A454_497span_11805.htm

497 1 affns1.htm PUTNAM NEW OPPORTUNITIES FUND A454_497span_11805.htm

Prospectus

10/30/05

Putnam New

Opportunities Fund

Class A shares -- for eligible retirement plans

Investment Category: Growth

This prospectus explains what you should know about this mutual fund

before you invest. Please read it carefully. This prospectus only offers

class A shares of the fund without a sales charge to eligible retirement

plans.

Putnam Investment Management, LLC (Putnam Management), which has managed

mutual funds since 1937, manages the fund.

These securities have not been approved or disapproved by the Securities

and Exchange Commission nor has the Commission passed upon the accuracy or

adequacy of this prospectus. Any statement to the contrary is a crime.

CONTENTS

2 Fund summary

2 Goal

2 Main investment strategies

2 Main risks

2 Performance information

3 Fees and expenses

4 What are the fund's main investment strategies and related risks?

8 Who manages the fund?

13 How does the fund price its shares?

14 How do I buy fund shares?

16 How do I sell fund shares?

17 How do I exchange fund shares?

17 Policy on excessive short-term trading

20 Fund distributions and taxes

20 Financial highlights

[SCALE LOGO OMITTED]

Fund summary

GOAL

The fund seeks long-term capital appreciation.

MAIN INVESTMENT STRATEGIES -- GROWTH STOCKS

We invest mainly in common stocks of U.S. companies, with a focus on growth

stocks. Growth stocks are issued by companies that we believe are

fast-growing and whose earnings we believe are likely to increase over

time. Growth in earnings may lead to an increase in the price of the stock.

We may invest in companies of any size.

MAIN RISKS

The main risks that could adversely affect the value of the fund's shares

and the total return on your investment include:

* The risk that the stock price of one or more of the companies in the

fund's portfolio will fall, or will fail to rise. Many factors can adversely

affect a stock's performance, including both general financial market

conditions and factors related to a specific company or industry. This risk

is generally greater for small and midsized companies, which tend to be more

vulnerable to adverse developments.

* The risk that movements in financial markets will adversely affect the

price of the fund's investments, regardless of how well the companies in

which we invest perform. The market as a whole may not favor the types of

investments we make.

You can lose money by investing in the fund. The fund may not achieve its

goal, and is not intended as a complete investment program. An investment

in the fund is not a deposit in a bank and is not insured or guaranteed by

the Federal Deposit Insurance Corporation or any other government agency.

PERFORMANCE INFORMATION

The following information provides some indication of the fund's risks. The

chart shows year-to-year changes in the performance of the fund's class A

shares. The table following the chart compares the fund's performance to

that of a broad measure of market performance. Of course, a fund's past

performance is not an indication of future performance.

[GRAPHIC OMITTED: vertical bar chart CALENDAR YEAR TOTAL RETURNS]

CALENDAR YEAR TOTAL RETURNS

1995 46.28%

1996 10.86%

1997 22.52%

1998 24.39%

1999 69.64%

2000 -26.14%

2001 -30.09%

2002 -30.63%

2003 32.64%

2004 10.13%

Year-to-date performance through 9/30/05 was 5.83%. During the periods

shown in the bar chart, the highest return for a quarter was 50.00%

(quarter ending 12/31/99) and the lowest return for a quarter was -29.29%

(quarter ending 9/30/01).

Average Annual Total Returns (for periods ending 12/31/04)

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Past Past Past

1 year 5 years 10 years

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Class A 10.13% -12.15% 8.17%

Russell 3000 Growth Index 6.93% -8.87% 9.30%

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Class A share performance reflects the waiver of sales charges for

purchases through eligible retirement plans.

The fund's performance is compared to the Russell 3000 Growth Index, an

unmanaged index of those companies in the Russell 3000 Index chosen for

their growth orientation.

FEES AND EXPENSES

This table summarizes the fees and expenses you may pay if you invest in

class A shares of the fund. Expenses are based on the fund's last fiscal

year.

Shareholder Fees (fees paid directly from your investment)

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Maximum Sales Charge (Load) NONE

Maximum Deferred Sales Charge (Load) NONE

Maximum Redemption Fee*

(as a percentage of total redemption proceeds) 2.00%

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Annual Fund Operating Expenses +

(expenses that are deducted from fund assets)

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Distribution Total Annual

Management (12b-1) Other Fund Operating

Fees Fees Expenses Expenses

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Class A 0.52% 0.25% 0.35% 1.12%

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* A 2.00% redemption fee (also referred to as a "short-term trading fee")

may apply to any shares that are redeemed (either by selling or exchanging

into another fund) within 5 days of purchase.

+ See the section "Who manages the fund?" for a discussion of regulatory

matters and litigation.

EXAMPLE

The example translates the expenses shown in the preceding table into

dollar amounts. By doing this, you can more easily compare the cost of

investing in the fund to the cost of investing in other mutual funds. The

example makes certain assumptions. It assumes that you invest $10,000 in

the fund for the time periods shown and then redeem all your shares at the

end of those periods. It also assumes a 5.00% return on your investment

each year and that the fund's operating expenses remain the same. The

example is hypothetical; your actual costs and returns may be higher or

lower.

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1 year 3 years 5 years 10 years

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Class A $114 $356 $617 $1,363

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What are the fund's main investment strategies and related risks?

Any investment carries with it some level of risk that generally reflects

its potential for reward. We pursue the fund's goal by investing mainly in

growth stocks. We will consider, among other factors, a company's financial

strength, competitive position in its industry, projected future earnings,

cash flows and dividends when deciding whether to buy or sell investments.

A description of the risks associated with the fund's main investment

strategies follows.

* Common stocks. Common stock represents an ownership interest in a company.

The value of a company's stock may fall as a result of factors directly

relating to that company, such as decisions made by its management or lower

demand for the company's products or services. A stock's value may also fall

because of factors affecting not just the company, but also companies in the

same industry or in a number of different industries, such as increases in

production costs. The value of a company's stock may also be affected by

changes in financial markets that are relatively unrelated to the company or

its industry, such as changes in interest rates or currency exchange rates.

