) (2,689,861,510) - ----------------------------------------------------------------------------- Net increase 3,923,952 $ 200,250,048 - ----------------------------------------------------------------------------- Six months ended December 31, 1999 - ----------------------------------------------------------------------------- Class B Shares Amount - ----------------------------------------------------------------------------- Shares sold 5,273,093 $371,936,878 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 10,606,943 815,037,985 - ----------------------------------------------------------------------------- 15,880,036 1,186,974,863 Shares repurchased (11,680,665) (806,378,332) - ----------------------------------------------------------------------------- Net increase 4,199,371 $380,596,531 - ----------------------------------------------------------------------------- Year ended June 30, 1999 - ----------------------------------------------------------------------------- Class B Shares Amount - ----------------------------------------------------------------------------- Shares sold 9,985,427 $ 532,229,736 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 4,483,603 224,942,388 - ----------------------------------------------------------------------------- 14,469,030 757,172,124 Shares repurchased (23,849,418) (1,272,000,118) - ----------------------------------------------------------------------------- Net decrease (9,380,388) $(514,827,994) - ----------------------------------------------------------------------------- For the period July 26, 1999 (commencement of operations) to December 31, 1999 - ----------------------------------------------------------------------------- Class C Shares Amount - ----------------------------------------------------------------------------- Shares sold 103,453 $7,950,316 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 5,221 422,983 - ----------------------------------------------------------------------------- 108,674 8,373,299 Shares repurchased (3,981) (307,872) - ----------------------------------------------------------------------------- Net increase 104,693 $8,065,427 - ----------------------------------------------------------------------------- Six months ended December 31, 1999 - ----------------------------------------------------------------------------- Class M Shares Amount - ----------------------------------------------------------------------------- Shares sold 989,865 $67,393,131 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 650,643 51,368,282 - ----------------------------------------------------------------------------- 1,640,508 118,761,413 Shares repurchased (1,246,563) (85,429,994) - ----------------------------------------------------------------------------- Net increase 393,945 $33,331,419 - ----------------------------------------------------------------------------- Year ended June 30, 1999 - ----------------------------------------------------------------------------- Class M Shares Amount - ----------------------------------------------------------------------------- Shares sold 1,659,416 $ 90,965,413 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 266,448 13,693,360 - ----------------------------------------------------------------------------- 1,925,864 104,658,773 Shares repurchased (2,100,915) (116,130,595) - ----------------------------------------------------------------------------- Net decrease (175,051) $(11,471,822) - ----------------------------------------------------------------------------- Six months ended December 31, 1999 - ----------------------------------------------------------------------------- Class Y Shares Amount - ----------------------------------------------------------------------------- Shares sold 5,532,291 $404,075,572 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,525,129 125,842,222 - ----------------------------------------------------------------------------- 7,057,420 529,917,794 Shares repurchased (4,694,126) (366,142,343) - ----------------------------------------------------------------------------- Net increase 2,363,294 $163,775,451 - ----------------------------------------------------------------------------- Year ended June 30, 1999 - ----------------------------------------------------------------------------- Class Y Shares Amount - ----------------------------------------------------------------------------- Shares sold 10,843,488 $643,820,161 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 299,803 15,917,465 - ----------------------------------------------------------------------------- 11,143,291 659,737,626 Shares repurchased (3,789,291) (219,047,807) - ----------------------------------------------------------------------------- Net increase 7,354,000 $440,689,819 - ----------------------------------------------------------------------------- Note 5 Transactions with Affiliated Companies
