-----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, RdS+a3mamOijm2n8XY5M4VdkFUZcP1PgMjANMcfTVKfrgoWS6l/XtQjyMmXVTf0f 7GkgxN/lbjZnIGg2Pvep3A== 0000928816-02-000174.txt : 20020415 0000928816-02-000174.hdr.sgml : 20020415 ACCESSION NUMBER: 0000928816-02-000174 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM NEW OPPORTUNITIES FUND CENTRAL INDEX KEY: 0000865177 IRS NUMBER: 043091455 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06128 FILM NUMBER: 02566028 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: A6 ZIP: 02109 BUSINESS PHONE: 6172921000 N-30D 1 nof.txt PUTNAM NEW OPPORTUNITIES FUND Putnam New Opportunities Fund SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK 12-31-01 [SCALE LOGO OMITTED] FROM THE TRUSTEES [GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM III] Dear Shareholder: During the six months ended December 31, 2001, the growth stocks in which Putnam New Opportunities Fund invests remained under siege as investors continued to favor the value-oriented stocks of more established companies and companies in more stable industries. In addition, the growth stocks of companies in such industries as technology and telecommunications, which had led the recent market rise, were hit hardest as the global economy slowed. Your fund's management team has responded to these developments by realigning the fund's emphasis within the growth stock universe and, more importantly in our view, by continuing to adhere strictly to the fund's stated investment style. Both of these moves should allow the fund to take maximum advantage of the economic recovery that is widely expected to develop in the year ahead. As you will note in this report, we are now listing the team responsible for the fund's operation instead of naming individual fund managers. The change will not affect the way your fund is managed. Rather, it reflects Putnam's belief that mutual funds are more effectively overseen by teams rather than individuals. Respectfully yours, /S/ JOHN A. HILL /S/ GEORGE PUTNAM, III John A. Hill George Putnam, III Chairman of the Trustees President of the Funds February 13, 2002 REPORT FROM FUND MANAGEMENT The fund is managed by the Putnam Specialty Growth and Large-Cap Growth Teams During the six months ended December 31, 2001, Putnam New Opportunities Fund encountered two extremely different market environments. Despite a dramatic rebound in the U.S. stock market in the final three months of the period, the prior months were negatively affected by the severe economic slowdown in the United States and the September 11 terrorist attacks on New York and Washington. The consequence has been a loss for your fund for the first half of its 2002 fiscal year. For this six-month period, your fund's performance also lagged that of its benchmark index and its competitive universe, as measured by the Lipper Multi-Cap Growth Fund category. The primary reasons for this relative underperformance was its exposure to stocks of telecommunications services companies and independent power producers. Although the fund's positions in both sectors were reduced substantially by the close of the period, their sharp declines negatively affected returns. Total return for 6 months ended 12/31/01 Class A Class B Class C Class M NAV POP NAV CDSC NAV CDSC NAV POP - ----------------------------------------------------------------------- -14.57% -19.49% -14.90% -19.15% -14.89% -15.74% -14.77% -17.76% - ----------------------------------------------------------------------- Past performance is not indicative of future results. Performance information for longer periods and explanation of performance calculation methods begin on page 6. * SEPTEMBER TRAGEDY AND RECESSION TOOK THEIR TOLL ON GROWTH STOCKS At the start of your fund's fiscal year in July, the U.S. stock market was struggling with an economic slowdown that had begun in the fall of 2000. According to an announcement late in the year from the National Bureau of Economic Research, the U.S. economy officially entered recession in March 2001. Keep in mind that your fund's strategy has always been to invest in companies that we believe have the potential to grow significantly faster than market averages over time. These types of stocks, by their very nature, also tend to be most affected by market volatility. Consequently, the speed and magnitude of the economic slowdown and the impact it had on business spending, consumer behavior, and investor sentiment, led to sharp declines for growth stocks and for many holdings in the fund's portfolio. [GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS] TOP INDUSTRY SECTORS* Electronics 14.3% Retail 10.1% Pharmaceuticals 9.9% Media 7.3% Software 7.2% Footnote reads: *Based on net assets as of 12/31/01. Holdings will vary over time. Despite the challenging environment, by late summer we began to see signs of improvement. Companies that had been plagued by business spending cutbacks and low demand were working aggressively to cut costs and reduce their inventory gluts. We saw evidence of improving business trends for many companies, and it appeared that businesses would begin working their way toward more normal capital spending and ordering patterns. Of course, at that time, no one could have imagined the tragic events that were about to unfold in September. The terrorist attacks of September 11 were unprecedented in U.S. history and the extent of their impact on financial markets around the world was, in some sense, uncharted territory. The attacks forced the U.S. equity markets to close for four consecutive days -- the longest hiatus since the Great Depression -- and in their wake the Dow Jones Industrial Average posted its worst quarterly loss in 14 years. Immediately following the attacks, business activity and consumer spending were disrupted and stocks declined in anticipation of further capital spending cuts and increased economic and political uncertainty. In this weak market environment, we sought to take advantage of historically low valuations for stocks across many sectors. * POWERFUL REBOUND DIDN'T OFFSET EARLIER DECLINES Although stocks fell further in the wake of September 11, evidence of the U.S. market's resilience became apparent as early as October, when stocks began to recover. At the same time, the Federal Reserve Board continued its aggressive stance; during the period, it enacted five more interest-rate cuts, for a total of 11 in 2001, bringing short-term rates to their lowest level in four decades. The market environment continued to improve as investors reacted enthusiastically to calls for patriotism, government efforts to stimulate the economy, and positive military reports from Afghanistan. Investors also began to shift back into more aggressive growth stocks in anticipation of a recovery in 2002. In the final three months of the semiannual period, stocks surged. In many cases, those that had been hurt most earlier in the year staged the most dramatic rebounds. Although the improved environment led to a significant rebound in your fund's performance, it was not enough to offset the sharp declines of the prior months. Despite their strength at the close of the period, media and technology stocks in the portfolio hurt fund performance for the six-month period overall. Technology stocks had been hardest hit by the market decline as the slumping economy led consumers and businesses to cut back sharply on technology spending. While we remained focused on well-managed companies with solid business fundamentals, the downturn eventually punished even the largest and strongest technology companies. As the period came to a close, however, many of your fund's semiconductor and storage holdings made significant positive contributions to performance. Your fund's media holdings followed a similar pattern. After declining severely earlier in the period, stocks such as Clear Channel Communications, Inc. and Liberty Media Corporation rebounded in anticipation of a recovery in advertising rates in a strengthening economy. While some energy holdings in the portfolio rebounded in anticipation of more stable oil prices, the fund's investments in independent power producers dampened returns. This sector was hurt by well-publicized failure of Enron Corporation, which declared bankruptcy amid a flurry of accusations and pending government investigations. Although Enron was not in the fund's portfolio, the fund's investments in companies such as Mirant Corporation and Dynegy, Inc. were negatively affected. By the close of the period, we had significantly reduced the fund's positions in this sector, because we are much less optimistic about the success of energy deregulation and the growth potential of independent power producers. * SELECTED CONSUMER STOCKS HELPED RETURNS The weak economic environment drove consumers to value oriented retailers, which helped a number of stocks in the fund's portfolio. One well-known example was Wal-Mart Stores, Inc. Another strong retail performer was Kohl's Corporation, which operates stores targeted to middle-income customers. The fund's airline holdings also made a positive contribution to performance. In the aftermath of September 11, stocks of discount carriers such as Southwest Airlines Co. and Ryanair Holdings, Inc. performed well and continued to gain market share from large airlines, which were hit hard by the decline in business travel. While these holdings, and others discussed in this report, were