In addition, a company's stock generally pays dividends only after the

company invests in its own business and makes required payments to holders

of its bonds and other debt. For this reason, the value of a company's stock

will usually react more strongly than its bonds and other debt to actual or

perceived changes in the company's financial condition or prospects. Stocks

of smaller companies may be more vulnerable to adverse developments than

those of larger companies.

Stocks of companies we believe are fast-growing may trade at a higher

multiple of current earnings than other stocks. The value of such stocks

may be more sensitive to changes in current or expected earnings than the

values of other stocks. If our assessment of the prospects for a company's

earnings growth is wrong, or if our judgment of how other investors will

value the company's earnings growth is wrong, then the price of the

company's stock may fall or not approach the value that we have placed on

it. Seeking earnings growth may result in significant investments in the

technology sector, which may be subject to greater volatility than other

sectors of the economy.

* Small and midsized companies. These companies, some of which may have a

market capitalization of less than $1 billion, are more likely than larger

companies to have limited product lines, markets or financial resources, or

to depend on a small, inexperienced management group. Stocks of these

companies often trade less frequently and in limited volume, and their

prices may fluctuate more than stocks of larger companies. Stocks of small

and midsized companies may therefore be more vulnerable to adverse

developments than those of larger companies.

* Foreign investments. We may invest in foreign investments. Foreign

investments involve certain special risks. For example, their values may

decline in response to changes in currency exchange rates, unfavorable

political and legal developments, unreliable or untimely information, and

economic and financial instability. In addition, the liquidity of these

investments may be more limited than for most U.S. investments, which means

we may at times be unable to sell them at desirable prices. Foreign

settlement procedures may also involve additional risks. These risks are

generally greater in the case of developing (also known as emerging) markets

with less developed legal and financial systems.

Certain of these risks may also apply to some extent to U.S.-traded

investments that are denominated in foreign currencies, investments in U.S.

companies that are traded in foreign markets or investments in U.S.

companies that have significant foreign operations.

* Derivatives. We may engage in a variety of transactions involving

derivatives, such as futures, options, warrants and swap contracts.

Derivatives are financial instruments whose value depends upon, or is

derived from, the value of something else, such as one or more underlying

investments, pools of investments, indexes or currencies. We may use

derivatives both for hedging and non-hedging purposes. However, we may also

choose not to use derivatives, based on our evaluation of market conditions

or the availability of suitable derivatives. Investments in derivatives may

be applied toward meeting a requirement to invest in a particular kind of

investment if the derivatives have economic characteristics similar to that

investment.

Derivatives involve special risks and may result in losses. The successful

use of derivatives depends on our ability to manage these sophisticated

instruments. The prices of derivatives may move in unexpected ways due to

the use of leverage or other factors, especially in unusual market

conditions, and may result in increased volatility.

Other risks arise from our potential inability to terminate or sell

derivatives positions. A liquid secondary market may not always exist for

the fund's derivatives positions at any time. In fact, many over-the-counter

instruments (investments not traded on an exchange) will not be liquid.

Over-the-counter instruments also involve the risk that the other party to

the derivative transaction will not meet its obligations. For further

information about the risks of derivatives, see the statement of additional

information (SAI).

* Other investments. In addition to the main investment strategies described

above, we may make other types of investments, such as investments in

preferred stocks, convertible securities, and debt instruments, which may be

subject to other risks, as described in the SAI.

* Alternative strategies. Under normal market conditions, we keep the fund's

portfolio fully invested, with minimal cash holdings. However, at times we

may judge that market conditions make pursuing the fund's usual investment

strategies inconsistent with the best interests of its shareholders. We then

may temporarily use alternative strategies that are mainly designed to limit

losses. However, we may choose not to use these strategies for a variety of

reasons, even in very volatile market conditions. These strategies may cause

the fund to miss out on investment opportunities, and may prevent the fund

from achieving its goal.

* Changes in policies. The Trustees may change the fund's goal, investment

strategies and other policies without shareholder approval, except as

otherwise indicated.

* Portfolio transactions and portfolio turnover rate. Transactions on stock

exchanges, commodities markets and futures markets involve the payment by

the fund of brokerage commissions. The fund paid $20,229,020 in brokerage

commissions during the last fiscal year, representing 0.30% of the fund's

average net assets. Of this amount, $6,860,303, representing 0.10% of the

fund's average net assets, was paid to brokers who also provided research

services. Additional information regarding Putnam's brokerage selection

procedures is included in the SAI.

Although brokerage commissions and other portfolio transaction costs are

not reflected in the fund's Total Annual Fund Operating Expenses ratio (as

shown in the Annual Fund Operating Expenses table in the section "Fees and

expenses"), they are reflected in the fund's total return. Combining the

brokerage commissions paid by the fund during the last fiscal year (as a

percentage of the fund's average net assets) with the fund's Total Annual

Fund Operating Expenses ratio for class A shares results in a "combined

cost ratio" of 1.42% of the fund's average net assets for class A shares

for the last fiscal year.

Investors should exercise caution in comparing brokerage commissions and

combined cost ratios for different types of funds. For example, while

brokerage commissions represent one component of the fund's transaction

costs, they do not reflect any undisclosed amount of profit or "mark-up"

included in the price paid by the fund for principal transactions

(transactions made directly with a dealer or other counterparty), including

most fixed income securities and certain derivatives. In addition,

brokerage commissions do not reflect other elements of transaction costs,

including the extent to which the fund's purchase and sale transactions may

change the market price for an investment (the "market impact").

Another factor in transaction costs is the fund's portfolio turnover rate,

which measures how frequently the fund buys and sells investments. During

the past five years, the fund's fiscal year portfolio turnover rate and the

average turnover rate for the fund's Lipper

category were as follows.

