a_intequity.htm

Message from the Trustees

Dear Fellow Shareholder:

In early August, equity markets around the world were rocked by indications of slowing economic growth and worsening debt issues in Europe and the United States. Significantly, Standard & Poor’s downgraded U.S. sovereign debt to AA+ from AAA on August 5. While Putnam’s investment team believes the downgrade will have limited immediate impact on the real economy, it is important to recognize that market volatility has risen in the near term.

Long-term investors are wise to seek the counsel of their financial advisors during volatile times and to remember that market volatility historically has served as an opportunity for nimble managers to both guard against risk and pursue new opportunities. We believe that many investment opportunities still exist today, and that Putnam’s active, research-intensive investment approach offers shareholders a potential advantage in this environment.

We would like to thank John A. Hill, who has served as Chairman of the Trustees since 2000 and who continues on as a Trustee, for his service. We are pleased to announce that Jameson A. Baxter is the new Chair, having served as Vice Chair since 2005 and a Trustee since 1994. Ms. Baxter is President of Baxter Associates, Inc., a private investment firm, and Chair of the Mutual Fund Directors Forum. In addition, she serves as Chair Emeritus of the Board of Trustees of Mount Holyoke College, Director of the Adirondack Land Trust, and Trustee of the Nature Conservancy’s Adirondack Chapter.

Lastly, we would like to take this opportunity to welcome new shareholders to the fund and to thank all of our investors for your continued confidence in Putnam.

Interview with your fund’s portfolio manager

Simon [Sam] Davis

The fund delivered strong results for the year, both on an absolute basis and relative to its benchmark and Lipper peer group average, based on the performance of class A shares before sales charge. What drove this performance?

The fund’s strong showing was chiefly due to our stock selection, while our strategy of hedging foreign currency risk also provided a boost to returns. I think this supports our focus on investment opportunities from the bottom up — that is, we judge companies on a case-by-case basis on valuation, fundamental characteristics, competitive positioning, and future growth prospects. I believe the fund’s relative performance also illustrates how investors who primarily seek to benefit from top-down market themes found it difficult to identify sustained trends to latch on to as the market progressed this year along its persistently volatile path.

You mentioned volatility in international markets over the year. What were the chief causes of this turbulence?

Markets generally saw positive results for the year overall, but the upward trend was disrupted by four significant downward moves. The primary reason behind three of these periods of market retraction — in August and November 2010, and again in June 2011 — was concern over European sovereign debt. This periodic risk aversion resulted in intervals of broad underperformance among European markets, particularly in the debt-laden countries of Portugal, Ireland, Greece, and Spain. Since the spring of 2011, investors became preoccupied with another series of risks, including elevated oil prices, unrest in North Africa and the Middle East, and concern over a slowdown in the U.S. economy and the political deadlock around raising the U.S. debt ceiling. What’s more,

This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 6/30/11. See pages 4 and 10–12 for additional fund performance information. Index descriptions can be found on page 14.

volatility spiked dramatically in March in response to Japan’s earthquake and tsunami, and the resulting concern over damage to the country’s nuclear facilities.

Despite these substantial headwinds, several forces provided an upward lift to markets overall during the period, including continued accommodative monetary conditions around the world, recovering corporate earnings, a rise in corporate activity, and ongoing growth in the emerging markets.

In light of these still-unfolding macroeconomic risks, how did you position the fund?

As I mentioned, our fund management process is driven by bottom-up stock selection, but in today’s environment one cannot ignore macroeconomic concerns. Accordingly, the fund owned stocks of companies in both developed and developing markets that could gain from positive economic data, particularly those companies with exposure to growth in emerging markets. Our out-of-benchmark emerging-market exposure — in Asia and Latin America, in particular, as well as in Russia — aided fund results.

Our view that the European debt crisis would not bring about a double-dip recession during the period was affirmed. While the fund was underweight Europe relative to the benchmark, positions in companies located in better financed and more fiscally sound Northern European countries like Germany generally had a positive effect on performance.

In Japan, we felt that markets plunged too deeply and broadly in response to the earthquake and tsunami, and so while the fund held market-weight exposure to Japan at the time of the disaster, we increased our exposure following the catastrophe in order to take advantage of what we considered to be inexpensive investment opportunities. By period-end, we pulled back on this position, locking in profits for the fund.

Country allocations are shown as a percentage of the fund’s net assets. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities and the exclusion of as-of trades, if any, and the use of different classifications of securities for presentation purposes. Weightings will vary over time.

Among those holdings that performed well for the fund, what were some of the highlights?

German automaker Porsche was among the ten largest holdings in the fund, and it was the top contributor to performance. Demand for Porsche’s high-end vehicles has been strong, supporting prices and margins, and demand from consumers in the emerging markets, in particular, bolstered the company’s solid results. In addition, the company continues to be involved in a merger with Volkswagen, and as the likelihood of that event has increased, Porsche’s stock price has benefited.

A company we discussed at the fund’s semiannual period-end, Kabel Deutschland, contributed significantly to performance for the year overall, and it remained an overweight position relative to the benchmark through the end of the annual period. Of crucial importance for this company, which is Germany’s leading cable TV operator, is that it has the infrastructure to give its customers more premium offerings relative to Deutsche Telecom, its primary competitor. As Kabel promotes its “triple-play” services, bundling cable TV with broadband Internet and voice services, it has done a good job of selling consumers on higher-speed, higher-priced products. We continue to believe the company has good growth opportunities going forward.

Fiat, the Italian auto manufacturer, also had strong performance over the year. The successful breakup of the group into Fiat Auto and Fiat Industrial uncovered significant value in each component company. In addition, Fiat Auto’s margins increased, and

This table shows the fund’s top 10 holdings by percentage of the fund’s net assets as of 6/30/11. Short-term holdings are excluded. Holdings will vary over time.

it took a greater stake in Chrysler, all of which supported share price appreciation. We sold the stock by the end of the period.

Which strategies or holdings had a negative impact on results?

While the portfolio held a number of energy stocks and was overweight energy overall versus the benchmark, we avoided holding the stock of Royal Dutch Petroleum, a benchmark component that performed well during the period. Royal Dutch outperformed as the company delivered better production growth relative to many of its peers and was seen as a relatively safe way to invest in the energy markets amid volatile conditions.

We held an overweight position in Fujitsu relative to its benchmark weight at the time of the earthquake and tsunami in Japan. This software services company sold off aggressively on fears of a decline in domestic demand following the events in Japan. We took a similar view and sold the stock into its downward swing.

The stock of Pandora, a Danish jewelry company, suffered on concerns that the rising price of silver would squeeze the company’s gross margins and in the wake of a lower-than-expected growth report. We believe that the company’s growth prospects remain quite healthy. Pandora has taken steps to hedge its silver exposure, may expand into new geographies, and retains the ability to diversify its jewelry product line, all of which could potentially extend its reach across its consumer base.

How did the fund use derivatives during the period?

We used currency forwards to hedge portions of our foreign currency exposures. Currency forwards allow us to pursue strategies that can help protect the fund from adverse movements in exchange rates.

This chart shows the fund’s largest allocation shifts, by percentage, over the past six months. Weightings are shown as a percentage of net assets. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities and the exclusion of as-of trades, if any, and the use of different classifications of securities for presentation purposes. Holdings will vary over time.

Amid the substantial risks you noted earlier, what is your outlook for international markets and the fund?

My colleagues and I expect several factors have the potential to drive positive market development, including a continued recovery in corporate earnings; attractive valuations — especially relative to historically low bond yields; a pickup in corporate investment; progress on rebuilding bank equity ratios; concrete signs of fiscal restructuring; and the continuation of highly accommodative monetary policy.

While we expect to see further bouts of volatility, we are confident in our approach of identifying attractive opportunities on a stock-by-stock basis with a strong emphasis on valuation. We expect that restructuring and consolidation will continue to be an important driver of returns as companies continue to rationalize in the face of increased global competition and still-tough global economic conditions. We continue to favor companies with strong market positions and limited refinancing risk that are able to exhibit sustainable secular growth in today’s challenging environment.

Thank you, Sam, for bringing us up to date.

The views expressed in this report are exclusively those of Putnam Management, and are subject to change. They are not meant as investment advice.

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk.