Transactions during the period 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 - ------------------------------------------------------------------------------------------------------- Celestica, Inc. $22,001,286 $ 1,953,664 $ -- $ -- Extended Stay America, Inc. -- 15,961,970 -- -- Intuit, Inc. 10,675 -- -- -- ITT Educational Services, Inc. -- 50,661,200 -- -- J.D. Wetherspoon Plc 3,689 -- 263,300 71,105,911 Medicis Pharmaceutical Corp. Class A -- 26,221,371 -- -- Micrel, Inc. -- -- -- -- Pediatrix Medical Group, Inc. -- 32,455,977 -- -- Snyder Communications, Inc. -- 160,863,124 -- -- Stewart Enterprises, Inc. Class A -- 92,105,612 136,070 -- Sybron International Corp. 6,712 -- -- 129,986,847 Transkaryotic Therapies, Inc. 3,970,211 -- -- 43,890,000 USWEB 16,890,602 2,064,659 -- -- Westwood One, Inc. 9,620,991 -- -- -- Whittman-Hart, Inc. 17,477,619 28,540,253 -- -- - ------------------------------------------------------------------------------------------------------- Totals $69,981,785 $410,827,830 $399,370 $244,982,758 - -------------------------------------------------------------------------------------------------------
The Putnam family of funds The following is a complete list of Putnam's open-end mutual funds. Please call your financial advisor or Putnam at 1-800-225-1581 to obtain a prospectus for any Putnam fund. It contains more complete information, including charges and expenses. Please read it carefully before you invest or send money. GROWTH FUNDS Asia Pacific Growth Fund Capital Appreciation Fund [DBL. DAGGER] Capital Opportunities Fund Europe Growth Fund Global Equity Fund Global Growth Fund Global Natural Resources Fund Growth Opportunities Fund Health Sciences Trust International Growth Fund International New Opportunities Fund Investors Fund New Century Growth Fund New Opportunities Fund [DBL. DAGGER] OTC & Emerging Growth Fund Research Fund Tax Smart Equity Fund Vista Fund Voyager Fund Voyager Fund II GROWTH AND INCOME FUNDS Balanced Retirement Fund Convertible Income-Growth Trust Equity Income Fund The George Putnam Fund of Boston Global Growth and Income Fund The Putnam Fund for Growth and Income Growth and Income Fund II International Growth and Income Fund New Value Fund Small Cap Value Fund Utilities Growth and Income Fund INCOME FUNDS American Government Income Fund Diversified Income Trust Global Governmental Income Trust High Yield Advantage Fund [DBL. DAGGER] High Yield Trust [DBL. DAGGER] High Yield Trust II Income Fund Intermediate U.S. Government Income Fund Money Market Fund ** Preferred Income Fund Strategic Income Fund * U.S. Government Income Trust TAX-FREE INCOME FUNDS Municipal Income Fund Tax Exempt Income Fund Tax Exempt Money Market Fund** Tax-Free High Yield Fund Tax-Free Insured Fund State tax-free income funds [SECTION MARK] Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio and Pennsylvania State tax-free money market funds [SECTION MARK] ** California, New York ASSET ALLOCATION FUNDS Putnam Asset Allocation Funds--three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments. The three portfolios: Asset Allocation: Balanced Portfolio Asset Allocation: Conservative Portfolio Asset Allocation: Growth Portfolio * Formerly Putnam Diversified Income Trust II [DBL. DAGGER] Closed to new investors. Some exceptions may apply. Contact Putnam for details. [SECTION MARK] Not available in all states. ** An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve your investment at $1.00 per share, it is possible to lose money by investing in the fund. Check your account balances and current performance at www.putnaminv.com. 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 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 Daniel L. Miller Vice President and Fund Manager Kenneth W. Lang Vice President and Fund Manager Jeffrey R. Lindsey 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 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, 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 SA013-58388 852/358/983/526 2/00 PUTNAM INVESTMENTS [SCALE LOGO OMITTED] - --------------------------------------------------------------------------- Putnam New Opportunities Fund Supplement to Semiannual Report dated 12/31/99 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, and M shares, which are discussed more extensively in the annual report. SEMIANNUAL RESULTS AT A GLANCE - --------------------------------------------------------------------------- Total return for periods ended 12/31/99 NAV 6 months 51.26% 1 year 70.09 5 years 324.45 Annual average 33.53 Life of fund (since class A inception, 8/31/90) 1258.40 Annual average 32.26 Share value: NAV 6/30/99 $66.49 12/31/99 92.40 - --------------------------------------------------------------------------- Distributions: No. Income Capital gains Total 1 $7.30 -- $7.30 - --------------------------------------------------------------------------- Please note that past performance does not indicate future results. 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, typically are lower than the operating expenses applicable to class A shares. All returns assume reinvestment of distributions at net asset value. Performance data reflects an expense limitation previously in effect. Without the expense limitation, total returns would have been lower. 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-----