Turnover Comparison

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2005 2004 2003 2002 2001

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Putnam New

Opportunities Fund 97% 61% 42% 77% 68%

Lipper Multi-Cap

Growth Funds Average* 150% 150% 177% 152% 180%

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* Average portfolio turnover rate of funds viewed by Lipper Inc. as having

the same investment classification or objective as the fund. The Lipper

category average portfolio turnover rate is calculated using the portfolio

turnover rate for the fiscal year end of each fund in the Lipper category.

Fiscal years may vary across funds in the Lipper category, which may limit

the comparability of the fund's portfolio turnover rate to the Lipper

average. Comparative data for the last fiscal year is based on information

available as of June 30, 2005.

Both the fund's portfolio turnover rate and the amount of

brok erage commissions it pays will vary over time based on market

conditions. High turnover may lead to increased costs and shareholder taxes

and decreased performance and, for investors in taxable accounts, increased

taxes.

Putnam Management is not permitted to consider sales of shares of the fund

(or of the other Putnam funds) as a factor in the selection of

broker-dealers to execute portfolio transactions for the fund.

* Portfolio holdings. The SAI includes a description of the fund's policies

with respect to the disclosure of its portfolio holdings. For information on

the fund's portfolio, you may visit the Putnam Investments Web site,

www.putnam.com/individual, where the fund's top 10 holdings and related

portfolio information may be viewed monthly beginning approximately 15 days

after the end of each month, and full portfolio holdings may be viewed

beginning on the last business day of the month after the end of each

calendar quarter. This information will remain available on the Web site

until the fund files a Form N-CSR or N-Q with the Securities and Exchange

Commission (SEC) for the period that includes the date of the information.

Who manages the fund?

The fund's Trustees oversee the general conduct of the fund's business. The

Trustees have retained Putnam Management to be the fund's investment

manager, responsible for making investment decisions for the fund and

managing the fund's other affairs and business. The basis for the Trustees'

approval of the fund's management contract is discussed in the fund's

annual report to shareholders dated June 30, 2005. The fund pays Putnam

Management a quarterly management fee for these services based on the

fund's average net assets. The fund paid Putnam Management a management fee

(after applicable waivers) of 0.52% of average net assets for the fund's

last fiscal year. Putnam Management's address is One Post Office Square,

Boston, MA 02109.

* Investment management teams. Putnam Management's investment professionals

are organized into investment management teams, with a particular team

dedicated to a specific asset class. The members of the Mid-Cap Growth and

Small and Emerging Growth Teams manage the fund's investments. The names of

all team members can be found at www.putnam.com.

The team members identified as the fund's Portfolio Leader and Portfolio

Members coordinate the team's efforts related to the

fund and are primarily responsible for the day-to-day management

of the fund's portfolio. In addition to these individuals, the team

also includes other investment professionals, whose analysis,

recommendations and research inform investment decisions made for the fund.

--------------------------------------------------------------------------------

Positions Over

Portfolio Leader Since Employer Past Five Years

--------------------------------------------------------------------------------

Kevin Divney 2004 Putnam Chief Investment Officer

Management Mid Cap Growth Team

1997 - Present Previously, Sr. Portfolio

Manager; Portfolio Manager

--------------------------------------------------------------------------------

Positions Over

Portfolio Members Since Employer Past Five Years

--------------------------------------------------------------------------------

Brian DeChristopher 2005 Putnam Analyst

Management

1999 - Present

--------------------------------------------------------------------------------

Richard Weed 2003 Putnam Senior Portfolio Manager

Management Previously, Portfolio

2000 - Present Manager

State Street Senior Portfolio Manager

Global Advisors

Prior to Dec. 2000

--------------------------------------------------------------------------------

* Other funds managed by the Portfolio Leader and Portfolio Members. As of

the fund's fiscal year-end, Kevin Divney was also a Portfolio Leader of

Putnam Vista Fund. Brian DeChristopher was also a Portfolio Member of Putnam

Vista Fund and Richard Weed was also a Portfolio Leader of Putnam Discovery

Growth Fund, Putnam OTC & Emerging Growth Fund and Putnam Small Cap Growth

Fund. Brian DeChristopher, Kevin Divney and Richard Weed may also manage

other accounts and variable trust funds managed by Putnam Management or an

affiliate. The SAI provides additional information about other accounts

managed by these individuals.

* Changes in the fund's Portfolio Leaders and Portfolio Members. During the

fiscal year ended June 30, 2005, Portfolio Member Kevin Divney, became

Portfolio Leader of your fund's management team and Portfolio Members Kevin

Doerr and Brian O'Toole left the fund's management team. Other individuals

who have served as Portfolio Leader of the fund since May 2002, when Putnam

Management introduced this designation, include Paul Marrkand (September

2004 through July 2005) and Daniel L. Miller (May 2002 through September

2004). Paul Marrkand left the fund after the end of its fiscal year and

Brian DeChristopher joined the fund's management team after the end of its

fiscal year.

* Fund ownership. The following table shows the dollar ranges of shares of

the fund owned by the professionals listed above at the end of the fund's

last two fiscal years, including investments by their immediate family

members and amounts invested through retirement and deferred compensation

plans.

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Fund Portfolio Leader and Portfolio Members

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$1- $10,001- $50,001- $100,001- $500,001- $1,000,001

Year $0 $10,000 $50,000 $100,000 $500,000 $1,000,000 and over

------------------------------------------------------------------------------------------

Kevin Divney 2005 *

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Portfolio Leader N/A

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Brian DeChristopher N/A

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Portfolio Member N/A

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Richard Weed 2005 *

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Portfolio Member 2004 *

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N/A indicates the individual became a Portfolio Leader or Portfolio Member

after the reporting date.

Mr. DeChristopher, who joined the fund's management team after the end of

its fiscal year, owned fund shares valued at $10,001 - $50,000 as of August

31, 2005.

* Investment in the fund by Putnam employees and the Trustees. As of June

30, 2005, all of the 12 Trustees of the Putnam funds owned fund shares. The

table shows the approximate value of investments in the fund and all Putnam

funds as of that date by Putnam employees and the fund's Trustees, including

in each case investments by their immediate family members and amounts

invested through retirement and deferred compensation plans.

