497 1 pie1.txt PUTNAM INTERNATIONAL EQUITY FUND Prospectus Supplement 224325 4/05 dated April 30, 2005 to: ------------------------------------------------------------------------------- PUTNAM INTERNATIONAL EQUITY FUND Class A prospectus dated October 30, 2004 The Calendar Year Total Returns chart and Average Annual Total Returns chart in the section "Performance Information" are replaced with the following: [GRAPHIC OMITTED: vertical bar chart CALENDAR YEAR TOTAL RETURNS] CALENDAR YEAR TOTAL RETURNS 1995 13.97% 1996 16.12% 1997 17.78% 1998 18.95% 1999 60.77% 2000 -9.06% 2001 -19.76% 2002 -17.03% 2003 28.14% 2004 16.18% Year-to-date performance through 3/31/05 was -0.68%. During the periods shown in the bar chart, the highest return for a quarter was 35.66% (quarter ending 12/31/99) and the lowest return for a quarter was -20.70% (quarter ending 9/30/02). Average Annual Total Returns (for periods ending 12/31/04) ------------------------------------------------------------------------------- Past 1 Past 5 Past 10 year years years ------------------------------------------------------------------------------- Class A 16.18% -2.05% 10.39% Morgan Stanley Capital International (MSCI) EAFE Index 20.25% -1.13% 5.62% ------------------------------------------------------------------------------- Class A share performance reflects the waiver of sales charges for purchases through eligible retirement plans. For portions of the period, the fund's performance benefited from Putnam Management's agreement to limit the fund's expenses. The fund's performance is compared to the Morgan Stanley Capital International (MSCI) EAFE Index, an unmanaged index of international stocks from Europe, Australasia and the Far East. ------------------------ The sixth paragraph and table under the heading "Who manages the fund?" are replaced with the following: The following team members coordinate the team's management of the fund's portfolio. Their experience as investment professionals over the last five years is shown. The following table also shows the dollar range of shares of the fund owned by these professionals as of September 30, 2004, including investments by their immediate family members and amounts invested through retirement and deferred compensation plans. ------------------------------------------------------------------------------- Dollar Range Portfolio Joined Positions Over of Fund Leaders Fund Employer Past Five Years Shares Owned ------------------------------------------------------------------------------- Joshua L. 2000 Putnam Co-Chief Investment Over $100,000 Byrne Management Officer, International 1992 - Present Core; Previously, Senior Portfolio Manager, Portfolio Manager ------------------------------------------------------------------------------- Simon Davis 2000 Putnam Co-Chief Investment $10,001-$50,000 Management Officer, International 2000 - Present Core; Previously, Director, International Equity, Senior Portfolio Manager, Portfolio Manager Deutsche Asset Portfolio Manager Management Prior to Sept. 2000 ------------------------------------------------------------------------------- Dollar Range Portfolio Joined Positions Over of Fund Members Fund Employer Past Five Years Shares Owned ------------------------------------------------------------------------------- Stephen S. 2000 Putnam Senior Portfolio $50,001-$100,000 Oler Management Manager 1997 - Present ------------------------------------------------------------------------------- Mark D. 2004 Putnam Chief Investment $0 Pollard Management Officer, 2004 - Present European Equity Jura Capital LLP Managing Partner Prior to Aug. 2004 Lazard Asset Head of European Management Equities Prior to Feb. 2002 Putnam Head of European Management Equities Prior to June 2000 ------------------------------------------------------------------------------- George W. 2002 Putnam Senior Portfolio Over $100,000 Stairs Management Manager 1994 - Present ------------------------------------------------------------------------------- Named Investment Professionals Total Over $100,000 ------------------------------------------------------------------------------- The section entitled Regulatory matters and litigation under the heading "Who manages the fund?" is replaced with the following: * 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 currently expected by the end of the summer. 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.