Portfolio Manager Simon Davis is Co-Head of International Equities at Putnam. He has a B.A. from Oxford University. Simon joined Putnam in 2000 and has been in the investment industry since 1988.

IN THE NEWS

Europe’s long-standing sovereign debt crisis entered a critical phase in recent weeks, with a fiscal reckoning in Greece and evidence that the contagion may be spreading to several peripheral eurozone nations. In June, Greece, under pressure from the European Union and the International Monetary Fund, adopted deep budget and spending cuts to prevent default on its massive national debt. Italy, meanwhile, teetered on the edge of the debt crisis, forcing government leaders to move quickly to pass deficit-reducing measures. In July, bond yields on government debt in Spain also hit their highest level in 14 years, with rising concerns of the debt contagion spreading to that country. In Ireland, Moody’s Investors Service downgraded the nation’s foreign and local-currency government bond ratings to “junk” status after speculation that a second EU/IMF bailout may be needed. Ireland became the third European country — after Greece and Portugal — to receive Moody’s downgrade to “below investment grade.”

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended June 30, 2011, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee 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 information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class R and class Y shares are not available to all investors. See the Terms and Definitions section in this report for definitions of the share classes offered by your fund.

Fund performance Total return for periods ended 6/30/11


	Class A		Class B		Class C		Class M		Class R	Class Y
(inception dates)	(2/28/91)		(6/1/94)		(7/26/99)		(12/1/94)		(1/21/03)	(7/12/96)

	Before	After					Before	After	Net	Net
	sales	sales	Before	After	Before	After	sales	sales	asset	asset
	charge	charge	CDSC	CDSC	CDSC	CDSC	charge	charge	value	value

Annual average
(life of fund)	7.99%	7.68%	7.16%	7.16%	7.19%	7.19%	7.45%	7.26%	7.73%	8.20%

10 years	43.38	35.11	32.92	32.92	33.13	33.13	36.38	31.62	39.92	47.10
Annual average	3.67	3.05	2.89	2.89	2.90	2.90	3.15	2.79	3.42	3.93

5 years	0.14	-5.63	-3.60	-5.04	–3.52	–3.52	–2.30	–5.73	–1.10	1.43
Annual average	0.03	-1.15	-0.73	-1.03	–0.71	–0.71	–0.46	–1.17	–0.22	0.28

3 years	-11.41	-16.51	-13.43	-15.96	–13.35	–13.35	–12.68	–15.75	–12.08	–10.74
Annual average	-3.96	-5.84	-4.69	-5.63	–4.66	–4.66	–4.42	–5.55	–4.20	–3.72

1 year	35.21	27.47	34.20	29.20	34.29	33.29	34.65	29.92	34.90	35.55

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A and M shares reflect the deduction of the maximum 5.75% and 3.50% sales charge, respectively, levied at the time of purchase. Class B share returns after CDSC reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class R and Y shares have no initial sales charge or CDSC. Performance for class B, C, M, R, and Y shares before their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares, except for class Y shares, for which 12b-1 fees are not applicable.

For a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Class B share performance does not reflect conversion to class A shares.

Comparative index returns For periods ended 6/30/11


		Lipper International Large-Cap
	MSCI EAFE Index (ND)	Core Funds category average*

Annual average (life of fund)	5.31%	6.67%

10 years	73.44	61.74
Annual average	5.66	4.80

5 years	7.60	7.02
Annual average	1.48	1.29

3 years	–5.22	–6.77
Annual average	–1.77	–2.39

1 year	30.36	30.89

Index and Lipper results should be compared with fund performance before sales charge, before CDSC, or at net asset value.

* Over the 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 6/30/11, there were 393, 353, 297, 182, and 14 funds, respectively, in this Lipper category.

Past performance does not indicate future results. At the end of the same time period, a $10,000 investment in the fund’s class B and class C shares would have been valued at $13,292 and $13,313, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class M shares ($9,650 after sales charge) would have been valued at $13,162. A $10,000 investment in the fund’s class R and class Y shares would have been valued at $13,992 and $14,710, respectively.

Fund price and distribution information For the 12-month period ended 6/30/11


Distributions	Class A		Class B	Class C	Class M		Class R	Class Y

Number	1		1	1	1		1	1

Income	$0.409		$0.214	$0.261	$0.311		$0.372	$0.460

Capital gains	—		—	—	—		—	—

Total	$0.409		$0.214	$0.261	$0.311		$0.372	$0.460

	Before	After	Net	Net	Before	After	Net	Net
	sales	sales	asset	asset	sales	sales	asset	asset
Share value	charge	charge	value	value	charge	charge	value	value

6/30/10	$15.80	$16.76	$14.96	$15.27	$15.38	$15.94	$15.57	$16.00

6/30/11	20.93	22.21	19.85	20.23	20.38	21.12	20.61	21.20

The classification of distributions, if any, is an estimate. Before-sales-charge share value for class A and M shares does not take into account any sales charge levied at the time of purchase. After-sales-charge share value is calculated assuming that the maximum sales charge (5.75% for class A shares and 3.50% for class M shares) was levied at the time of purchase.

Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.

Expense ratios


	Class A	Class B	Class C	Class M	Class R	Class Y

Total annual operating expenses for the fiscal year
ended 6/30/10*	1.40%	2.15%	2.15%	1.90%	1.65%	1.15%

Annualized expense ratio for the six-month period
ended 6/30/11†‡	1.38%	2.13%	2.13%	1.88%	1.63%	1.13%

Fiscal-year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report. Expenses are shown as a percentage of average net assets.

* Restated to reflect projected expenses under a management contract effective 1/1/10.

† For the fund’s most recent fiscal half year; may differ from expense ratios based on one-year data in the financial highlights.

‡ Includes an increase of 0.05% in annualized performance fees for the six months ended 6/30/11.

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in the fund from January 1, 2011, to June 30, 2011. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.


	Class A	Class B	Class C	Class M	Class R	Class Y

Expenses paid per $1,000*†	$7.00	$10.78	$10.78	$9.52	$8.26	$5.73

Ending value (after expenses)	$1,044.40	$1,040.90	$1,041.20	$1,042.50	$1,043.60	$1,045.90

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 6/30/11. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended June 30, 2011, use the following calculation method. To find the value of your investment on January 1, 2011, call Putnam at 1-800-225-1581.

Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the following table shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.


	Class A	Class B	Class C	Class M	Class R	Class Y

Expenses paid per $1,000*†	$6.90	$10.64	$10.64	$9.39	$8.15	$5.66

Ending value (after expenses)	$1,017.95	$1,014.23	$1,014.23	$1,015.47	$1,016.71	$1,019.19

Terms and definitions

Important terms

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.

Before sales charge, or net asset value, is the price, or value, of one share of a mutual fund, without a sales charge. Before-sales-charge figures fluctuate with market conditions, and are calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class.

After sales charge is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. After-sales-charge 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 generally 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 over time 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.

Share classes

Class A shares are generally subject to an initial sales charge and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class B shares are not subject to an initial sales charge. They may be subject to a CDSC.

Class C shares are not subject to an initial sales charge and are subject to a CDSC 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 CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class R shares are not subject to an initial sales charge or CDSC and are available only to certain defined contribution plans.

Class Y shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are generally only available to corporate and institutional clients and clients in other approved programs.

Comparative indexes

Barclays Capital U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.

BofA (Bank of America) Merrill Lynch U.S. 3-Month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.

MSCI EAFE Index (ND) is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

S&P 500 Index is an unmanaged index of common stock performance.

Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.

Lipper is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.

Trustee approval of management contract

General conclusions

The Board of Trustees of the Putnam funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Investment Management (“Putnam Management”), the sub-management contract with respect to your fund between Putnam Management and its affiliate, Putnam Investments Limited (“PIL”), and the sub-advisory contract among Putnam Management, PIL, and another affiliate, Putnam Advisory Company (“PAC”).