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Fund All Putnam funds

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Putnam employees $16,000,000 $457,000,000

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Trustees $149,000 $49,000,000

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The following table shows how much the members of Putnam's Executive Board

have invested in the fund (in dollar ranges). Information shown is for June

30, 2005 and June 30, 2004.

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Putnam Executive Board

---------------------------------------------------------------------------------------------

$1 - $10,001 - $50,001- $100,001

Year $0 $10,000 $50,000 $100,000 and over

---------------------------------------------------------------------------------------------

Philippe Bibi 2005 *

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Chief Technology Officer 2004 *

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Joshua Brooks 2005 *

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Deputy Head of Investments N/A

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William Connolly N/A

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Head of Retail Management N/A

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Kevin Cronin 2005 *

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Head of Investments 2004 *

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Charles Haldeman, Jr. 2005 *

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President and CEO 2004 *

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Amrit Kanwal 2005 *

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Chief Financial Officer 2004 *

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Steven Krichmar 2005 *

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Chief of Operations 2004 *

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Francis McNamara, III 2005 *

---------------------------------------------------------------------------------------------

General Counsel 2004 *

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Richard Robie, III 2005 *

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Chief Administrative Officer 2004 *

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Edward Shadek 2005 *

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Deputy Head of Investments N/A

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Sandra Whiston N/A

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Head of Institutional Management N/A

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N/A indicates the individual was not a member of Putnam's Executive Board as

of 6/30/04

* Compensation of investment professionals. Putnam Management believes that

its investment management teams should be compensated primarily based on

their success in helping investors achieve their goals. The portion of

Putnam Investments' total incentive compensation pool that is available to

Putnam Management's Investment Division is based primarily on its delivery,

across all of the portfolios it manages, of consistent, dependable and

superior performance over time. The peer group for the fund, Multi Cap

Growth Funds, is its broad investment category as determined by Lipper Inc.

The portion of the incentive compensation pool available to each of your

investment management teams varies based primarily on its delivery, across

all of the portfolios it manages, of consistent, dependable and superior

performance over time on a before-tax basis.

* Consistent performance means being above median over one year.

* Dependable performance means not being in the 4th quartile of the peer

group over one, three or five years.

* Superior performance (which is the largest component of Putnam

Management's incentive compensation program) means being in the top third of

the peer group over three and five years.

In determining an investment management team's portion of the incentive

compensation pool and allocating that portion to individual team members,

Putnam Management retains discretion to reward or penalize teams or

individuals, including the fund's Portfolio Leader and Portfolio Members,

as it deems appropriate, based on other factors. The size of the overall

incentive compensation pool each year is determined by Putnam Management's

parent company, Marsh & McLennan Companies, Inc., and depends in large part

on Putnam's profitability for the year, which is influenced by assets under

management. Incentive compensation is generally paid as cash bonuses, but a

portion of incentive compensation may instead be paid as grants of

restricted stock, options or other forms of compensation, based on the

factors described above. In addition to incentive compensation, investment

team members receive annual salaries that are typically based on seniority

and experience. Incentive compensation generally represents at least 70% of

the total compensation paid to investment team members.

* Regulatory matters and litigation. Putnam Management has entered into

agreements with the Securities and Exchange Commission and the Massachusetts

Securities Division settling charges connected with excessive short-term

trading by Putnam employees and, in the case of the charges brought by the

Massachusetts Securities Division, by participants in some

Putnam-administered 401(k) plans. Pursuant to these settlement agreements,

Putnam Management will pay a total of $193.5 million in penalties and

restitution, with $153.5 million being paid to shareholders and the funds.

The restitution amount will be allocated to shareholders pursuant to a plan

developed by an independent consultant, with payments to shareholders

following approval of the plan by the SEC and the Massachusetts Securities

Division.

The SEC's and Massachusetts Securities Division's allegations and related

matters also serve as the general basis for numerous lawsuits, including

purported class action lawsuits filed against Putnam Management and certain

related parties, including certain Putnam funds. Putnam Management will bear

any costs incurred by Putnam funds in connection with these lawsuits. Putnam

Management believes that the likelihood that the pending private lawsuits

and purported class action lawsuits will have a material adverse financial

impact on the fund is remote, and the pending actions are not likely to

materially affect its ability to provide investment management services to

its clients, including the Putnam funds.

How does the fund price its shares?

The price of the fund's shares is based on its net asset value (NAV). The

NAV per share of each class equals the total value of its assets, less its

liabilities, divided by the number of its outstanding shares. Shares are

only valued as of the close of regular trading on the New York Stock

Exchange (NYSE) each day the exchange is open.

The fund values its investments for which market quotations are readily

available at market value. It values short-term investments that will

mature within 60 days at amortized cost, which approximates market value.

It values all other investments and assets at their fair value. For

example, the fund may value a stock traded on a U.S. exchange at its fair

value when the exchange closes early or trading in the stock is suspended.

It may also value a stock at fair value if recent transactions in the stock

have been very limited or material information about the issuer becomes

available after the close of the relevant market. The value determined for

an investment using the fund's fair value pricing procedures may differ

from recent market prices for the investment.

The fund translates prices for its investments quoted in foreign currencies

into U.S. dollars at current exchange rates, which are generally determined

as of 11:00 a.m. Eastern time each day the NYSE is open. As a result,

changes in the value of those currencies in relation to the U.S. dollar may

affect the fund's NAV. If there has been a movement in the U.S. currency

market that exceeds a specified threshold that may change from time to time,

the fund will generally use exchange rates determined as of 3:00 p.m.

Eastern time. Because foreign markets may be open at different times than

the NYSE, the value of the fund's shares may change on days when

shareholders are not able to buy or sell them. Many securities markets and

exchanges outside the U.S. close prior to the close of the NYSE and

therefore the closing prices for securities in such markets or on such

exchanges may not fully reflect events that occur after such close but

before the close of the NYSE. As a result, the fund has adopted fair value

pricing procedures, which, among other things, require the fund to fair

value foreign equity securities if there has been a movement in the U.S.

market that exceeds a specified threshold that may change from time to time.