viewed favorably at the end of the fiscal period, all are subject to review in accordance with the fund's investment strategy and may vary in the future. [GRAPHIC OMITTED: TOP 10 HOLDINGS] TOP 10 HOLDINGS Microsoft Corp. Software Maxim Integrated Products, Inc. Electronics Viacom, Inc. Entertainment Bed Bath & Beyond, Inc. Retail Pfizer, Inc. Pharmaceuticals Kohl's Corp. Retail Clear Channel Communications, Inc. Media UnitedHealth Group, Inc. Health care services VERITAS Software Corp. Software General Electric Co. Conglomerate Footnote reads: These holdings represent 19.3% of the fund's net assets as of 12/31/01. Portfolio holdings will vary over time. * OUTLOOK FOR GROWTH STOCKS IS OPTIMISTIC As always, your fund maintained its focus and remained fully invested in the sectors and stocks that we believe offer the strongest long-term growth prospects. As evidenced by strong gains in the latter half of the period, the fund was positioned to benefit from the dramatic rebound in growth stocks. While more short-term volatility is likely, we believe corporate restructurings, sustained productivity growth, lower energy prices, and monetary and fiscal stimulus should lift the U.S. economy out of recession in the first half of 2002 and improve corporate profits in the year's second half. As always, we believe investors with patience and a long-term perspective will be rewarded when we return to a more favorable environment for growth stocks. 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 12/31/01, there is no guarantee the fund will continue to hold these securities in the future. The fund invests all or a portion of its assets in small or midsize companies. Such investments increase the risk of greater price fluctuations. NEWS FROM THE TRUSTEES In July 2001, we welcomed Charles B. Curtis to Putnam's Board of Trustees. He brings an impressive list of credentials that include several key positions in Washington and directorships in education and energy-related industries. We look forward to the contributions Charles will make to the continued success of the Putnam funds. A NOTE ABOUT DUPLICATE MAILINGS In response to investors' requests, the SEC has modified mailing regulations for proxy statements, semiannual and annual reports and prospectuses. Putnam is now able to send a single copy of these materials to customers who share the same address. This change will automatically apply to all shareholders except those who notify us. If you would prefer to receive your own copy, please call Putnam at 1-800-225-1581. 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 12/31/01 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 -14.57% -19.49% -14.90% -19.15% -14.89% -15.74% -14.77% -17.76% - ------------------------------------------------------------------------------ 1 year -30.09 -34.12 -30.60 -34.07 -30.62 -31.31 -30.43 -32.87 - ------------------------------------------------------------------------------ 5 years 33.50 25.82 28.97 27.06 28.61 28.61 30.20 25.64 Annual average 5.95 4.70 5.22 4.91 5.16 5.16 5.42 4.67 - ------------------------------------------------------------------------------ 10 years 272.76 251.22 247.40 247.40 245.72 245.72 254.57 242.26 Annual average 14.06 13.39 13.26 13.26 13.21 13.21 13.49 13.09 - ------------------------------------------------------------------------------ Annual average (life of fund) 18.61 18.00 17.75 17.75 17.73 17.73 17.99 17.62 - ------------------------------------------------------------------------------ COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 12/31/01 Russell Midcap Consumer Growth Index price index - ------------------------------------------------------------------------------ 6 months -8.26% -0.34% - ------------------------------------------------------------------------------ 1 year -20.15 1.60 - ------------------------------------------------------------------------------ 5 years 53.98 11.44 Annual average 9.02 2.19 - ------------------------------------------------------------------------------ 10 years 186.62 28.57 Annual average 11.10 2.54 - ------------------------------------------------------------------------------ Annual average (life of fund) 14.10 2.66 - ------------------------------------------------------------------------------ Past performance does not indicate future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate and you may have a gain or a loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Returns at public offering price (POP) for class A and M shares reflect a sales charge of 5.75% and 3.50%, respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter. Class C shares reflect a 1% CDSC the first year that is eliminated thereafter. Performance for class B, C, and M shares before their inception are derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and higher operating expenses for such shares. For a portion of the period, this fund limited expenses, without which returns would have been lower. PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 12/31/01 Class A Class B Class C Class M - ------------------------------------------------------------------------------ Distributions* -- -- -- -- - ------------------------------------------------------------------------------ Share value: NAV POP NAV NAV NAV POP - ------------------------------------------------------------------------------ 6/30/01 $47.97 $50.90 $44.50 $47.21 $46.03 $47.70 - ------------------------------------------------------------------------------ 12/31/01 40.98 43.48 37.87 40.18 39.23 40.65 - ------------------------------------------------------------------------------ *The fund made no distributions during the period. 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 and no sales charge on redemption (except on certain redemptions of shares bought without 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 (except on certain redemptions of shares bought without an initial sales charge). Net asset value (NAV) is the value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares, not including any initial or contingent deferred sales charge. Public offering price (POP) is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. POP performance figures shown here assume the 5.75% maximum sales charge for class A shares and 3.50% for class M shares. Contingent deferred sales charge (CDSC) is a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund's class B CDSC declines from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase. COMPARATIVE BENCHMARKS Russell Midcap Growth Index is an unmanaged index of all medium and medium/small companies in the Russell 1000 Index chosen for their growth orientation. The index assumes reinvestment of all distributions and does not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index. Consumer price index (CPI) is a commonly used measure of inflation; it does not represent an investment return. A GUIDE TO THE FINANCIAL STATEMENTS These sections of the report, as well as the accompanying Notes, 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. This is done by first adding up all the fund's earnings -- from dividends and interest income -- and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings -- as well as any unrealized gains or losses over the period -- is added to or subtracted from the net investment result to determine the fund's net gain or loss for the fiscal 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, 2001 (Unaudited) COMMON STOCKS (98.3%) (a) NUMBER OF SHARES VALUE Advertising and Marketing Services (0.9%) - ------------------------------------------------------------------------------------------------------------------- 182,500 Interpublic Group of Companies, Inc. $ 5,391,050 3,190,000 Lamar Advertising Co. (NON) 135,064,600 73,200 Omnicom Group, Inc. 6,540,420 -------------- 146,996,070 Aerospace and Defense (0.2%) - ------------------------------------------------------------------------------------------------------------------- 337,800 Northrop Grumman Corp. 34,053,618 Airlines (1.3%) - ------------------------------------------------------------------------------------------------------------------- 5,015,800 Ryanair Holdings PLC ADR (Ireland) (NON) 160,756,390 3,180,000 Southwest Airlines Co. 58,766,400 ------------- 219,522,790 Banking (3.2%) - ------------------------------------------------------------------------------------------------------------------- 1,720,600 Bank of New York Company, Inc. (The) 70,200,480 1,280,000 Fifth Third Bancorp 78,502,400 3,895,000 National Commerce Financial Corp. 98,543,500 1,448,200 North Fork Bancorporation, Inc. 46,327,918 127,500 State Street Corp. 6,661,875 2,951,700 TCF Financial Corp. 141,622,566 1,765,000 Zions Bancorporation 92,803,700 ------------- 534,662,439 Beverage (0.4%) - ------------------------------------------------------------------------------------------------------------------- 199,400 Pepsi Bottling Group, Inc. (The) 4,685,900 1,330,700 PepsiCo, Inc. 64,791,783 ------------- 69,477,683 Biotechnology (3.2%) - ------------------------------------------------------------------------------------------------------------------- 890,000 Applera Corporation-Applied Biosystems Group 34,950,300 115,100 Biogen, Inc. (NON) 6,600,985 103,000 Chiron Corp. (NON) 4,515,520 972,800 Genzyme Corp. (NON) 58,231,808 557,000 ICOS Corp. (NON) 31,994,080 521,700 IDEC Pharmaceuticals Corp. (NON) 35,960,781 405,000 InterMune, Inc. (NON) 