The Board of Trustees, with the assistance of its Contract Committee which consists solely of Trustees who are not “interested persons” (as this term is defined in the Investment Company Act of 1940, as amended) of the Putnam funds (“Independent Trustees”), requests and evaluates all information it deems reasonably necessary under the circumstances in connection with its annual contract review. Over the course of several months ending in June 2011, the Contract Committee met on a number of occasions with representatives of Putnam Management, and separately in executive session, to consider the information that Putnam Management provided and other information developed with the assistance of the Board’s independent counsel and independent staff. The Contract Committee reviewed and discussed key aspects of this information with all of the Independent Trustees on a number of occasions. At the Trustees’ June 17, 2011 meeting, the Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management, sub-management and sub-advisory contracts, effective July 1, 2011. (Because PIL and PAC are affiliates of Putnam Management and Putnam Management remains fully responsible for all services provided by PIL and PAC, the Trustees have not evaluated PIL or PAC as separate entities, and all subsequent references to Putnam Management below should be deemed to include reference to PIL and PAC as necessary or appropriate in the context.)

The Independent Trustees’ approval was based on the following conclusions:

• That the fee schedule in effect for your fund represented reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds, and the costs incurred by Putnam Management in providing services, and

• That the fee schedule represented an appropriate sharing between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the fund at current asset levels.

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the management arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that some aspects of the arrangements may receive greater scrutiny in some years than others, and that the Trustees’ conclusions may be based, in part, on their consideration of fee arrangements in previous years.

Management fee schedules and total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints. In reviewing management fees, the Trustees generally focus their attention on material changes in circumstances — for example, changes in assets under management or investment style, changes in Putnam Management’s operating costs, or changes in competitive practices in the mutual fund industry — that suggest that consideration of fee changes might be warranted. The Trustees concluded that the circumstances did not warrant changes to the management fee structure of your fund.

Most of the open-end Putnam funds have new management contracts, with new fee schedules reflecting the implementation of more competitive fee levels for many funds, complex-wide breakpoints for the open-end funds, and performance fees for some funds. These new management contracts have been in effect for a little over a year — since January or, for a few funds, February, 2010. The Trustees approved the new management contracts on July 10, 2009, and fund shareholders subsequently approved the contracts by overwhelming majorities of the shares voted.

Because these management contracts had been implemented only recently, the Contract Committee had limited practical experience with the operation of the new fee structures. Under its new management contract, your fund has the benefit of breakpoints in its management fee that provide shareholders with significant economies of scale in the form of reduced fee levels as assets under management in the Putnam family of funds increase. In addition, your fund’s new management contract provides that its management fees will be adjusted up or down depending upon whether your fund’s performance is better or worse than the performance of an appropriate index of securities prices specified in the management contract. To ensure that the performance comparison was being made over a reasonable period of time, your fund did not begin accruing performance adjustments until January 2011, by which time there was a twelve month period under the new management contract based on which to determine performance adjustments. The Contract Committee observed that the complex-wide breakpoints of the open-end funds and your fund’s performance fee had only been in place for a short while, and the Trustees will examine the operation of this new breakpoint structure and performance fee in future years in light of further experience.

As in the past, the Trustees also focused on the competitiveness of each fund’s total expense ratio. In order to ensure that expenses of the Putnam funds continue to meet evolving competitive standards, the Trustees and Putnam Management agreed in 2009 to implement certain expense limitations. These expense limitations serve in particular to maintain competitive expense levels for funds with large numbers of small shareholder accounts and funds with relatively small net assets. Most funds had sufficiently low expenses that these expense limitations did not apply. However, in the case of your fund, the first of the expense limitations applied during its fiscal year ending in 2010. The expense limitations were: (i) a contractual expense limitation applicable to all retail open-end funds of 37.5 basis points on investor servicing fees and expenses and (ii) a contractual expense limitation applicable to all open-end funds of 20 basis points on so-called “other expenses” (i.e., all expenses exclusive of management fees, investor servicing fees, distribution fees, investment-related expenses, interest, taxes, brokerage commissions and extraordinary expenses). Putnam Management’s support for these expense limitations was an important factor in the Trustees’

decision to approve the continuance of your fund’s management, sub-management and sub-advisory contracts.

The Trustees reviewed comparative fee and expense information for a custom group of competitive funds selected by Lipper Inc. This comparative information included your fund’s percentile ranking for effective management fees and total expenses (excluding any applicable 12b-1 fee), which provides a general indication of your fund’s relative standing. In the custom peer group, your fund ranked in the 2nd quintile in effective management fees (determined for your fund and the other funds in the custom peer group based on fund asset size and the applicable contractual management fee schedule) and in the 3rd quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2010 (the first quintile representing the least expensive funds and the fifth quintile the most expensive funds). The fee and expense data reported by Lipper as of December 31, 2010, reflected the most recent fiscal year-end data available in Lipper’s database at that time.

In connection with their review of the management fees and total expenses of the Putnam funds, the Trustees also reviewed the costs of the services provided and the profits realized by Putnam Management and its affiliates from their contractual relationships with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management, investor servicing and distribution services provided to the funds. In this regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability, allocated on a fund-by-fund basis, with respect to the funds’ management, distribution, and investor servicing contracts. For each fund, the analysis presented information about revenues, expenses and profitability for each of the agreements separately and for the agreements taken together on a combined basis. The Trustees concluded that, at current asset levels, the fee schedules in place represented reasonable compensation for the services being provided and represented an appropriate sharing of such economies of scale as may exist in the management of the funds at that time.

The information examined by the Trustees as part of their annual contract review for the Putnam funds has included for many years information regarding fees charged by Putnam Management and its affiliates to institutional clients such as defined benefit pension plans, college endowments, and the like. This information included comparisons of those fees with fees charged to the funds, as well as an assessment of the differences in the services provided to these different types of clients. The Trustees observed that the differences in fee rates between institutional clients and mutual funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients may reflect historical competitive forces operating in separate markets. The Trustees considered the fact that in many cases fee rates across different asset classes are higher on average for mutual funds than for institutional clients, as well as the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to its institutional clients. The Trustees did not rely on these comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees’ evaluation of the quality of services provided by Putnam Management under your fund’s management contract. The Trustees were assisted in their review of

the Putnam funds’ investment process and performance by the work of several investment oversight committees of the Trustees, which met on a regular basis with the funds’ portfolio teams and with the Chief Investment Officer and other members of Putnam Management’s Investment Division throughout the year. The Trustees concluded that Putnam Management generally provides a high-quality investment process — based on the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to them, and in general Putnam Management’s ability to attract and retain high-quality personnel — but also recognized that this does not guarantee favorable investment results for every fund in every time period. The Trustees considered the investment performance of each fund over multiple time periods and considered information comparing each fund’s performance with various benchmarks and with the performance of competitive funds.

The Committee noted the substantial improvement in the performance of most Putnam funds during the 2009 – 2010 period and Putnam Management’s ongoing efforts to strengthen its investment personnel and processes. The Committee also noted the disappointing investment performance of some funds for periods ended December 31, 2010 and considered information provided by Putnam Management regarding the factors contributing to the underperformance and actions being taken to improve the performance of these particular funds. The Trustees indicated their intention to continue to monitor performance trends to assess the effectiveness of these efforts and to evaluate whether additional actions to address areas of underperformance are warranted.

In the case of your fund, the Trustees considered that its class A share cumulative total return performance at net asset value was in the following quartiles of its Lipper Inc. peer group (Lipper International Large-Cap Core Funds) for the one-year, three-year and five-year periods ended December 31, 2010 (the first quartile representing the best-performing funds and the fourth quartile the worst-performing funds):


One-year period	1st

Three-year period	3rd

Five-year period	3rd

Over the one-year, three-year and five-year periods ended December 31, 2010, there were 384, 320 and 252 funds, respectively, in your fund’s Lipper peer group. (When considering performance information, shareholders should be mindful that past performance is not a guarantee of future results.)

Brokerage and soft-dollar allocations; investor servicing

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage allocation and the use of soft dollars, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that are expected to be useful to Putnam Management in managing the assets of the fund and of other clients. Subject to policies established by the Trustees, soft-dollar credits acquired through these means are used primarily to supplement Putnam Management’s internal research efforts. However, the Trustees noted that a portion of available soft-dollar credits continues to be allocated to the payment of fund expenses. The Trustees indicated their continued intent to monitor regulatory developments in this area with the assistance of their Brokerage Committee and also indicated their continued intent to monitor the potential benefits associated with fund brokerage and soft-dollar allocations and trends in industry

Other information for shareholders

Important notice regarding Putnam’s privacy policy

In order to conduct business with our shareholders, we must obtain certain personal information such as account holders’ names, addresses, Social Security numbers, and dates of birth. Using this information, we are able to maintain accurate records of accounts and transactions.