As noted above, the value determined for an investment using the fund's fair

value pricing procedures may differ from recent market prices for the

investment.

How do I buy fund shares?

All orders to purchase shares must be made through your employer's

retirement plan. For more information about how to purchase shares of the

fund through your employer's plan or limitations on the amount that may be

purchased, please consult your employer.

Putnam Retail Management generally must receive your plan's completed buy

order before the close of regular trading on the NYSE for shares to be

bought at that day's offering price.

To eliminate the need for safekeeping, the fund will not issue

certificates for shares.

Mutual funds must obtain and verify information that identifies investors

opening new accounts. If the fund is unable to collect the required

information, Putnam Investor Services may not be able to open your fund

account. Investors must provide their full name, residential or business

address, Social Security or tax identification number, and date of birth.

Entities, such as trusts, estates, corporations and partnerships, must also

provide other identifying information. Putnam Investor Services may share

identifying information with third parties for the purpose of verification.

If Putnam Investor Services cannot verify identifying information after

opening your account, the fund reserves the right to close your account.

The fund may periodically close to new purchases of shares or refuse any

order to buy shares if the fund determines that doing so would be in the

best interests of the fund and its shareholders.

* Distribution (12b-1) plan. The fund has adopted a distribution plan to pay

for the marketing of class A shares and for services provided to

shareholders. The plan provides for payments at an annual rate (based on

average net assets) of up to 0.35%. The Trustees currently limit payments on

class A shares to 0.25% of average net assets. Because the fees are paid out

of the fund's assets on an ongoing basis, they will increase the cost of

your investment.

* Eligible retirement plans. An employer-sponsored retirement plan is

eligible to purchase class A shares without an initial sales charge through

this prospectus if its plan administrator or dealer of record has entered

into an agreement with Putnam Retail Management or it invests at least $1

million in class A shares of the fund or other Putnam funds.

* Payments to dealers. If you purchase your shares through a dealer (the

term "dealer" includes any broker, dealer, bank, bank trust department,

registered investment advisor, financial planner, retirement plan

administrator and any other institution having a selling, services or any

similar agreement with Putnam Retail Management or one of its affiliates),

your dealer generally receives payments from Putnam Retail Management

representing some or all of the sales charges and distribution (12b-1) fees,

if any, shown in the tables under the heading "Fees and Expenses" at the

front of this prospectus.

Putnam Retail Management and its affiliates also pay additional compensation

to selected dealers in recognition of their marketing support and/or program

servicing (each of which is described in more detail below). These payments

may create an incentive for a dealer firm or its representatives to

recommend or offer shares of the fund or other Putnam funds to its

customers. These additional payments are made by Putnam Retail Management

and its affiliates and do not increase the amount paid by you or the fund as

shown under the heading "Fees and Expenses".

The additional payments to dealers by Putnam Retail Management and its

affiliates are generally based on one or more of the following factors:

average net assets of a fund attributable to that dealer, sales of a fund

attributable to that dealer, or reimbursement of ticket charges (fees that

a dealer firm charges its representatives for effecting transactions in

fund shares), or on the basis of a negotiated lump sum payment for services

provided.

Marketing support payments, which are generally available to most dealers

engaging in significant sales of Putnam fund shares, are not expected, with

certain limited exceptions, to exceed 0.085% of the average net assets of

Putnam's retail mutual funds attributable to that dealer on an annual

basis.

Program servicing payments, which are paid in some instances to third

parties in connection with investments in the fund by retirement plans and

other investment programs, are not expected, with certain limited

exceptions, to exceed 0.15% of the total assets in the program on an annual

basis.

Putnam Retail Management and its affiliates may make other payments or

allow other promotional incentives to dealers to the extent permitted by

SEC and NASD rules and by other applicable laws and regulations. Certain

dealers also receive payments in recognition of subaccounting or other

services they provide to shareholders or plan participants who invest in

the fund or other Putnam funds through their retirement plan. See the

discussion in the SAI under the heading "Management -- Investor Servicing

Agent and Custodian" for more details.

You can find more details in the SAI about the payments made by Putnam

Retail Management and its affiliates and the services provided by your

dealer. Your dealer may charge you fees or commissions in addition to those

disclosed in this prospectus. You can also ask your dealer about any

payments it receives from Putnam Retail Management and its affiliates and

any services your dealer provides, as well as about fees and/or commissions

it charges.

How do I sell fund shares?

Subject to any restrictions imposed by your employer's plan, you can sell

your shares through the plan back to the fund any day the NYSE is open. For

more information about how to sell shares of the fund through your

employer's plan, including any charges that the plan may impose, please

consult your employer.

The fund will impose a short-term trading fee of 2.00% of the total

redemption amount (calculated at market value) if you sell or exchange your

shares after holding them for 5 days or less (including if you purchased

the shares by exchange). The short-term trading fee is paid directly to the

fund and is designed to offset brokerage commissions, market impact and

other costs associated with short-term trading. For investors in defined

contribution plans administered by Putnam or a Putnam affiliate, the

short-term trading fee will not apply in certain circumstances, such as

redemptions to pay distributions or loans from such plans, redemptions of

shares purchased directly with contributions by a plan participant or

sponsor, redemptions of shares purchased in connection with loan

repayments, redemptions in the event of shareholder death or post-purchase

disability, redemptions made as part of a systematic withdrawal plan and

redemptions from certain omnibus accounts. These exceptions may also apply

to defined contribution plans administered by third parties that assess the

fund's short-term trading fee. For purposes of determining whether the

short-term trading fee applies, the shares that were held the longest will

be redeemed first. Some financial intermediaries, retirement plan sponsors

or recordkeepers that hold omnibus accounts with the fund are currently

unable or unwilling to assess the fund's short-term trading fee. Some of

these firms use different systems or criteria to assess fees that are

currently higher than, and in some cases in addition to, the fund's

short-term trading fee.