19,950,300 2,250,000 Invitrogen Corp. (NON) 139,342,500 3,238,300 MedImmune, Inc. (NON) 150,095,205 2,325,000 QIAGEN NV (Netherlands) (NON) 43,152,000 182,958 SICOR, Inc. (NON) 2,868,781 149,200 Waters Corp. (NON) 5,781,500 ------------- 533,443,760 Commercial and Consumer Services (3.6%) - ------------------------------------------------------------------------------------------------------------------- 2,960,000 CDW Computer Centers, Inc. (NON) 158,981,600 1,220,000 Cintas Corp. 58,560,000 994,200 eBay, Inc. (NON) 66,511,980 829,200 H&R Block, Inc. 37,065,240 2,033,200 Paychex, Inc. 70,857,020 2,150,000 Robert Half International, Inc. (NON) 57,405,000 226,700 Tech Data Corp. (NON) 9,811,576 2,880,000 TMP Worldwide, Inc. (NON) 123,552,000 627,393 Weight Watchers International, Inc. (NON) 21,218,431 ------------- 603,962,847 Communications Equipment (2.4%) - ------------------------------------------------------------------------------------------------------------------- 8,246,200 Cisco Systems, Inc. (NON) 149,338,682 1,955,000 Extreme Networks, Inc. (NON) 25,219,500 1,345,000 Juniper Networks, Inc. (NON) 25,487,750 1,179,400 Nokia OYJ ADR (Finland) 28,930,682 900,000 Polycom, Inc. (NON) 30,663,000 2,299,600 QUALCOMM, Inc. (NON) 116,129,800 5,845,000 Sonus Networks, Inc. (NON) 27,003,900 ------------- 402,773,314 Computers -- Hardware (3.9%) - ------------------------------------------------------------------------------------------------------------------- 1,585,000 Brocade Communications Systems, Inc. (NON) 52,495,200 4,267,400 Dell Computer Corp. (NON) 115,987,932 1,470,600 Emulex Corp. (NON) 58,103,406 1,868,600 Hewlett-Packard Co. 38,381,044 1,104,500 IBM Corp. 133,600,320 1,925,000 McDATA Corp. Class A (NON) 47,162,500 3,190,000 Network Appliance, Inc. (NON) 69,765,300 2,942,300 QLogic Corp. (NON) 130,961,773 ------------- 646,457,475 Computers -- Software and Services (1.1%) - ------------------------------------------------------------------------------------------------------------------- 4,570,100 VeriSign, Inc. (NON) 173,846,604 Computer Services (2.2%) - ------------------------------------------------------------------------------------------------------------------- 383,600 Affiliated Computer Services, Inc. Class A (NON) 40,711,468 1,315,000 BISYS Group, Inc. (The) (NON) 84,146,850 206,800 Concord EFS, Inc. (NON) 6,778,904 1,165,000 Convergys Corp. (NON) 43,675,850 1,183,000 Electronic Data Systems Corp. 81,094,650 198,750 Fiserv, Inc. (NON) 8,411,100 1,865,800 Jack Henry & Associates, Inc. 40,749,072 129,500 SEI Investments Co. 5,841,745 2,099,900 SunGard Data Systems, Inc. (NON) 60,750,107 ------------- 372,159,746 Conglomerates (2.6%) - ------------------------------------------------------------------------------------------------------------------- 6,080,000 General Electric Co. 243,686,400 3,104,000 Tyco International, Ltd. (Bermuda) 182,825,600 ------------- 426,512,000 Consumer Finance (1.2%) - ------------------------------------------------------------------------------------------------------------------- 1,838,200 AmeriCredit Corp. (NON) 57,995,210 2,514,600 Capital One Financial Corp. 135,662,670 151,800 Metris Companies, Inc. 3,902,778 1,127,266 Providian Financial Corp. 4,001,794 ------------- 201,562,452 Consumer Goods (0.2%) - ------------------------------------------------------------------------------------------------------------------- 117,900 Avon Products, Inc. 5,482,350 525,364 Colgate-Palmolive Co. 30,339,771 ------------- 35,822,121 Electrical Equipment (0.1%) - ------------------------------------------------------------------------------------------------------------------- 1,350,000 Power-One, Inc. (NON) 14,053,500 Electronics (14.3%) - ------------------------------------------------------------------------------------------------------------------- 168,500 Altera Corp. (NON) 3,575,570 270,500 Analog Devices, Inc. (NON) 12,007,495 3,255,000 Applied Micro Circuits Corp. (NON) 36,846,600 1,720,000 ASM Lithography Holdings NV (Netherlands) (NON) 29,326,000 2,160,800 Broadcom Corp. Class A (NON) 88,311,896 3,360,000 Celestica, Inc. (Canada) (NON) 135,710,400 181,800 Cypress Semiconductor Corp. (NON) 3,623,274 4,970,000 Finisar Corp. (NON) 50,544,900 6,067,700 Flextronics International, Ltd. (Singapore) (NON) 145,564,123 2,700,000 Integrated Device Technology, Inc. (NON) 71,793,000 7,025,400 Intel Corp. 220,948,830 255,400 Intersil Corp. Class A (NON) 8,236,650 3,318,400 Jabil Circuit, Inc. (NON) 75,394,048 1,632,673 KLA-Tencor Corp. (NON) 80,915,274 1,761,600 LAM Research Corp. (NON) 40,904,352 4,301,900 Linear Technology Corp. 167,946,176 3,683,700 LSI Logic Corp. (NON) 58,128,786 5,491,000 Marvell Technology Group, Ltd. (Bermuda) (NON) 196,687,620 7,591,100 Maxim Integrated Products, Inc. (NON) 398,608,661 1,770,000 Micrel, Inc. (NON) 46,427,100 2,095,000 Microchip Technology, Inc. (NON) 81,160,300 855,000 Novellus Systems, Inc. (NON) 33,729,750 175,300 NVIDIA Corp. (NON) 11,727,570 1,915,000 PerkinElmer, Inc. 67,063,300 1,905,000 PMC - Sierra, Inc. (NON) 40,500,300 1,600,000 RF Micro Devices, Inc. (NON) 30,768,000 5,361,900 Sanmina Corp. (NON) 106,701,810 2,633,500 Semtech Corp. (NON) 93,989,615 3,626,500 Solectron Corp. (NON) 40,906,920 86,800 Xilinx, Inc. (NON) 3,389,540 ------------- 2,381,437,860 Energy (1.5%) - ------------------------------------------------------------------------------------------------------------------- 1,735,000 BJ Services Co. (NON) 56,300,750 2,144,205 GlobalSantaFe Corp. 61,152,727 543,500 Key Energy Services, Inc. (NON) 5,000,200 1,549,100 Nabors Industries, Inc. (NON) 53,180,603 2,075,000 National-Oilwell, Inc. (NON) 42,765,750 1,575,000 Patterson-UTI Energy, Inc. (NON) 36,713,250 ------------- 255,113,280 Entertainment (2.4%) - ------------------------------------------------------------------------------------------------------------------- 8,928,900 Viacom, Inc. Class B (NON) 394,210,935 Financial (1.1%) - ------------------------------------------------------------------------------------------------------------------- 1,481,900 Citigroup, Inc. 74,806,312 1,327,300 Fannie Mae 105,520,350 99,500 USA Education, Inc. 8,359,990 ------------- 188,686,652 Food (0.2%) - ------------------------------------------------------------------------------------------------------------------- 1,112,700 Kraft Foods, Inc. Class A 37,865,181 Gaming & Lottery (0.4%) - ------------------------------------------------------------------------------------------------------------------- 277,000 Argosy Gaming Co. (NON) 9,008,040 1,485,000 Harrah's Entertainment, Inc. (NON) 54,959,850 ------------- 63,967,890 Health Care Services (4.7%) - ------------------------------------------------------------------------------------------------------------------- 1,980,000 AdvancePCS (NON) 58,113,000 1,626,690 AmerisourceBergen Corp. 103,376,150 565,000 Anthem, Inc. (NON) 27,967,500 3,740,000 Caremark Rx, Inc. (NON) 60,999,400 51,500 Cerner Corp. (NON) 2,571,395 1,870,000 Community Health Systems, Inc. (NON) 47,685,000 437,300 DaVita, Inc. (NON) 10,691,985 1,646,600 HCA, Inc. 63,459,964 930,000 Healthsouth Corp. (NON) 13,782,600 3,235,000 IMS Health, Inc. 63,114,850 1,330,000 McKesson Corp. 49,742,000 290,000 Oxford Health Plans, Inc. (NON) 8,740,600 158,200 Pharmaceutical Product Development, Inc. (NON) 5,111,442 3,658,400 UnitedHealth Group, Inc. 258,904,968 ------------- 774,260,854 Homebuilding (0.1%) - ------------------------------------------------------------------------------------------------------------------- 109,800 Lennar Corp. 5,140,836 25,400 NVR, Inc. (NON) 5,181,600 ------------- 10,322,436 Insurance (0.8%) - ------------------------------------------------------------------------------------------------------------------- 1,306,000 American International Group, Inc. 103,696,400 185,200 Brown & Brown, Inc. 5,055,960 303,700 XL Capital, Ltd. Class A (Bermuda) 27,746,032 ------------- 136,498,392 Investment Banking/Brokerage (0.9%) - ------------------------------------------------------------------------------------------------------------------- 255,900 Federated Investors, Inc. 8,158,092 253,400 Lehman Brothers Holdings, Inc. 16,927,120 2,075,600 Morgan Stanley Dean Witter & Co. 116,109,064 158,600 T Rowe Price Group, Inc. 5,508,178 ------------- 146,702,454 Leisure (1.0%) - ------------------------------------------------------------------------------------------------------------------- 3,135,000 Harley-Davidson, Inc. 170,261,850 Lodging/Tourism (0.6%) - ------------------------------------------------------------------------------------------------------------------- 3,548,800 Cendant Corp. (NON) 69,591,968 763,000 Four Seasons Hotels, Inc. (Canada) 35,677,880 ------------- 105,269,848 Manufacturing (--%) - ------------------------------------------------------------------------------------------------------------------- 108,800 Roper Industries, Inc. 5,385,600 Media (7.3%) - ------------------------------------------------------------------------------------------------------------------- 2,738,400 AOL Time Warner, Inc. (NON) 87,902,640 5,530,000 Clear Channel Communications, Inc. (NON) 281,532,300 2,135,800 Echostar Communications Corp. Class A (NON) 58,670,426 2,020,000 Entercom Communications Corp. (NON) 101,000,000 3,955,000 Hispanic Broadcasting Corp. (NON) 100,852,500 13,940,262 Liberty Media Corp. Class A (NON) 195,163,668 5,443,000 Univision Communications, Inc. (NON) 