It is our policy to protect the confidentiality of our shareholder information, whether or not a shareholder currently owns shares of our funds. In particular, it is our policy not to sell information about you or your accounts to outside marketing firms. We have safeguards in place designed to prevent unauthorized access to our computer systems and procedures to protect personal information from unauthorized use.

Under certain circumstances, we must share account information with outside vendors who provide services to us, such as mailings and proxy solicitations. In these cases, the service providers enter into confidentiality agreements with us, and we provide only the information necessary to process transactions and perform other services related to your account. Finally, it is our policy to share account information with your financial representative, if you’ve listed one on your Putnam account.

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2011, are available in the Individual Investors section at putnam.com, and on the SEC’s website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain the fund’s Forms N-Q on the SEC’s website at www.sec.gov. In addition, the fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s website or the operation of the Public Reference Room.

Trustee and employee fund ownership

Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam mutual funds. As of June 30, 2011, Putnam employees had approximately $371,000,000 and the Trustees had approximately $70,000,000 invested in Putnam mutual funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.

Financial statements

These sections of the report, as well as the accompanying Notes, preceded by the Report of Independent Registered Public Accounting Firm, 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 non-investment 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 liquidation preference of 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 year.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, 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 highlights table also includes the current reporting period.

Report of Independent Registered Public Accounting Firm

To the Trustees and Shareholders of
Putnam International Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Putnam International Equity Fund (the “fund”) at June 30, 2011, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments owned at June 30, 2011 by correspondence with the custodian, brokers, and transfer agent provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
August 11, 2011

The fund’s portfolio 6/30/11


COMMON STOCKS (99.6%)*	Shares	Value

Australia (2.0%)
Macquarie Group, Ltd.	385,580	$12,989,446

Telstra Corp., Ltd.	4,977,229	15,462,596

		28,452,042
Belgium (1.9%)
Anheuser-Busch InBev NV	461,363	26,795,972

		26,795,972
Brazil (0.4%)
Rossi Residencial SA	624,400	5,104,163

		5,104,163
Canada (1.8%)
Agrium, Inc.	122,160	10,737,098

Canadian Natural Resources, Ltd.	331,600	13,913,744

		24,650,842
China (7.0%)
China Construction Bank Corp.	15,409,000	12,824,775

China Mobile, Ltd.	805,500	7,494,891

China National Materials Co., Ltd.	8,124,000	6,676,724

China Power New Energy Development Co., Ltd. †	38,392,000	2,580,172

China Resources Power Holdings Co., Ltd.	3,624,000	7,082,472

China Shanshui Cement Group, Ltd.	7,222,000	8,394,255

China WindPower Group, Ltd. †	69,160,000	6,056,948

Industrial and Commercial Bank of China, Ltd. †	21,587,000	16,528,385

PCD Stores Group, Ltd.	25,184,000	5,879,911

Perfect World Co., Ltd. ADR †	188,700	3,540,012

Ping An Insurance (Group) Co. of China, Ltd.	1,366,500	14,249,959

Zhongpin, Inc. † ^S	609,400	6,386,512

		97,695,016
Denmark (0.6%)
Pandora A/S ^S	277,567	8,731,801

		8,731,801
Finland (0.6%)
Fortum OYJ	294,541	8,540,643

		8,540,643
France (14.6%)
Arkema	123,563	12,736,567

AXA SA	770,949	17,541,285

BNP Paribas SA	349,473	27,010,763

Christian Dior SA	187,954	29,610,659

Sanofi	533,872	42,976,113

Societe Generale SA	181,284	10,771,145

Technip SA	151,722	16,286,810

Total SA	614,475	35,581,654

Vinci SA	196,472	12,600,705

		205,115,701
Germany (14.6%)
Allianz SE	145,244	20,315,454

BASF SE	262,356	25,740,186

Bayerische Motoren Werke (BMW) AG	164,874	16,472,916

Biotest AG (Preference)	78,319	5,672,315

Deutsche Post AG	1,463,909	28,164,155


COMMON STOCKS (99.6%)* cont.	Shares	Value

Germany cont.
Henkel AG & Co. KGaA	231,431	$16,086,136

Kabel Deutschland Holding AG †	252,342	15,535,390

MTU Aero Engines Holding AG	250,537	20,036,994

Porsche Automobil Holding SE (Preference)	407,407	32,358,068

Siemens AG	174,580	24,005,526

		204,387,140
Hong Kong (0.8%)
Henderson Land Development Co., Ltd.	1,633,000	10,565,259

Longtop Financial Technologies Ltd. ADR † ^{F S}	289,000	867,000

		11,432,259
Ireland (2.3%)
Kerry Group PLC Class A	318,358	13,181,229

WPP PLC	1,495,638	18,744,891

		31,926,120
Israel (0.8%)
Teva Pharmaceutical Industries, Ltd. ADR	224,000	10,801,280

		10,801,280
Japan (18.5%)
Aisin Seiki Co., Ltd.	374,100	14,492,296

Electric Power Development Co.	396,300	10,708,606

Inpex Corp., Inc.	2,223	16,418,947

Japan Tobacco, Inc.	3,660	14,130,922

Kyocera Corp.	103,900	10,574,184

Lawson, Inc.	159,900	8,401,623

Mitsubishi Electric Corp.	1,411,000	16,394,004

Mitsubishi Tanabe Pharma	599,100	10,056,207

Mitsubishi UFJ Financial Group, Inc.	3,137,700	15,281,826

Mitsui & Co., Ltd.	1,420,400	24,573,799

Nippon Telegraph & Telephone (NTT) Corp.	296,700	14,433,446

Nissan Motor Co., Ltd.	2,366,400	24,851,539

NTT DoCoMo, Inc.	9,404	16,783,497

ORIX Corp.	311,850	30,349,941

Sumitomo Heavy Industries, Ltd.	2,147,000	14,966,869

Toyo Suisan Kaisha, Ltd.	747,000	17,663,398

		260,081,104
Malaysia (0.6%)
AirAsia BHD †	6,934,100	8,090,047

		8,090,047
Netherlands (1.4%)
ING Groep NV GDR †	1,562,174	19,255,407

		19,255,407
Russia (3.4%)
Gazprom OAO ADR	436,884	6,369,769

Mobile Telesystems ADR	363,700	6,917,574

Sberbank OJSC	5,409,269	19,906,110

Synergy Co. †	213,913	7,293,492

Uralkali GDR	150,522	6,773,490

		47,260,435


COMMON STOCKS (99.6%)* cont.	Shares	Value

South Korea (2.2%)
LG Display Co., Ltd.	321,560	$8,947,182

Samsung Electronics Co., Ltd.	9,525	7,403,203

Shinhan Financial Group Co., Ltd.	293,380	14,013,464

		30,363,849
Spain (1.9%)
Banco Santander Central Hispano SA	1,683,694	19,467,341

Grifols SA	387,702	7,791,138

		27,258,479
Sweden (1.7%)
Telefonaktiebolaget LM Ericsson AB Class B	850,039	12,276,973

Volvo AB Class B	631,737	11,054,935

		23,331,908
Switzerland (2.0%)
Syngenta AG †	50,335	17,000,979

Wolseley PLC	319,095	10,418,508

		27,419,487
Taiwan (1.7%)
Hon Hai Precision Industry Co., Ltd.	2,462,000	8,492,443