Your plan administrator must send a signed letter of instruction to Putnam

Investor Services. The price you will receive is the next NAV per share

calculated after the fund receives the instruction in proper form. In order

to receive that day's NAV, Putnam Investor Services must receive the

instruction before the close of regular trading on the NYSE.

The fund generally sends payment for your shares the business day after

your request is received. Under unusual circumstances, the fund may suspend

redemptions, or postpone payment for more than seven days, as permitted by

federal securities law.

How do I exchange fund shares?

Subject to any restrictions your plan imposes, you can exchange your fund

shares for shares of other Putnam funds offered through your employer's

plan without a sales charge. Contact your plan administrator or Putnam

Investor Services for more information.

The exchange privilege is not intended as a vehicle for short-term trading.

In order to discourage excessive exchange activity and otherwise to promote

the best interests of the fund, the fund will impose a short-term trading

fee of 2.00% of the total exchange amount (calculated at market value) on

exchanges of shares held for 5 days or less (including shares purchased by

exchange). In the case of defined contribution plans administered by Putnam

or a Putnam affiliate, the 2.00% short-term trading fee will apply to

exchanges of shares purchased by exchange that are held in a plan

participant's account for 5 days or less. Some financial intermediaries,

retirement plan sponsors or recordkeepers that hold omnibus accounts with

the fund are currently unable or unwilling to assess the fund's short-term

trading fee. Some of these firms use different systems or criteria to assess

fees that are currently higher than, and in some cases in addition to, the

fund's short-term trading fee.

The fund also reserves the right to revise or terminate the exchange

privilege, limit the amount or number of exchanges or reject any exchange.

The fund into which you would like to exchange may also reject your

exchange. These actions may apply to all shareholders or only to those

shareholders whose exchanges Putnam Management determines are likely to

have a negative effect on the fund or other Putnam funds.

Policy on excessive short-term trading

* Risks of excessive short-term trading. Excessive short-term trading

activity may reduce the fund's performance and harm all fund shareholders by

interfering with portfolio management, increasing the fund's expenses and

diluting the fund's net asset value. Depending on the size and frequency of

short-term trades in the fund's shares, the fund may experience increased

cash volatility, which could require the fund to maintain undesirably large

cash positions or buy or sell portfolio securities it would not have bought

or sold. The need to execute additional portfolio transactions due to these

cash flows may also increase the fund's brokerage and administrative costs

and, for investors in taxable accounts, may increase the taxable

distributions received from the fund.

When the fund invests in foreign securities, its performance may be

adversely impacted and the interests of longer-term shareholders may be

diluted as a result of time-zone arbitrage, a short-term trading practice

that seeks to exploit changes in the value of the fund's investments that

result from events occurring after the close of the foreign markets on

which the investments trade, but prior to the later close of trading on the

NYSE, the time as of which the fund determines its net asset value. If an

arbitrageur is successful, he or she may dilute the interests of other

shareholders by trading shares at prices that do not fully reflect their

fair value.

Because the fund invests in securities that may trade infrequently

or may be more difficult to value, such as securities of smaller

companies, it may be susceptible to trading by short-term traders who seek

to exploit perceived price inefficiencies in the fund's investments. In

addition, the market for securities of smaller companies may at times show

"market momentum," in which positive or negative performance may continue

from one day to the next for reasons unrelated to the fundamentals of the

issuer. Short-term traders may seek to capture this momentum by trading

frequently in the fund's shares, which may reduce the fund's performance

and may dilute the interests of other shareholders. Because securities of

smaller companies may be less liquid than securities of larger companies,

the fund may also be unable to buy or sell these securities at desirable

prices when the need arises (for example, in response to volatile cash

flows caused by short-term trading). Similar risks may apply if the fund

holds other types of less liquid securities, including below investment

grade bonds.

* Fund policies. In order to protect the interests of long-term shareholders

of the fund, Putnam Management and the fund's Trustees have adopted policies

and procedures intended to discourage excessive short-term trading. The fund

seeks to discourage excessive short-term trading by imposing short-term

trading fees and using fair value pricing procedures to value investments

under some circumstances. In addition, Putnam Management monitors activity

in shareholder accounts about which it possesses the necessary information

in order to detect excessive short-term trading patterns and takes steps to

deter excessive short-term traders.

Putnam Management and the fund reserve the right to reject or restrict

purchases or exchanges for any reason. Putnam Management or the fund may

determine that an investor's trading activity is excessive or otherwise

potentially harmful based on various factors, including an investor's or

financial intermediary's trading history in the fund, other Putnam funds or

other investment products, and may aggregate activity in multiple accounts

under common ownership or control. If the fund identifies an investor or

intermediary as a potential excessive trader, it may, among other things,

impose limitations on the amount, number, manner, or frequency of future

purchases or exchanges or temporarily or permanently bar the investor or

intermediary from investing in the fund or other Putnam funds. The fund may

take these steps in its discretion even if the investor's activity may not

have been detected by the fund's current monitoring parameters.

* Limitations on the fund's policies. There is no guarantee that the fund

will be able to detect excessive short-term trading in all accounts. For

example, Putnam Management currently does not have access to sufficient

information to identify each investor's trading history, and in certain

circumstances there are operational or technological constraints on its

ability to enforce the fund's policies. In addition, even when Putnam

Management has sufficient information, its detection methods may not capture

all excessive short-term trading.

In particular, many purchase, redemption and exchange orders are received

from financial intermediaries that hold omnibus accounts with the fund.