220,223,780 5,361,100 Westwood One, Inc. (NON) (AFF) 161,101,055 ------------- 1,206,446,369 Medical Technology (3.3%) - ------------------------------------------------------------------------------------------------------------------- 6,440,000 Apogent Technologies, Inc. (NON) (AFF) 166,152,000 890,000 Biomet, Inc. 27,501,000 2,290,000 Cytyc Corp. (NON) 59,769,000 91,200 DENTSPLY International, Inc. 4,578,240 248,700 Guidant Corp. (NON) 12,385,260 2,905,300 Medtronic, Inc. 148,780,413 101,600 Stryker Corp. 5,930,392 1,795,663 Sybron Dental Specialties, Inc. (NON) 38,750,408 2,770,000 Zimmer Holdings, Inc. (NON) 84,595,800 ------------- 548,442,513 Metals (0.1%) - ------------------------------------------------------------------------------------------------------------------- 687,500 Freeport-McMoRan Copper & Gold, Inc. Class A (NON) 8,868,750 Natural Gas Utilities (0.6%) - ------------------------------------------------------------------------------------------------------------------- 4,169,700 Dynegy, Inc. Class A 106,327,350 Oil & Gas (0.3%) - ------------------------------------------------------------------------------------------------------------------- 1,415,000 Noble Drilling Corp. (NON) 48,166,600 92,400 Ultramar Diamond Shamrock Corp. 4,571,952 ------------- 52,738,552 Pharmaceuticals (9.9%) - ------------------------------------------------------------------------------------------------------------------- 2,483,400 Allergan, Inc. 186,379,170 850,000 Andrx Group (NON) 59,848,500 1,006,100 Bristol-Myers Squibb Co. 51,311,100 2,075,000 Cephalon, Inc. (NON) 156,838,875 1,205,000 Enzon, Inc. (NON) 67,817,400 142,100 Forest Laboratories, Inc. (NON) 11,645,095 2,864,100 Johnson & Johnson 169,268,310 3,884,001 King Pharmaceuticals, Inc. (NON) 163,632,962 1,676,800 Eli Lilly & Co. 131,695,872 1,330,000 Medicis Pharmaceutical Corp. Class A (NON) 85,904,700 181,000 Mylan Laboratories, Inc. 6,787,500 7,962,700 Pfizer, Inc. 317,313,595 4,340,400 Schering-Plough Corp. 155,429,724 2,445,000 Shire Pharmaceuticals Group PLC ADR (United Kingdom) (NON) 89,487,000 ------------- 1,653,359,803 Power Producers (0.7%) - ------------------------------------------------------------------------------------------------------------------- 5,835,800 Mirant Corp. (NON) 93,489,516 881,700 Reliant Resources, Inc. (NON) 14,556,867 ------------- 108,046,383 Restaurants (0.8%) - ------------------------------------------------------------------------------------------------------------------- 164,300 Darden Restaurants, Inc. 5,816,220 6,888,400 Starbucks Corp. (NON) 131,224,020 ------------- 137,040,240 Retail (10.1%) - ------------------------------------------------------------------------------------------------------------------- 157,600 Abercrombie & Fitch Co. Class A (NON) 4,181,128 2,002,000 AutoZone, Inc. (NON) 143,743,600 10,815,000 Bed Bath & Beyond, Inc. (NON) 366,628,500 617,100 Best Buy Companies, Inc. (NON) 45,961,608 5,032,500 Dollar Tree Stores, Inc. (NON) 155,554,575 2,375,000 Family Dollar Stores, Inc. 71,202,500 345,800 Gap, Inc. (The) 4,820,452 4,199,650 Kohls Corp. (NON) 295,823,346 436,600 Limited, Inc. (The) 6,426,752 4,396,200 Lowe's Companies, Inc. 204,027,642 599,300 Talbots, Inc. (The) 21,724,625 2,032,100 TJX Companies, Inc. (The) 80,999,506 3,679,700 Wal-Mart Stores, Inc. 211,766,735 1,562,900 Whole Foods Market, Inc. (NON) 68,079,924 ------------- 1,680,940,893 Schools (0.7%) - ------------------------------------------------------------------------------------------------------------------- 1,139,300 Apollo Group, Inc. Class A (NON) 51,279,893 2,365,000 SmartForce PLC ADR (NON) 58,533,750 ------------- 109,813,643 Software (7.2%) - ------------------------------------------------------------------------------------------------------------------- 122,988 Activision, Inc. (NON) 3,198,918 2,825,000 Amdocs, Ltd. (Guernsey) (NON) 95,965,250 261,200 Cadence Design Systems, Inc. (NON) 5,725,504 275,800 Computer Associates International, Inc. 9,512,342 2,321,000 Electronic Arts, Inc. (NON) 139,143,950 1,467,700 Internet Security Systems, Inc. (NON) 47,054,462 106,400 Intuit, Inc. (NON) 4,551,792 170,300 Mercury Interactive Corp. (NON) 5,786,794 6,221,000 Microsoft Corp. (NON) 412,141,250 1,941,700 Network Associates, Inc. (NON) 50,192,945 1,333,200 Novell, Inc. (NON) 6,119,388 9,264,900 Parametric Technology Corp. (NON) 72,358,869 169,100 PeopleSoft, Inc. (NON) 6,797,820 2,505,000 Peregrine Systems, Inc. (NON) 37,149,150 98,200 Siebel Systems, Inc. (NON) 2,747,636 450,000 Symantec Corp. (NON) 29,848,500 5,566,600 VERITAS Software Corp. (NON) 249,550,678 1,439,000 webMethods, Inc. (NON) 24,117,640 ------------- 1,201,962,888 Telecommunications (2.0%) - ------------------------------------------------------------------------------------------------------------------- 1,665,300 CenturyTel, Inc. 54,621,904 2,045,000 Earthlink, Inc. (NON) 24,887,650 1,460,000 SBA Communications Corp. (NON) 19,009,200 2,934,000 Sprint Corp. (PCS Group) (NON) 71,618,940 3,649,200 Time Warner Telecom, Inc. Class A (NON) 64,554,348 1,535,000 Triton PCS Holdings, Inc. Class A (NON) 45,052,250 60,700 United States Cellular Corp. (NON) 2,746,675 1,965,000 Western Wireless Corp. Class A (NON) 55,511,250 ------------- 338,002,217 Tobacco (0.8%) - ------------------------------------------------------------------------------------------------------------------- 3,010,100 Philip Morris Companies, Inc. 138,013,085 Transaction Processing (--%) - ------------------------------------------------------------------------------------------------------------------- 224,153 NDCHealth Corp. $ 7,744,486 --------------- Total Common Stocks (cost $13,997,476,603) $16,383,036,823 UNITS (0.5%) (a) (NON) NUMBER OF UNITS VALUE - ------------------------------------------------------------------------------------------------------------------- 1,203,300 Lehman Brothers Holdings, Inc. 144A Structured Warrants expiration 9/3/02 (Issued by Lehman Brothers Holdings, Inc.) $ 80,464,671 150,500 VeriSign, Inc. 144A Capped Warrants expiration 4/8/02 (Issued by Salomon Smith Barney Holdings, Inc.) 5,426,353 --------------- Total Units (cost $85,396,588) $ 85,891,024 SHORT-TERM INVESTMENTS (1.6%) (a) PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------------------------- $ 23,500,000 Corporate Asset Funding effective yield of 1.93%, January 22, 2002 $ 23,473,543 45,676,000 Delaware Funding Corp. effective yield of 1.83%, January 17, 2002 45,638,850 50,000,000 General Electric Capital Corp. effective yield of 1.80%, March 25, 2002 49,792,900 81,000,000 Old Line Funding Corp. effective yield of 1.85%, February 6, 2002 80,850,150 50,000,000 Morgan Stanley, Dean Witter & Co. effective yield of 1.83%, February 15, 2002 49,885,625 17,252,000 Interest in $600,000,000 joint tri-party repurchase agreement dated December 31, 2001 with Goldman Sachs & Co. due January 2, 2002 with respect to various U.S. Government obligations--maturity value of $17,253,716 for an effective yield of 1.79% 17,252,000 --------------- Total Short-Term Investments (cost $266,893,068) $ 266,893,068 - ------------------------------------------------------------------------------------------------------------------- Total Investments (cost $14,349,766,259) (b) $16,735,820,915 - ------------------------------------------------------------------------------------------------------------------- (a) Percentages indicated are based on net assets of $16,660,399,049. (b) The aggregate identified cost on a tax basis is $14,577,160,396, resulting in gross unrealized appreciation and depreciation of $4,019,019,712 and $1,860,359,193, respectively, or net unrealized appreciation of $2,158,660,519. (NON) Non-income-producing security. (AFF) Affiliated Companies (Note 5). 144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities on deposit with a custodian bank. The accompanying notes are an integral part of these financial statements.
STATEMENT OF ASSETS AND LIABILITIES December 31, 2001 (Unaudited) Assets - ------------------------------------------------------------------------------------------- Investments in securities, at value (identified cost $14,349,766,259) (Note 1) $16,735,820,915 - ------------------------------------------------------------------------------------------- Cash 1,918,212 - ------------------------------------------------------------------------------------------- Dividends, interest and other receivables 5,139,765 - ------------------------------------------------------------------------------------------- Receivable for shares of the fund sold 21,690,120 - ------------------------------------------------------------------------------------------- Receivable for securities sold 31,424,958 - ------------------------------------------------------------------------------------------- Total assets 16,795,993,970 Liabilities - ------------------------------------------------------------------------------------------- Payable for securities purchased 32,749,302 - ------------------------------------------------------------------------------------------- Payable for shares of the fund repurchased 63,202,688 - ------------------------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 19,904,401 - ------------------------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 8,316,225 - ------------------------------------------------------------------------------------------- Payable for compensation