Taiwan Semiconductor Manufacturing Co., Ltd.	2,950,000	7,466,674

Unimicron Technology Corp.	4,226,000	7,558,738

		23,517,855
United Kingdom (16.5%)
Barclays PLC	3,517,591	14,494,721

BG Group PLC	1,230,674	27,961,100

British American Tobacco (BAT) PLC	470,233	20,634,627

Centrica PLC	2,659,047	13,813,176

Compass Group PLC	1,128,637	10,899,098

Kingfisher PLC	2,900,964	12,454,910

Reckitt Benckiser Group PLC	456,702	25,243,709

Rio Tinto PLC	582,382	42,020,814

Schroders PLC	376,011	9,346,579

Tullow Oil PLC	510,141	10,164,212

Vedanta Resources PLC	339,218	11,413,462

WM Morrison Supermarkets PLC	2,197,793	10,513,019

Xstrata PLC	1,037,205	22,857,158

		231,816,585
United States (2.3%)
ACE, Ltd.	181,200	11,926,584

First Solar, Inc. † ^S	51,800	6,851,586

Tyco International, Ltd.	281,118	13,895,665

		32,673,835

Total common stocks (cost $1,199,855,773)		$1,394,701,970


SHORT-TERM INVESTMENTS (2.1%)*	Principal amount/shares	Value

Putnam Cash Collateral Pool, LLC 0.17% ^d	22,909,347	$22,909,347

Putnam Money Market Liquidity Fund 0.04% ^e	4,615,273	4,615,273

U.S. Treasury Bills, for an effective yield of 0.10%,
February 9, 2012 ##	$112,000	111,927

U.S. Treasury Bills, for an effective yield of 0.08%,
January 12, 2012 ##	181,000	180,919

U.S. Treasury Bills, for effective yields ranging from
0.09% to 0.16%, November 17, 2011 ##	1,248,000	1,247,343

U.S. Treasury Bills, for effective yields ranging from
0.20% to 0.21%, October 20, 2011 ##	146,000	145,907

Total short-term investments (cost $29,210,716)		$29,210,716


TOTAL INVESTMENTS

Total investments (cost $1,229,066,489)		$1,423,912,686


Key to holding’s abbreviations

ADR	American Depository Receipts
GDR	Global Depository Receipts
OAO	Open Joint Stock Company
OJSC	Open Joint Stock Company

Notes to the fund’s portfolio

Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from July 1, 2010 through June 30, 2011 (the reporting period).

* Percentages indicated are based on net assets of $1,400,822,773.

† Non-income-producing security.

## This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivatives contracts at the close of the reporting period.

^dSee Note 1 to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

^eSee Note 6 to the financial statements regarding investments in Putnam Money Market Liquidity Fund. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

^FIs valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) based on the securities’ valuation inputs. At the close of the reporting period, fair value pricing was also used for certain foreign securities in the portfolio (Note 1).

^SSecurity on loan, in part or in entirety, at the close of the reporting period.

At the close of the reporting period, the fund maintained liquid assets totaling $1,704,901 to cover certain derivatives contracts.

ADR or GDR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank.

The fund had the following industry concentration greater than 10% at the close of the reporting period (as a percentage of net assets):


Commercial banks	10.7%

FORWARD CURRENCY CONTRACTS at 6/30/11 (aggregate face value $1,539,160,994)


						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)

Bank of America, N.A.

	Australian Dollar	Buy	8/17/11	$3,061,921	$2,985,672	$76,249

	Australian Dollar	Buy	7/21/11	5,392,248	5,358,320	33,928

	Australian Dollar	Sell	7/21/11	5,392,248	5,261,528	(130,720)

	British Pound	Buy	8/17/11	7,449,056	7,410,076	38,980

	British Pound	Buy	7/21/11	7,451,520	7,603,265	(151,745)

	British Pound	Sell	7/21/11	7,451,520	7,412,163	(39,357)

	Canadian Dollar	Buy	8/17/11	4,090,578	3,995,443	95,135

	Canadian Dollar	Buy	7/21/11	8,626,335	8,502,684	123,651

	Canadian Dollar	Sell	7/21/11	8,626,335	8,479,576	(146,759)

	Euro	Sell	8/17/11	12,154,009	11,915,714	(238,295)

	Euro	Buy	7/21/11	20,750,314	20,434,856	315,458

	Euro	Sell	7/21/11	20,750,314	20,615,826	(134,488)

	Norwegian Krone	Sell	8/17/11	2,859,601	2,816,843	(42,758)

	Norwegian Krone	Buy	7/21/11	2,864,484	2,822,252	42,232

	Norwegian Krone	Sell	7/21/11	2,864,484	2,861,135	(3,349)

	Swedish Krona	Buy	8/17/11	3,544,527	3,474,343	70,184

	Swedish Krona	Buy	7/21/11	3,550,099	3,602,241	(52,142)

	Swedish Krona	Sell	7/21/11	3,550,099	3,478,760	(71,339)

	Swiss Franc	Buy	8/17/11	16,922,477	16,989,775	(67,298)

	Swiss Franc	Buy	7/21/11	16,919,753	16,889,554	30,199

	Swiss Franc	Sell	7/21/11	16,919,753	16,983,990	64,237

Barclays Bank PLC

	British Pound	Buy	8/17/11	4,984,238	4,955,673	28,565

	British Pound	Buy	7/21/11	4,985,887	5,088,197	(102,310)

	British Pound	Sell	7/21/11	4,985,887	4,957,070	(28,817)

	Canadian Dollar	Buy	8/17/11	8,848,077	8,641,509	206,568

	Canadian Dollar	Buy	7/21/11	8,854,048	8,757,131	96,917

	Canadian Dollar	Sell	7/21/11	8,854,048	8,647,112	(206,936)

	Euro	Sell	8/17/11	24,508,878	24,038,302	(470,576)

	Euro	Buy	7/21/11	24,527,465	24,056,723	470,742

	Euro	Sell	7/21/11	24,527,465	24,384,746	(142,719)

	Hong Kong Dollar	Sell	8/17/11	573,838	573,563	(275)

	Hong Kong Dollar	Buy	7/21/11	573,744	573,475	269

	Hong Kong Dollar	Sell	7/21/11	573,744	574,094	350

	Japanese Yen	Buy	8/17/11	363,500	361,543	1,957

	Japanese Yen	Buy	7/21/11	10,489,409	10,525,576	(36,167)

	Japanese Yen	Sell	7/21/11	10,489,409	10,432,849	(56,560)

	Norwegian Krone	Buy	8/17/11	9,574,579	9,430,209	144,370

	Norwegian Krone	Buy	7/21/11	9,590,929	9,585,224	5,705

	Norwegian Krone	Sell	7/21/11	9,590,929	9,444,863	(146,066)

	Singapore Dollar	Buy	8/17/11	7,306,356	7,302,577	3,779

	Singapore Dollar	Buy	7/21/11	7,306,209	7,305,076	1,133

	Singapore Dollar	Sell	7/21/11	7,306,209	7,302,280	(3,929)

	Swedish Krona	Buy	8/17/11	935,466	916,163	19,303

FORWARD CURRENCY CONTRACTS at 6/30/11 (aggregate face value $1,539,160,994) cont.


						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)

Barclays Bank PLC cont.

	Swedish Krona	Buy	7/21/11	$936,936	$950,942	$(14,006)

	Swedish Krona	Sell	7/21/11	936,936	917,397	(19,539)

	Swiss Franc	Buy	8/17/11	10,102,822	10,143,666	(40,844)

	Swiss Franc	Buy	7/21/11	10,101,196	10,087,002	14,194

	Swiss Franc	Sell	7/21/11	10,101,196	10,140,758	39,562

Citibank, N.A.

	Australian Dollar	Buy	8/17/11	3,283,793	3,201,557	82,236

	Australian Dollar	Buy	7/21/11	5,614,881	5,581,964	32,917

	Australian Dollar	Sell	7/21/11	5,614,881	5,477,841	(137,040)

	British Pound	Buy	8/17/11	2,891,520	2,877,019	14,501

	British Pound	Buy	7/21/11	2,892,476	2,951,614	(59,138)

	British Pound	Sell	7/21/11	2,892,476	2,877,739	(14,737)

	Danish Krone	Buy	7/21/11	6,636,276	6,679,679	(43,403)

	Euro	Sell	8/17/11	14,030,784	13,763,035	(267,749)

	Euro	Buy	7/21/11	14,041,425	13,773,870	267,555

	Euro	Sell	7/21/11	14,041,425	13,958,560	(82,865)

	Hong Kong Dollar	Sell	8/17/11	262,363	262,200	(163)

	Hong Kong Dollar	Buy	7/21/11	4,953,179	4,951,628	1,551

	Hong Kong Dollar	Sell	7/21/11	4,953,179	4,956,017	2,838

	Norwegian Krone	Sell	8/17/11	1,051,337	1,035,929	(15,408)