Omnibus accounts, in which shares are held in the name of an intermediary on

behalf of multiple beneficial owners, are a common form of holding shares

among retirement plans and financial intermediaries such as brokers,

advisers and third-party administrators. The fund is generally not able to

identify trading by a particular beneficial owner within an omnibus account,

which makes it difficult or impossible to determine if a particular

shareholder is engaging in excessive short-term trading. Putnam Management

monitors aggregate cash flows in omnibus accounts on an ongoing basis. If

high cash flows or other information indicate that excessive short-term

trading may be taking place, Putnam Management will contact the financial

intermediary, plan sponsor or recordkeeper that maintains accounts for the

underlying beneficial owner and attempt to identify and remedy any excessive

trading. However, the fund's ability to monitor and deter excessive

short-term traders in omnibus accounts ultimately depends on the

capabilities and cooperation of these third-party financial firms. The

fund's policies on exchanges may also be modified for accounts held by

certain retirement plans to conform to plan exchange limits or Department of

Labor requirements. A financial intermediary or plan sponsor may impose

different or additional limits on short-term trading.

* Blackout periods for Putnam employees. Putnam Investments imposes blackout

periods on investments in the Putnam funds (other than money market funds)

by its employees and certain family members. Employees of Putnam Investments

and covered family members may not make a purchase followed by a sale, or a

sale followed by a purchase, in any non-money market Putnam fund within any

90-calendar day period. Members of Putnam Management's Investment Division,

certain senior executives, and certain other employees with access to

investment information, as well as their covered family members, are subject

to a blackout period of one year. These blackout periods are subject to

limited exceptions.

Fund distributions and taxes

The fund normally distributes any net investment income and any net

realized capital gains annually.

The terms of your employer's plan will govern how your employer's plan may

receive distributions from the fund. Generally, periodic distributions from

the fund to your employer's plan are reinvested in additional fund shares,

although your employer's plan may permit you to receive fund distributions

from net investment income in cash while reinvesting capital gains

distributions in additional shares or to receive all fund distributions in

cash. If you do not select another option, all distributions will be

reinvested in additional fund shares.

Generally, for federal income tax purposes, fund distributions are taxable

as ordinary income, except that any distributions of long-term capital

gains will be taxed as such regardless of how long you have held your

shares. However, distributions by the fund to retirement plans that qualify

for tax-exempt treatment under federal income tax laws will not be taxable.

Special tax rules apply to investments through such plans. You should

consult your tax advisor to determine the suitability of the fund as an

investment through such a plan and the tax treatment of distributions

(including distributions of amounts attributable to an investment in the

fund) from such a plan.

The fund's investments in foreign securities may be subject to foreign

withholding taxes. In that case, the fund's return on those investments

would be decreased.

You should consult your tax advisor for more information on your own tax

situation, including possible foreign, state and local taxes.

Financial highlights

The financial highlights table is intended to help you understand the

fund's recent financial performance. Certain information reflects financial

results for a single fund share. The total returns represent the rate that

an investor would have earned or lost on an investment in the fund,

assuming reinvestment of all dividends and distributions. This information

has been derived from the fund's financial statements, which have been

audited by PricewaterhouseCoopers LLP. Its report and the fund's financial

statements are included in the fund's annual report to shareholders, which

is available upon request.

Financial highlights

(For a common share outstanding throughout the period)

CLASS A

------------------------------------------------------------------------------------------------------------

PER-SHARE OPERATING PERFORMANCE

------------------------------------------------------------------------------------------------------------

Year ended

6/30/05 6/30/04 6/30/03 6/30/02 6/30/01

------------------------------------------------------------------------------------------------------------

Net asset value,

beginning of period $38.96 $32.79 $32.28 $47.97 $96.61

------------------------------------------------------------------------------------------------------------

Investment operations:

Net investment

income (loss) (a) .03 (d,f,g) (.19) (d) (.17) (.22) (.37)

------------------------------------------------------------------------------------------------------------

Net realized and unrealized

gain (loss) on investments 2.61 6.36 .68 (15.47) (38.81)

------------------------------------------------------------------------------------------------------------

Total from

investment operations 2.64 6.17 .51 (15.69) (39.18)

------------------------------------------------------------------------------------------------------------

Less distributions:

From net realized gain

on investments -- -- -- -- (9.46)

------------------------------------------------------------------------------------------------------------

Total distributions -- -- -- -- (9.46)

------------------------------------------------------------------------------------------------------------

Redemption fees -- (e) -- (e) -- -- --

------------------------------------------------------------------------------------------------------------

Net asset value,

end of period $41.60 $38.96 $32.79 $32.28 $47.97

------------------------------------------------------------------------------------------------------------

Total return at

net asset value (%)(b) 6.78 (g) 18.82 1.58 (32.71) (43.10)

RATIOS AND SUPPLEMENTAL DATA

------------------------------------------------------------------------------------------------------------

Net assets, end of period

(in thousands) $4,650,755 $5,075,005 $6,262,164 $7,683,016 $12,595,034

------------------------------------------------------------------------------------------------------------

Ratio of expenses to

average net assets (%) (c) 1.12 (d) 1.09 (d) 1.09 .98 .89

------------------------------------------------------------------------------------------------------------

Ratio of net investment

income (loss)

to average net assets (%) .07 (d,f,g) (.52) (d) (.57) (.57) (.55)

------------------------------------------------------------------------------------------------------------

Portfolio turnover (%) 97.25 60.86 42.43 76.67 67.74

(a) Per share net investment income (loss) has been determined on the basis of the

weighted average number of shares outstanding during the period.

(b) Total return assumes dividend reinvestment and does not reflect the effect of

sales charges.

(d) Reflects waivers of certain fund expenses in connection with investments in

Putnam Prime Money Market Fund during the period. As a result of such waivers, the

expenses of the fund for the periods ended June 30, 2005 and June 30, 2004 reflect a

reduction of less than 0.01% of average net assets for class A shares.

(e) Amount represents less than $0.01 per share.

(f) Reflects a special dividend which amounted to $0.15 per share and 0.39% of

average net assets.

(g) Reflects a non-recurring accrual related to Putnam Management's settlement with

the SEC regarding brokerage allocation practices, which amounted to $0.02 per share

and 0.05% of average net assets for class A shares.