of Trustees (Note 2) 619,915 - ------------------------------------------------------------------------------------------- Payable for administrative services (Note 2) 17,850 - ------------------------------------------------------------------------------------------- Payable for distribution fees (Note 2) 10,310,819 - ------------------------------------------------------------------------------------------- Other accrued expenses 473,721 - ------------------------------------------------------------------------------------------- Total liabilities 135,594,921 - ------------------------------------------------------------------------------------------- Net assets $16,660,399,049 Represented by - ------------------------------------------------------------------------------------------- Paid-in capital (Notes 1 and 4) $19,327,644,155 - ------------------------------------------------------------------------------------------- Accumulated net investment loss (Note 1) (62,145,422) - ------------------------------------------------------------------------------------------- Accumulated net realized loss on investments (Note 1) (4,991,154,340) - ------------------------------------------------------------------------------------------- Net unrealized appreciation of investments 2,386,054,656 - ------------------------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $16,660,399,049 Computation of net asset value and offering price - ------------------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($10,545,041,432 divided by 257,310,114 shares) $40.98 - ------------------------------------------------------------------------------------------- Offering price per class A share (100/94.25 of $40.98)* $43.48 - ------------------------------------------------------------------------------------------- Net asset value and offering price per class B share ($4,203,118,991 divided by 110,974,732 shares)** $37.87 - ------------------------------------------------------------------------------------------- Net asset value and offering price per class C share ($112,467,200 divided by 2,799,128 shares)** $40.18 - ------------------------------------------------------------------------------------------- Net asset value and redemption price per class M share ($323,489,750 divided by 8,246,166 shares) $39.23 - ------------------------------------------------------------------------------------------- Offering price per class M share (100/96.50 of $39.23)* $40.65 - ------------------------------------------------------------------------------------------- Net asset value, offering price and redemption price per class Y share ($1,476,281,676 divided by 35,185,961 shares) $41.96 - ------------------------------------------------------------------------------------------- * 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, 2001 (Unaudited) Investment income: - ------------------------------------------------------------------------------------------- Dividends (net of foreign tax of $3,937) $ 28,931,817 - ------------------------------------------------------------------------------------------- Interest 6,535,678 - ------------------------------------------------------------------------------------------- Total investment income 35,467,495 Expenses: - ------------------------------------------------------------------------------------------- Compensation of Manager (Note 2) 41,688,536 - ------------------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 12,777,033 - ------------------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 65,511 - ------------------------------------------------------------------------------------------- Administrative services (Note 2) 35,451 - ------------------------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 13,086,196 - ------------------------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 23,456,032 - ------------------------------------------------------------------------------------------- Distribution fees -- Class C (Note 2) 561,369 - ------------------------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 1,244,463 - ------------------------------------------------------------------------------------------- Other 5,234,595 - ------------------------------------------------------------------------------------------- Total expenses 98,149,186 - ------------------------------------------------------------------------------------------- Expense reduction (Note 2) (536,269) - ------------------------------------------------------------------------------------------- Net expenses 97,612,917 - ------------------------------------------------------------------------------------------- Net investment loss (62,145,422) - ------------------------------------------------------------------------------------------- Net realized loss on investments (Notes 1 and 3) (2,625,110,608) - ------------------------------------------------------------------------------------------- Net realized loss on futures contracts (Note 1) (17,946,881) - ------------------------------------------------------------------------------------------- Net unrealized depreciation of investments and futures contracts during the period (414,181,841) - ------------------------------------------------------------------------------------------- Net loss on investments (3,057,239,330) - ------------------------------------------------------------------------------------------- Net decrease in net assets resulting from operations $(3,119,384,752) - ------------------------------------------------------------------------------------------- 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 2001* 2001 - -------------------------------------------------------------------------------------------------- Decrease in net assets - -------------------------------------------------------------------------------------------------- Operations: - -------------------------------------------------------------------------------------------------- Net investment loss $ (62,145,422) $ (213,822,939) - -------------------------------------------------------------------------------------------------- Net realized loss on investments and foreign currency transactions (2,643,057,489) (1,364,056,092) - -------------------------------------------------------------------------------------------------- Net unrealized depreciation of investments and futures contracts (414,181,841) (14,856,338,666) - -------------------------------------------------------------------------------------------------- Net decrease in net assets resulting from operations (3,119,384,752) (16,434,217,697) - -------------------------------------------------------------------------------------------------- Distributions to shareholders: (Note 1) - -------------------------------------------------------------------------------------------------- From net realized gain on investments Class A -- (1,607,781,600) - -------------------------------------------------------------------------------------------------- Class B -- (966,627,892) - -------------------------------------------------------------------------------------------------- Class C -- (14,399,015) - -------------------------------------------------------------------------------------------------- Class M -- (57,792,875) - -------------------------------------------------------------------------------------------------- Class Y -- (211,928,459) - -------------------------------------------------------------------------------------------------- In excess of net realized gain on investments Class A -- (530,137,456) - -------------------------------------------------------------------------------------------------- Class B -- (318,728,397) - -------------------------------------------------------------------------------------------------- Class C -- (4,747,820) - -------------------------------------------------------------------------------------------------- Class M -- (19,056,175) - -------------------------------------------------------------------------------------------------- Class Y -- (69,879,649) - -------------------------------------------------------------------------------------------------- Increase (decrease) from capital share transactions (Note 4) (1,204,254,885) 4,162,801,381 - -------------------------------------------------------------------------------------------------- Total decrease in net assets (4,323,639,637) (16,072,495,654) Net assets - -------------------------------------------------------------------------------------------------- Beginning of period 20,984,038,686 37,056,534,340 - -------------------------------------------------------------------------------------------------- End of the period (including accumulated net investment loss and undistributed net investment income of $62,145,422 and $--, respectively) $16,660,399,049 $20,984,038,686 - -------------------------------------------------------------------------------------------------- * Unaudited The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS (For a common share outstanding throughout the period) CLASS A - ------------------------------------------------------------------------------------------------------------------ Six months ended Per-share December 31 operating performance (Unaudited) Year ended June 30 - ------------------------------------------------------------------------------------------------------------------ 