	Norwegian Krone	Buy	7/21/11	1,053,132	1,037,928	15,204

	Norwegian Krone	Sell	7/21/11	1,053,132	1,052,320	(812)

	Singapore Dollar	Buy	8/17/11	11,244	11,238	6

	Singapore Dollar	Buy	7/21/11	11,244	11,242	2

	Singapore Dollar	Sell	7/21/11	11,244	11,237	(7)

	Swedish Krona	Sell	8/17/11	2,673,481	2,622,461	(51,020)

	Swedish Krona	Buy	7/21/11	12,941,960	13,044,417	(102,457)

	Swedish Krona	Sell	7/21/11	12,941,960	12,911,720	(30,240)

	Swiss Franc	Buy	8/17/11	8,195,657	8,229,774	(34,117)

	Swiss Franc	Buy	7/21/11	8,194,338	8,183,893	10,445

	Swiss Franc	Sell	7/21/11	8,194,338	8,226,431	32,093

Credit Suisse AG

	Australian Dollar	Buy	8/17/11	4,200,949	4,092,321	108,628

	Australian Dollar	Buy	7/21/11	4,215,364	4,191,085	24,279

	Australian Dollar	Sell	7/21/11	4,215,364	4,105,665	(109,699)

	British Pound	Sell	8/17/11	3,124,222	3,107,913	(16,309)

	British Pound	Buy	7/21/11	9,597,303	9,712,695	(115,392)

	British Pound	Sell	7/21/11	9,597,303	9,777,421	180,118

	Canadian Dollar	Buy	8/17/11	838,705	818,379	20,326

	Canadian Dollar	Buy	7/21/11	839,271	830,229	9,042

	Canadian Dollar	Sell	7/21/11	839,271	818,826	(20,445)

	Euro	Sell	8/17/11	9,388,517	9,211,363	(177,154)

	Euro	Buy	7/21/11	9,395,637	9,218,549	177,088

	Euro	Sell	7/21/11	9,395,637	9,339,478	(56,159)

FORWARD CURRENCY CONTRACTS at 6/30/11 (aggregate face value $1,539,160,994) cont.


						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)

Credit Suisse AG cont.

	Japanese Yen	Sell	8/17/11	$4,360,957	$4,340,106	$(20,851)

	Japanese Yen	Buy	7/21/11	12,702,662	12,640,656	62,006

	Japanese Yen	Sell	7/21/11	12,702,672	12,663,179	(39,493)

	Norwegian Krone	Buy	8/17/11	1,548,752	1,525,929	22,823

	Norwegian Krone	Buy	7/21/11	1,551,397	1,550,230	1,167

	Norwegian Krone	Sell	7/21/11	1,551,397	1,528,328	(23,069)

	Swedish Krona	Buy	8/17/11	4,949,463	4,850,334	99,129

	Swedish Krona	Buy	7/21/11	4,957,244	5,032,154	(74,910)

	Swedish Krona	Sell	7/21/11	4,957,244	4,856,875	(100,369)

	Swiss Franc	Buy	8/17/11	8,778,365	8,807,802	(29,437)

	Swiss Franc	Buy	7/21/11	8,776,952	8,761,079	15,873

	Swiss Franc	Sell	7/21/11	8,776,952	8,805,015	28,063

Deutsche Bank AG

	Australian Dollar	Buy	8/17/11	978,948	951,726	27,222

	Australian Dollar	Buy	7/21/11	982,307	976,466	5,841

	Australian Dollar	Sell	7/21/11	982,307	954,909	(27,398)

	Euro	Sell	8/17/11	8,051,092	7,898,397	(152,695)

	Euro	Buy	7/21/11	8,057,198	7,904,226	152,972

	Euro	Sell	7/21/11	8,057,198	8,008,983	(48,215)

	Swedish Krona	Buy	8/17/11	2,939,171	2,880,616	58,555

	Swedish Krona	Buy	7/21/11	2,943,791	2,987,220	(43,429)

	Swedish Krona	Sell	7/21/11	2,943,791	2,884,636	(59,155)

	Swiss Franc	Buy	8/17/11	5,098,671	5,117,449	(18,778)

	Swiss Franc	Buy	7/21/11	5,097,850	5,090,687	7,163

	Swiss Franc	Sell	7/21/11	5,097,850	5,115,982	18,132

Goldman Sachs International

	Australian Dollar	Buy	8/17/11	3,981,532	3,882,028	99,504

	Australian Dollar	Buy	7/21/11	3,995,194	3,970,653	24,541

	Australian Dollar	Sell	7/21/11	3,995,194	3,894,955	(100,239)

	British Pound	Buy	8/17/11	4,200,372	4,179,491	20,881

	British Pound	Buy	7/21/11	4,201,762	4,287,746	(85,984)

	British Pound	Sell	7/21/11	4,201,762	4,180,877	(20,885)

	Euro	Sell	8/17/11	1,578,458	1,548,706	(29,752)

	Euro	Buy	7/21/11	1,579,655	1,549,882	29,773

	Euro	Sell	7/21/11	1,579,655	1,570,616	(9,039)

	Japanese Yen	Sell	8/17/11	3,168,478	3,151,808	(16,670)

	Japanese Yen	Buy	7/21/11	3,168,033	3,151,340	16,693

	Japanese Yen	Sell	7/21/11	3,168,033	3,150,171	(17,862)

	Norwegian Krone	Buy	8/17/11	1,304,603	1,284,721	19,882

	Norwegian Krone	Buy	7/21/11	1,306,831	1,305,231	1,600

	Norwegian Krone	Sell	7/21/11	1,306,831	1,286,811	(20,020)

	Swedish Krona	Buy	8/17/11	6,429,467	6,300,695	128,772

	Swedish Krona	Buy	7/21/11	6,439,574	6,532,656	(93,082)

	Swedish Krona	Sell	7/21/11	6,439,574	6,309,486	(130,088)

FORWARD CURRENCY CONTRACTS at 6/30/11 (aggregate face value $1,539,160,994) cont.


						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)

HSBC Bank USA, National Association

	Australian Dollar	Buy	8/17/11	$5,397,607	$5,267,949	$129,658

	Australian Dollar	Buy	7/21/11	7,735,842	7,679,945	55,897

	Australian Dollar	Sell	7/21/11	7,735,842	7,550,709	(185,133)

	British Pound	Sell	8/17/11	267,391	265,892	(1,499)

	British Pound	Buy	7/21/11	267,480	265,967	1,513

	British Pound	Sell	7/21/11	267,478	272,950	5,472

	Euro	Sell	8/17/11	5,349,556	5,249,795	(99,761)

	Euro	Buy	7/21/11	5,353,613	5,253,815	99,798

	Euro	Sell	7/21/11	5,353,613	5,317,482	(36,131)

	Hong Kong Dollar	Buy	8/17/11	2,352,923	2,351,825	1,098

	Hong Kong Dollar	Buy	7/21/11	2,352,537	2,354,033	(1,496)

	Hong Kong Dollar	Sell	7/21/11	2,352,537	2,351,432	(1,105)

	Norwegian Krone	Sell	8/17/11	4,187,204	4,131,193	(56,011)

	Norwegian Krone	Buy	7/21/11	4,194,354	4,138,040	56,314

	Norwegian Krone	Sell	7/21/11	4,194,354	4,182,547	(11,807)

	Swiss Franc	Buy	8/17/11	5,384,251	5,405,664	(21,413)

	Swiss Franc	Buy	7/21/11	5,383,385	5,376,587	6,798

	Swiss Franc	Sell	7/21/11	5,383,385	5,403,823	20,438

JPMorgan Chase Bank, N.A.