[This page left intentionally blank]

For more information

about Putnam New

Opportunities Fund

The fund's SAI and annual and semi-annual reports to shareholders include

additional information about the fund. The SAI, and the independent

registered public accounting firm's report and the financial statements

included in the fund's most recent annual report to its shareholders, are

incorporated by reference into this prospectus, which means they are part

of this prospectus for legal purposes. The fund's annual report discusses

the market conditions and investment strategies that significantly

affected the fund's performance during its last fiscal year. You may get

free copies of these materials, request other information about any Putnam

fund, or make shareholder inquiries, by visiting Putnam's Web site at

www.putnam.com/individual, or by calling Putnam toll-free at 1-800-752-9894.

You may review and copy information about a fund, including its SAI, at the

Securities and Exchange Commission's Public Reference Room in Washington,

D.C. You may call the Commission at 1-202-942-8090 for information about

the operation of the Public Reference Room. You may also access reports and

other information about the fund on the EDGAR Database on the Commission's

Internet site at http://www.sec.gov. You may get copies of this information,

with payment of a duplication fee, by electronic request at the following

E-mail address: publicinfo@sec.gov, or by writing the Commission's Public

Reference Section, Washington, D.C. 20549-0102. You may need to refer to the

fund's file number.

Communications from Putnam other than the prospectus and related supplements

are provided in the English language.

PUTNAM INVESTMENTS

One Post Office Square

Boston, Massachusetts 02109

1-800-752-9894

Address correspondence to

Putnam Investor Services

P.O. Box 9740

Providence, Rhode Island 02940-9740

www.putnam.com

DA013 228448 10/05 File No. 811-06128

Prospectus

10/30/05

Putnam New

Opportunities Fund

Class Y shares

Investment Category: Growth

This prospectus explains what you should know about this mutual fund

before you invest. Please read it carefully.

Putnam Investment Management, LLC (Putnam Management), which has managed

mutual funds since 1937, manages the fund.

These securities have not been approved or disapproved by the Securities

and Exchange Commission nor has the Commission passed upon the accuracy or

adequacy of this prospectus. Any statement to the contrary is a crime.

CONTENTS

2 Fund summary

2 Goal

2 Main investment strategies

2 Main risks

2 Performance information

3 Fees and expenses

4 What are the fund's main investment strategies and related risks?

8 Who manages the fund?

13 How does the fund price its shares?

14 How do I buy fund shares?

16 How do I sell fund shares?

17 How do I exchange fund shares?

18 Policy on excessive short-term trading

20 Fund distributions and taxes

21 Financial highlights

[SCALE LOGO OMITTED]

Fund summary

GOAL

The fund seeks long-term capital appreciation.

MAIN INVESTMENT STRATEGIES -- GROWTH STOCKS

We invest mainly in common stocks of U.S. companies, with a focus on growth

stocks. Growth stocks are issued by companies that we believe are

fast-growing and whose earnings we believe are likely to increase over

time. Growth in earnings may lead to an increase in the price of the stock.

We may invest in companies of any size.

MAIN RISKS

The main risks that could adversely affect the value of the fund's shares

and the total return on your investment include:

* The risk that the stock price of one or more of the companies in the

fund's portfolio will fall, or will fail to rise. Many factors can adversely

affect a stock's performance, including both general financial market

conditions and factors related to a specific company or industry. This risk

is generally greater for small and midsized companies, which tend to be more

vulnerable to adverse developments.

* The risk that movements in financial markets will adversely affect the

price of the fund's investments, regardless of how well the companies in

which we invest perform. The market as a whole may not favor the types of

investments we make.

You can lose money by investing in the fund. The fund may not achieve its

goal, and is not intended as a complete investment program. An investment

in the fund is not a deposit in a bank and is not insured or guaranteed by

the Federal Deposit Insurance Corporation or any other government agency.

PERFORMANCE INFORMATION

The following information provides some indication of the fund's risks. The

chart shows year-to-year changes in the performance of the fund's class Y

shares. The table following the chart compares the fund's performance to

that of a broad measure of market performance. Of course, a fund's past

performance is not an indication of future performance.

[GRAPHIC OMITTED: vertical bar chart CALENDAR YEAR TOTAL RETURNS]

CALENDAR YEAR TOTAL RETURNS

1995 46.60%

1996 11.14%

1997 22.82%

1998 24.71%

1999 70.09%

2000 -25.95%

2001 -29.90%

2002 -30.46%

2003 32.97%

2004 10.39%

Year-to-date performance through 9/30/05 was 6.05%. During the periods

shown in the bar chart, the highest return for a quarter was 50.09%

(quarter ending 12/31/99) and the lowest return for a quarter was -29.26%

(quarter ending 9/30/01).

Average Annual Total Returns (for periods ending 12/31/04)

-------------------------------------------------------------------------

Past Past Past

1 year 5 years 10 years

-------------------------------------------------------------------------

Class Y 10.39% -11.93% 8.44%

Russell 3000 Growth Index 6.93% -8.87% 9.30%

-------------------------------------------------------------------------

The fund's performance is compared to the Russell 3000 Growth Index, an

unmanaged index of those companies in the Russell 3000 Index chosen for

their growth orientation.

FEES AND EXPENSES

This table summarizes the fees and expenses you may pay if you invest in

class Y shares of the fund. Expenses are based on the fund's last fiscal

year.

Shareholder Fees (fees paid directly from your investment)

------------------------------------------------------------------------------

Maximum Sales Charge (Load) NONE

Maximum Deferred Sales Charge (Load) NONE

Maximum Redemption Fee*

(as a percentage of total redemption proceeds) 2.00%

------------------------------------------------------------------------------

Annual Fund Operating Expenses+

(expenses that are deducted from fund assets)

------------------------------------------------------------------------------

Total Annual

Management Other Fund Operating

Fees Expenses Expenses

------------------------------------------------------------------------------

Class Y 0.52% 0.35% 0.87%

------------------------------------------------------------------------------

* A 2.00% redemption fee (also referred to as a "short-term trading fee")

may apply to any shares that are redeemed (either by selling or exchanging

into another fund) within 5 days of purchase.

+ See the section "Who manages the fund?" for a discussion of regulatory matters

and litigation.