2001 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $47.97 $96.61 $65.61 $57.68 $44.47 $42.99 - ------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------ Net investment loss (.11)(c) (.37)(c) (.54)(c) (.32)(c) (.25) (.20)(c) - ------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (6.88) (38.81) 38.84 10.13 14.55 2.00 - ------------------------------------------------------------------------------------------------------------------ Total from investment operations (6.99) (39.18) 38.30 9.81 14.30 1.80 - ------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------ From net realized gain on investments -- (7.11) (7.30) (1.88) (1.09) (.26) - ------------------------------------------------------------------------------------------------------------------ In excess of net realized gains -- (2.35) -- -- -- (.06) - ------------------------------------------------------------------------------------------------------------------ Total distributions -- (9.46) (7.30) (1.88) (1.09) (.32) - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $40.98 $47.97 $96.61 $65.61 $57.68 $44.47 - ------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) (14.57)* (43.10) 60.49 17.81 32.75 4.26 - ------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $10,545,041 $12,595,034 $21,138,863 $11,817,798 $10,163,386 $7,381,624 - ------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .48* .89 .86 .93 .98 1.06 - ------------------------------------------------------------------------------------------------------------------ Ratio of net investment loss to average net assets (%) (.27)* (.55) (.64) (.56) (.49) (.48) - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 32.95* 67.74 53.13 76.54 65.21 66.74 - ------------------------------------------------------------------------------------------------------------------ * Not annualized. (a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Includes amounts paid through expense offset and brokerage service arrangements (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 common share outstanding throughout the period) CLASS B - ------------------------------------------------------------------------------------------------------------------ Six months ended Per-share December 31 operating performance (Unaudited) Year ended June 30 - ------------------------------------------------------------------------------------------------------------------ 2001 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $44.50 $91.07 $62.51 $55.42 $43.08 $41.96 - ------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------ Net investment loss (.24)(c) (.77)(c) (.98)(c) (.66)(c) (.62) (.49)(c) - ------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (6.39) (36.34) 36.84 9.63 14.05 1.93 - ------------------------------------------------------------------------------------------------------------------ Total from investment operations (6.63) (37.11) 35.86 8.97 13.43 1.44 - ------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------ From net realized gain on investments -- (7.11) (7.30) (1.88) (1.09) (.26) - ------------------------------------------------------------------------------------------------------------------ In excess of net realized gains -- (2.35) -- -- -- (.06) - ------------------------------------------------------------------------------------------------------------------ Total distributions -- (9.46) (7.30) (1.88) (1.09) (.32) - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $37.87 $44.50 $91.07 $62.51 $55.42 $43.08 - ------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) (14.90)* (43.48) 59.53 17.01 31.78 3.50 - ------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $4,203,119 $6,137,938 $12,343,996 $8,382,292 $7,950,848 $6,359,447 - ------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .85* 1.53 1.46 1.60 1.73 1.81 - ------------------------------------------------------------------------------------------------------------------ Ratio of net investment loss to average net assets (%) (.64)* (1.19) (1.24) (1.23) (1.24) (1.23) - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 32.95* 67.74 53.13 76.54 65.21 66.74 - ------------------------------------------------------------------------------------------------------------------ * Not annualized. (a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Includes amounts paid through expense offset and brokerage service arrangements (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 common share outstanding throughout the period) CLASS C - --------------------------------------------------------------------------- Six months ended For the period Per-share December 31 Year ended July 26, 1999+ operating performance (Unaudited) June 30 to June 30 - --------------------------------------------------------------------------- 2001 2001 2000 - --------------------------------------------------------------------------- Net asset value, beginning of period $47.21 $95.94 $65.31 - --------------------------------------------------------------------------- Investment operations - --------------------------------------------------------------------------- Net investment loss (c) (.25) (.82) (1.13) - --------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments (6.78) (38.45) 39.06 - --------------------------------------------------------------------------- Total from investment operations (7.03) (39.27) 37.93 - --------------------------------------------------------------------------- Less distributions: - --------------------------------------------------------------------------- From net realized gain on investments -- (7.11) (7.30) - --------------------------------------------------------------------------- In excess of net realized gains -- (2.35) -- - --------------------------------------------------------------------------- Total distributions -- (9.46) (7.30) - --------------------------------------------------------------------------- Net asset value, end of period $40.18 $47.21 $95.94 - --------------------------------------------------------------------------- Total return at net asset value (%)(a) (14.89)* (43.53) 60.14* - --------------------------------------------------------------------------- Ratios and supplemental data - --------------------------------------------------------------------------- Net assets, end of period (in thousands) $112,467 $136,417 $118,720 - --------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b) .85* 1.64 1.50* - --------------------------------------------------------------------------- Ratio of net investment loss to average net assets (%) (.64)* (1.29) (1.30)* - --------------------------------------------------------------------------- Portfolio turnover (%) 32.95* 67.74 53.13 - --------------------------------------------------------------------------- + Commencement of operations. * Not annualized. (a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Includes amounts paid through expense offset and brokerage service arrangements (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 common share outstanding throughout the period) CLASS M - ------------------------------------------------------------------------------------------------------------------ Six months ended Per-share December 31 operating performance (Unaudited) Year ended June 30 - ------------------------------------------------------------------------------------------------------------------ 2001 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $46.03 $93.63 $64.05 $56.65 $43.91 $42.66 - ------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------ Net investment loss (.20)(c) (.69)(c) (.93)(c) (.58)(c) (.49) (.40)(c) - ------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (6.60) (37.45) 37.81 9.86 14.32 1.97 - ------------------------------------------------------------------------------------------------------------------ Total from investment operations (6.80) (38.14) 36.88 9.28 13.83 1.57 - ------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------ From net realized gain on investments -- (7.11) (7.30) (1.88) (1.09) (.26) - ------------------------------------------------------------------------------------------------------------------ In excess of net realized gains -- (2.35) -- -- -- (.06) - ------------------------------------------------------------------------------------------------------------------ Total distributions -- (9.46) (7.30) (1.88) (1.09) (.32) - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $39.23 $46.03 $93.63 $64.05 $56.65 $43.91 - ------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) (14.77)* (43.38) 59.71 17.19 32.09 3.75 - ------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $323,490 $411,251 $770,194 $491,209 $444,325 $337,535 - ------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .73* 1.39 1.36 1.43 1.48 1.56 - ------------------------------------------------------------------------------------------------------------------ Ratio of net investment loss to average net assets (%) (.52)* (1.05) (1.14) (1.06) (.99) (.98) - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 32.95* 67.74 53.13 76.54 65.21 66.74 - ------------------------------------------------------------------------------------------------------------------ * Not annualized. (a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Includes amounts paid through expense offset and brokerage service arrangements (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 common share outstanding throughout the period) CLASS Y - ------------------------------------------------------------------------------------------------------------------ Six months ended Per-share December 31 operating performance (Unaudited) Year ended June 30 - ------------------------------------------------------------------------------------------------------------------ 2001 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $49.05 $98.28 $66.49 $58.28 $44.82 $43.21 - ------------------------------------------------------------------------------------------------------------------ Investment operations - ------------------------------------------------------------------------------------------------------------------ Net investment loss (c) (.06) (.21) (.34) (.19) (.13) (.09) - ------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (7.03) (39.56) 39.43 10.28 14.68 2.02 - ------------------------------------------------------------------------------------------------------------------ Total from investment operations (7.09) (39.77) 39.09 10.09 14.55 1.93 - ------------------------------------------------------------------------------------------------------------------ Less distributions: - ------------------------------------------------------------------------------------------------------------------ From net realized gain on investments -- (7.11) (7.30) (1.88) (1.09) (.26) - ------------------------------------------------------------------------------------------------------------------ In excess of net realized gains -- (2.35) -- -- -- (.06) - ------------------------------------------------------------------------------------------------------------------ Total distributions -- (9.46) (7.30) (1.88) (1.09) (.32) - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $41.96 $49.05 $98.28 $66.49 $58.28 $44.82 - ------------------------------------------------------------------------------------------------------------------ Total return at net asset value (%)(a) (14.45)* (42.96) 60.88 18.11 33.05 4.54 - ------------------------------------------------------------------------------------------------------------------ Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $1,476,282 $1,703,399 $2,684,761 $1,032,022 $476,037 $254,126 - ------------------------------------------------------------------------------------------------------------------ Ratio of expenses to average net assets (%)(b) .35* .64 .61 .68 .73 .81 - ------------------------------------------------------------------------------------------------------------------ Ratio of net investment loss to average net assets (%) (.14)* (.30) (.39) (.32) (.24) (.23) - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover (%) 32.95* 67.74 53.13 76.54 65.21 66.74 - ------------------------------------------------------------------------------------------------------------------ * Not annualized. (a) Total return assumes dividend reinvestment and does not reflect the effect of sales charges. (b) Includes amounts paid through expense offset and brokerage service arrangements (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, 2001 (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, LLC ("Putnam Management"), the fund's manager, a wholly-owned subsidiary of Putnam Investments, LLC possess above-average, long-term growth potential. The fund offers class A, class B, class C, class M and class Y shares. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class B shares, which convert to class A shares after 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 accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in 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. Securities quoted in foreign currencies are translated into U.S. dollars at the current exchange rate. 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 The fund may transfer uninvested cash balances, including cash collateral received under security lending arrangements, 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. Non-cash dividends, if any, are recorded at the fair market value of the securities received. E) Futures and options contracts The fund may use futures and options contracts to hedge against changes in the values of securities the fund owns or expects to purchase. The fund may also write options on securities it owns or in which it may invest to increase its current returns. The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, or if the counterparty to the contract is unable to perform. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as "variation margin". Exchange traded options are valued at the last sale price, or if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. 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 maintains an asset coverage ratio of at least 300% and borrowings must not exceed prospectus limitations. For the six months ended December 31, 2001, 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. Distributions from capital gains, 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, 0.39% of the next $5 billion, 0.38% of the next $8.5 billion and 0.37% 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, LLC. Investor servicing agent functions are provided by Putnam Investor Services, a division of PFTC. The fund has entered into an arrangement with PFTC whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the fund's expenses. The fund also reduced expenses through brokerage service arrangements. For the six months ended December 31, 2001, the fund's expenses were reduced by $536,269 under these arrangements. Each independent Trustee of the fund receives an annual Trustee fee, of which $7,664 has been allocated to the fund, and an additional fee for each Trustees 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 Retail Management, a wholly-owned subsidiary of Putnam Investments, LLC and Putnam Retail Management GP, 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 Retail Management 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%, 1.00%, 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, 2001, Putnam Retail Management, acting as underwriter received net commissions of $677,385 and $18,437 from the sale of class A and class M shares, respectively, and received $3,830,291 and $15,141 in contingent deferred sales charges from redemptions of class B and class C shares, respectively. A deferred sales charge of up to 1.00% and 0.65% is assessed on certain redemptions of class A and class M shares, respectively. For the six months ended December 31, 2001, Putnam Retail Management, acting as underwriter received $39,992 and no monies on class A and class M redemptions, respectively. Note 3 Purchases and sales of securities During the six months ended December 31, 2001, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $5,510,012,206 and $6,077,779,571, respectively. There were no purchases and sales of U.S. government obligations. Note 4 Capital shares At December 31, 2001, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Six months ended December 31, 2001 - --------------------------------------------------------------------------- Class A Shares Amount - --------------------------------------------------------------------------- Shares sold 35,685,682 $ 1,410,557,240 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - --------------------------------------------------------------------------- 35,685,682 1,410,557,240 Shares repurchased (40,946,298) (1,627,236,536) - --------------------------------------------------------------------------- Net decrease (5,260,616) $ (216,679,296) - --------------------------------------------------------------------------- Year ended June 30, 2001 - --------------------------------------------------------------------------- Class A Shares Amount - --------------------------------------------------------------------------- Shares sold 71,424,787 $ 4,754,944,031 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 31,455,012 2,037,972,351 - --------------------------------------------------------------------------- 102,879,799 6,792,916,382 Shares repurchased (59,118,869) (3,782,498,906) - --------------------------------------------------------------------------- Net increase 43,760,930 $ 3,010,417,476 - --------------------------------------------------------------------------- Six months ended December 31, 2001 - --------------------------------------------------------------------------- Class B Shares Amount - --------------------------------------------------------------------------- Shares sold 4,577,652 $ 168,980,424 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - --------------------------------------------------------------------------- 4,577,652 168,980,424 Shares repurchased (31,535,433) (1,148,253,930) - --------------------------------------------------------------------------- Net decrease (26,957,781) $ (979,273,506) - --------------------------------------------------------------------------- Year ended June 30, 2001 - --------------------------------------------------------------------------- Class B Shares Amount - --------------------------------------------------------------------------- Shares sold 19,806,817 $ 1,320,844,738 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 18,727,107 1,130,180,290 - --------------------------------------------------------------------------- 38,533,924 2,451,025,028 Shares repurchased (36,143,656) (2,022,879,830) - --------------------------------------------------------------------------- Net increase 2,390,268 $ 428,145,198 - --------------------------------------------------------------------------- Six months ended December 31, 2001 - --------------------------------------------------------------------------- Class C Shares Amount - --------------------------------------------------------------------------- Shares sold 435,780 $ 17,089,303 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - --------------------------------------------------------------------------- 435,780 17,089,303 Shares repurchased (526,256) (20,480,725) - --------------------------------------------------------------------------- Net decrease (90,476) $ (3,391,422) - --------------------------------------------------------------------------- Year ended June 30, 2001 - --------------------------------------------------------------------------- Class C Shares Amount - --------------------------------------------------------------------------- Shares sold 1,958,755 $139,593,279 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 259,704 16,631,460 - --------------------------------------------------------------------------- 2,218,459 156,224,739 Shares repurchased (566,282) (32,394,437) - --------------------------------------------------------------------------- Net increase 1,652,177 $123,830,302 - --------------------------------------------------------------------------- Six months ended December 31, 2001 - --------------------------------------------------------------------------- Class M Shares Amount - --------------------------------------------------------------------------- Shares sold 645,678 $ 24,673,916 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - --------------------------------------------------------------------------- 645,678 24,673,916 Shares repurchased (1,333,810) (50,370,844) - --------------------------------------------------------------------------- Net decrease (688,132) $(25,696,928) - --------------------------------------------------------------------------- Year ended June 30, 2001 - --------------------------------------------------------------------------- Class M Shares Amount - --------------------------------------------------------------------------- Shares sold 1,670,208 $ 109,688,940 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,169,186 72,887,065 - --------------------------------------------------------------------------- 2,839,394 182,576,005 Shares repurchased (2,130,833) (132,029,125) - --------------------------------------------------------------------------- Net increase 708,561 $ 50,546,880 - --------------------------------------------------------------------------- Six months ended December 31, 2001 - --------------------------------------------------------------------------- Class Y Shares Amount - --------------------------------------------------------------------------- Shares sold 6,190,601 $ 250,648,684 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - --------------------------------------------------------------------------- 6,190,601 250,648,684 Shares repurchased (5,735,173) (229,862,417) - --------------------------------------------------------------------------- Net increase 455,428 $ 20,786,267 - --------------------------------------------------------------------------- Year ended June 30, 2001 - --------------------------------------------------------------------------- Class Y Shares Amount - --------------------------------------------------------------------------- Shares sold 14,752,097 $1,045,688,688 - --------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 4,261,409 281,808,108 - --------------------------------------------------------------------------- 19,013,506 1,327,496,796 Shares repurchased (11,601,175) (777,635,271) - --------------------------------------------------------------------------- Net increase 7,412,331 $ 549,861,525 - --------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------------------------------------------ Name of affiliate - ------------------------------------------------------------------------------------------------------------------ Apogent Technologies, Inc. $5,128,405 $-- $-- $166,152,000 Westwood One, Inc. 1,358,005 -- -- 161,101,055 - ------------------------------------------------------------------------------------------------------------------ Totals $6,486,410 $-- $-- $327,253,055 Market value amounts are shown for issues that are affiliated at period end.
SERVICES FOR SHAREHOLDERS HELP YOUR INVESTMENT GROW Set up a program for systematic investing with as little as $25 a month from a Putnam fund or from your own savings or checking account. (Regular investing does not guarantee a profit or protect against loss in a declining market.) SWITCH FUNDS EASILY You can move money from one Putnam fund to another within the same class of shares without a service charge. (This privilege is subject to change or termination.) ACCESS YOUR MONEY EASILY You can have checks sent regularly or redeem shares any business day at the then-current net asset value, which may be more or less than the original cost of the shares. Class B and class C shares carry a sales charge that is applied to certain withdrawals. HOW TO BUY ADDITIONAL SHARES You may buy shares through your financial advisor or directly from Putnam. To open an account by mail, send a check made payable to the name of the fund along with a completed fund application. To add to an existing account, complete the investment slip found at the top of your Confirmation of Activity statement and return it with a check payable to your fund. VISIT US AT WWW.PUTNAMINVESTMENTS.COM A secure section of our Web site contains complete information on your account, including balances and transactions, updated daily. You may also conduct transactions, such as exchanges, additional investments, and address changes. Log on today to get your password. USE OUR TOLL-FREE NUMBER 1-800-225-1581 Ask a helpful Putnam representative or your financial advisor for details about any of these or other services, or see your prospectus. FUND INFORMATION WEB SITE www.putnaminvestments.com INVESTMENT MANAGER Putnam Investment Management, LLC One Post Office Square Boston, MA 02109 MARKETING SERVICES Putnam Retail Management One Post Office Square Boston, MA 02109 CUSTODIAN Putnam Fiduciary Trust Company LEGAL COUNSEL Ropes & Gray TRUSTEES John A. Hill, Chairman Jameson Adkins Baxter Charles B. Curtis 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, III President Charles E. Porter Executive Vice President and Treasurer Patricia C. Flaherty Senior Vice President Lawrence J. Lasser Vice President Gordon H. Silver Vice President Ian C. Ferguson Vice President Brett C. Browchuk Vice President Stephen Oristaglio Vice President Daniel Miller Vice President Eric Wetlaufer Vice President Richard G. Leibovitch 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 and Putnam's Quarterly Ranking Summary. For more information or to request a prospectus, call toll free: 1-800-225-1581. The fund's Statement of Additional Information contains additional information about the fund's Trustees and is available without charge upon request by calling 1-800-225-1581. You can also learn more at Putnam Investments' Web site: www.putnaminvestments.com. NOT FDIC INSURED, MAY LOSE VALUE, NO BANK GUARANTEE [LOGO OMITTED] PUTNAM INVESTMENTS The Putnam Funds One Post Office Square Boston, Massachusetts 02109 - --------------------- PRSRT STD U.S. POSTAGE PAID PUTNAM INVESTMENTS - --------------------- For account balances, economic forecasts, and the latest on Putnam funds, visit www.putnaminvestments.com SA013-79227 852/358/983/526 2/02 PUTNAM INVESTMENTS [SCALE LOGO OMITTED] - ---------------------------------------------------------------------------- Putnam New Opportunities Fund Supplement to semiannual Report dated 12/31/01 The following information has been prepared to provide class Y shareholders with a performance overview specific to their holdings. Class Y shares are offered exclusively to defined contribution plans investing $150 million or more in one or more of Putnam's funds or private accounts. Performance of class Y shares, which incur neither a front-end load, distribution fee, nor contingent deferred sales charge, will differ from performance of class A, B, C, and M shares, which are discussed more extensively in the annual report. SEMIANNUAL RESULTS AT A GLANCE - ---------------------------------------------------------------------------- Total return for periods ended 12/31/01 NAV 6 months -14.46% 1 year -29.90 5 years 35.21 Annual average 6.22 10 years 279.93 Annual average 14.28 Life of fund (since class A inception, 8/31/90) Annual average 18.81 Share value: NAV 6/30/01 $49.05 12/31/01 $41.96 - ---------------------------------------------------------------------------- Distributions: No. Income Capital gains Total -- -- -- -- - ---------------------------------------------------------------------------- Please note that past performance is not indicative of future results. More recent returns may be more or less than those shown. Returns shown for class Y shares for periods prior to their inception are derived from the historical performance of class A shares, and are not 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. 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-----