	Australian Dollar	Buy	8/17/11	1,969,422	1,920,268	49,154

	Australian Dollar	Buy	7/21/11	1,976,179	1,964,244	11,935

	Australian Dollar	Sell	7/21/11	1,976,179	1,926,598	(49,581)

	British Pound	Buy	8/17/11	13,611,903	13,540,547	71,356

	British Pound	Buy	7/21/11	13,616,407	13,796,428	(180,021)

	British Pound	Sell	7/21/11	13,616,407	13,544,488	(71,919)

	Euro	Sell	8/17/11	9,616,497	9,435,240	(181,257)

	Euro	Buy	7/21/11	9,623,790	9,442,402	181,388

	Euro	Sell	7/21/11	9,623,790	9,559,901	(63,889)

	Hong Kong Dollar	Sell	8/17/11	4,285,477	4,282,833	(2,644)

	Hong Kong Dollar	Buy	7/21/11	4,284,773	4,282,157	2,616

	Hong Kong Dollar	Sell	7/21/11	4,284,773	4,287,222	2,449

	Japanese Yen	Sell	8/17/11	2,120,648	2,109,126	(11,522)

	Japanese Yen	Buy	7/21/11	8,032,583	8,015,624	16,959

	Japanese Yen	Sell	7/21/11	8,032,583	7,988,974	(43,609)

	Norwegian Krone	Buy	8/17/11	9,814,428	9,669,972	144,456

	Norwegian Krone	Buy	7/21/11	9,831,188	9,814,778	16,410

	Norwegian Krone	Sell	7/21/11	9,831,188	9,685,004	(146,184)

	Singapore Dollar	Buy	8/17/11	16,013,982	15,999,186	14,796

	Singapore Dollar	Buy	7/21/11	19,965,785	19,955,861	9,924

	Singapore Dollar	Sell	7/21/11	19,965,785	19,925,568	(40,217)

	Swedish Krona	Buy	8/17/11	3,474,420	3,405,413	69,007

	Swedish Krona	Buy	7/21/11	3,479,882	3,530,879	(50,997)

	Swedish Krona	Sell	7/21/11	3,479,882	3,409,953	(69,929)

	Swiss Franc	Buy	8/17/11	10,046,516	10,082,553	(36,037)

FORWARD CURRENCY CONTRACTS at 6/30/11 (aggregate face value $1,539,160,994) cont.


						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)

JPMorgan Chase Bank, N.A. cont.

	Swiss Franc	Buy	7/21/11	$10,044,898	$10,030,903	$13,995

	Swiss Franc	Sell	7/21/11	10,044,898	10,079,422	34,524

Royal Bank of Scotland PLC (The)

	Australian Dollar	Buy	8/17/11	3,292,544	3,202,222	90,322

	Australian Dollar	Buy	7/21/11	5,623,662	5,584,970	38,692

	Australian Dollar	Sell	7/21/11	5,623,662	5,478,043	(145,619)

	British Pound	Sell	8/17/11	17,120,269	17,025,565	(94,704)

	British Pound	Buy	7/21/11	17,125,934	17,030,149	95,785

	British Pound	Sell	7/21/11	17,125,934	17,469,148	343,214

	Canadian Dollar	Buy	8/17/11	3,270,949	3,191,418	79,531

	Canadian Dollar	Buy	7/21/11	3,273,156	3,238,448	34,708

	Canadian Dollar	Sell	7/21/11	3,273,156	3,192,775	(80,381)

	Euro	Sell	8/17/11	11,955,904	11,734,427	(221,477)

	Euro	Buy	7/21/11	11,964,971	11,743,578	221,393

	Euro	Sell	7/21/11	11,964,971	11,888,425	(76,546)

	Israeli Shekel	Buy	7/21/11	4,769,608	4,813,767	(44,159)

	Japanese Yen	Sell	8/17/11	3,682,644	3,661,276	(21,368)

	Japanese Yen	Buy	7/21/11	9,594,360	9,567,908	26,452

	Japanese Yen	Sell	7/21/11	9,594,360	9,543,393	(50,967)

	Swedish Krona	Buy	8/17/11	6,320,026	6,192,036	127,990

	Swedish Krona	Buy	7/21/11	6,329,960	6,423,241	(93,281)

	Swedish Krona	Sell	7/21/11	6,329,960	6,200,356	(129,604)

	Swiss Franc	Buy	8/17/11	7,274,989	7,304,052	(29,063)

	Swiss Franc	Buy	7/21/11	7,273,818	7,263,942	9,876

	Swiss Franc	Sell	7/21/11	7,273,818	7,301,434	27,616

State Street Bank and Trust Co.

	Australian Dollar	Buy	8/17/11	3,404,494	3,319,516	84,978

	Australian Dollar	Buy	7/21/11	3,416,175	3,396,283	19,892

	Australian Dollar	Sell	7/21/11	3,416,175	3,330,464	(85,711)

	Canadian Dollar	Sell	8/17/11	1,841,315	1,798,251	(43,064)

	Canadian Dollar	Buy	7/21/11	1,842,557	1,799,493	43,064

	Canadian Dollar	Sell	7/21/11	1,842,557	1,822,370	(20,187)

	Euro	Sell	8/17/11	7,240,689	7,102,715	(137,974)

	Euro	Buy	7/21/11	7,246,180	7,108,606	137,574

	Euro	Sell	7/21/11	7,246,180	7,203,717	(42,463)

	Israeli Shekel	Buy	7/21/11	4,769,579	4,808,181	(38,602)

	Norwegian Krone	Sell	8/17/11	383,143	377,337	(5,806)

	Norwegian Krone	Buy	7/21/11	383,798	378,022	5,776

	Norwegian Krone	Sell	7/21/11	383,798	383,283	(515)

	Swedish Krona	Sell	8/17/11	10,117,210	9,918,847	(198,363)

	Swedish Krona	Buy	7/21/11	10,133,113	9,932,568	200,545

	Swedish Krona	Sell	7/21/11	10,133,113	10,304,962	171,849

FORWARD CURRENCY CONTRACTS at 6/30/11 (aggregate face value $1,539,160,994) cont.


						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)

UBS AG

	Australian Dollar	Buy	8/17/11	$3,245,160	$3,164,469	$80,691

	Australian Dollar	Buy	7/21/11	5,576,116	5,508,664	67,452

	Australian Dollar	Sell	7/21/11	5,576,116	5,440,369	(135,747)

	British Pound	Sell	8/17/11	9,412,494	9,359,431	(53,063)

	British Pound	Buy	7/21/11	9,415,609	9,362,948	52,661

	British Pound	Sell	7/21/11	9,415,609	9,594,410	178,801

	Euro	Sell	8/17/11	11,481,671	11,269,374	(212,297)

	Euro	Buy	7/21/11	11,490,378	11,278,558	211,820

	Euro	Sell	7/21/11	11,490,378	11,424,706	(65,672)

	Israeli Shekel	Sell	7/21/11	6,810,538	6,877,668	67,130

	Norwegian Krone	Buy	8/17/11	377,343	371,768	5,575

	Norwegian Krone	Buy	7/21/11	377,987	377,335	652

	Norwegian Krone	Sell	7/21/11	377,987	372,435	(5,552)

	Swedish Krona	Buy	8/17/11	4,219,943	4,135,872	84,071

	Swedish Krona	Buy	7/21/11	4,226,576	4,286,728	(60,152)

	Swedish Krona	Sell	7/21/11	4,226,576	4,141,451	(85,125)

	Swiss Franc	Buy	8/17/11	8,570,638	8,605,391	(34,753)

	Swiss Franc	Buy	7/21/11	8,569,258	8,557,929	11,329

	Swiss Franc	Sell	7/21/11	8,569,258	8,602,820	33,562

Westpac Banking Corp.

	Australian Dollar	Buy	8/17/11	1,291,746	1,258,247	33,499

	Australian Dollar	Buy	7/21/11	1,296,178	1,287,732	8,446

	Australian Dollar	Sell	7/21/11	1,296,178	1,262,447	(33,731)

	British Pound	Buy	8/17/11	6,605,448	6,572,652	32,796

	British Pound	Buy	7/21/11	6,607,634	6,742,029	(134,395)

	British Pound	Sell	7/21/11	6,607,634	6,574,790	(32,844)

	Canadian Dollar	Sell	8/17/11	4,016,971	3,923,032	(93,939)

	Canadian Dollar	Buy	7/21/11	4,019,682	3,925,337	94,345

	Canadian Dollar	Sell	7/21/11	4,019,682	3,976,560	(43,122)

	Euro	Sell	8/17/11	3,298,605	3,236,488	(62,117)

	Euro	Buy	7/21/11	3,301,107	3,238,888	62,219

	Euro	Sell	7/21/11	3,301,107	3,281,899	(19,208)

	Japanese Yen	Sell	8/17/11	4,105,069	4,084,026	(21,043)

	Japanese Yen	Buy	7/21/11	10,016,724	9,990,080	26,644

	Japanese Yen	Sell	7/21/11	10,016,724	9,960,251	(56,473)

Total						$(1,343,984)

ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 — Valuations based on quoted prices for identical securities in active markets.

Level 2 — Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 — Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:


		Valuation inputs

Investments in securities:	Level 1	Level 2	Level 3

Common stocks:

Australia	$—	$28,452,042	$—

Belgium	26,795,972	—	—

Brazil	5,104,163	—	—

Canada	24,650,842	—	—

China	9,926,524	87,768,492	—

Denmark	8,731,801	—	—

Finland	8,540,643	—	—

France	205,115,701	—	—

Germany	204,387,140	—	—

Hong Kong	—	10,565,259	867,000

Ireland	31,926,120	—	—

Israel	10,801,280	—	—

Japan	—	260,081,104	—

Malaysia	—	8,090,047	—

Netherlands	19,255,407	—	—

Russia	47,260,435	—	—

South Korea	—	30,363,849	—

Spain	27,258,479	—	—

Sweden	23,331,908	—	—

Switzerland	27,419,487	—	—

Taiwan	—	23,517,855	—

United Kingdom	231,816,585	—	—

United States	32,673,835	—	—

Total common stocks	944,996,322	448,838,648	867,000

Short-term investments	4,615,273	24,595,443	—

Totals by level	$949,611,595	$473,434,091	$867,000

		Valuation inputs

Other financial instruments:	Level 1	Level 2	Level 3

Forward currency contracts	$—	$(1,343,984)	$—

Totals by level	$—	$(1,343,984)	$—

At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund’s portfolio.

The accompanying notes are an integral part of these financial statements.

Statement of assets and liabilities 6/30/11


ASSETS

Investment in securities, at value, including $22,570,206 of securities on loan (Note 1):
Unaffiliated issuers (identified cost $1,201,541,869)	$1,396,388,066
Affiliated issuers (identified cost $27,524,620) (Notes 1 and 6)	27,524,620

Cash	1

Foreign currency (cost $4,517,681) (Note 1)	4,573,770

Dividends, interest and other receivables	4,313,078

Receivable for shares of the fund sold	271,679

Receivable for investments sold	2,596,105

Unrealized appreciation on forward currency contracts (Note 1)	7,569,993

Total assets	1,443,237,312

LIABILITIES

Payable for investments purchased	1,330,141

Payable for shares of the fund repurchased	6,246,066

Payable for compensation of Manager (Note 2)	838,788

Payable for investor servicing fees (Note 2)	319,531

Payable for custodian fees (Note 2)	130,188

Payable for Trustee compensation and expenses (Note 2)	552,545

Payable for administrative services (Note 2)	7,694

Payable for distribution fees (Note 2)	860,433

Unrealized depreciation on forward currency contracts (Note 1)	8,913,977

Collateral on securities loaned, at value (Note 1)	22,909,347

Other accrued expenses	305,829

Total liabilities	42,414,539

Net assets	$1,400,822,773


REPRESENTED BY

Paid-in capital (Unlimited shares authorized) (Notes 1, 4 and 8)	$2,623,602,802

Undistributed net investment income (Note 1)	17,763,141

Accumulated net realized loss on investments and foreign currency transactions (Note 1)	(1,433,899,240)

Net unrealized appreciation of investments and assets and liabilities in foreign currencies	193,356,070

Total — Representing net assets applicable to capital shares outstanding	$1,400,822,773

(Continued on next page)

Statement of assets and liabilities (Continued)


COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE

Net asset value and redemption price per class A share
($1,159,509,765 divided by 55,387,963 shares)	$20.93

Offering price per class A share (100/94.25 of $20.93)*	$22.21

Net asset value and offering price per class B share ($50,180,024 divided by 2,527,451 shares)**	$19.85

Net asset value and offering price per class C share ($80,648,348 divided by 3,987,393 shares)**	$20.23

Net asset value and redemption price per class M share ($24,507,489 divided by 1,202,729 shares)	$20.38

Offering price per class M share (100/96.50 of $20.38)*	$21.12

Net asset value, offering price and redemption price per class R share
($4,583,463 divided by 222,360 shares)	$20.61

Net asset value, offering price and redemption price per class Y share
($81,393,684 divided by 3,839,025 shares)	$21.20

* On single retail sales of less than $50,000. On sales of $50,000 or more 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 Year ended 6/30/11


INVESTMENT INCOME

Dividends (net of foreign tax of $3,462,738)	$33,339,338

Interest (including interest income of $8,638 from investments in affiliated issuers) (Note 6)	722,639

Securities lending (including interest income of $1,263,332 from investments in affiliated
issuers) (Note 1)	1,302,056

Total investment income	35,364,033

EXPENSES

Compensation of Manager (Note 2)	10,659,864

Investor servicing fees (Note 2)	4,712,833

Custodian fees (Note 2)	221,504

Trustee compensation and expenses (Note 2)	126,984

Administrative services (Note 2)	46,880

Distribution fees — Class A (Note 2)	3,021,931

Distribution fees — Class B (Note 2)	644,346

Distribution fees — Class C (Note 2)	844,992

Distribution fees — Class M (Note 2)	203,025

Distribution fees — Class R (Note 2)	21,888

Other	644,380

Total expenses	21,148,627

Expense reduction (Note 2)	(212,259)

Net expenses	20,936,368

Net investment income	14,427,665


Net realized gain on investments (net of foreign tax of $188) (Notes 1 and 3)	192,741,328

Net realized gain on foreign currency transactions (Note 1)	50,905,023

Net unrealized depreciation of assets and liabilities in foreign currencies during the year	(5,751,519)

Net unrealized appreciation of investments during the year	184,646,249

Net gain on investments	422,541,081

Net increase in net assets resulting from operations	$436,968,746

The accompanying notes are an integral part of these financial statements.

Statement of changes in net assets


INCREASE (DECREASE) IN NET ASSETS	Year ended 6/30/11	Year ended 6/30/10

Operations:
Net investment income	$14,427,665	$17,060,372

Net realized gain on investments
and foreign currency transactions	243,646,351	100,224,164

Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies	178,894,730	(13,298,929)

Net increase in net assets resulting from operations	436,968,746	103,985,607

Distributions to shareholders (Note 1):
From ordinary income
Net investment income

Class A	(25,096,126)	(31,836,980)

Class B	(741,492)	(1,784,552)

Class C	(1,157,137)	(1,663,682)

Class M	(456,031)	(617,586)

Class R	(86,014)	(84,381)

Class Y	(1,617,043)	(3,571,082)

From return of capital
Class A	—	(905,390)

Class B	—	(50,750)

Class C	—	(47,312)

Class M	—	(17,563)

Class R	—	(2,400)

Class Y	—	(101,556)

Increase in capital from settlement payments (Note 8)	3,647,415	50,538

Redemption fees (Note 1)	7,828	35,528

Decrease from capital share transactions (Note 4)	(361,211,392)	(466,904,081)

Total increase (decrease) in net assets	50,258,754	(403,515,642)

NET ASSETS

Beginning of year	1,350,564,019	1,754,079,661

End of year (including undistributed net investment
income of $17,763,141 and distributions in excess of net
investment income of $22,092,782, respectively)	$1,400,822,773	$1,350,564,019

The accompanying notes are an integral part of these financial statements.

Financial highlights (For a common share outstanding throughout the period)


INVESTMENT OPERATIONS:					LESS DISTRIBUTIONS:								RATIOS AND SUPPLEMENTAL DATA:

															Ratio
	Net asset	Net	Net realized		From	From								Ratio	of net investment
	value,	investment	and unrealized	Total from	net	net realized	From						Net assets,	of expenses	income (loss)
	beginning	income	gain (loss)	investment	investment	gain	return	Total	Redemption	Non-recurring	Net asset value,	Total return at net	end of period	to average	to average	Portfolio
Period ended	of period	(loss) ^a	on investments	operations	income	on investments	of capital	distributions	fees ^b	reimbursements	end of period	asset value (%) ^c	(in thousands)	net assets (%) ^d	net assets (%)	turnover (%)

Class A
June 30, 2011	$15.80	.21	5.28	5.49	(.41)	—	—	(.41)	—	.05 ^e,f,g	$20.93	35.21	$1,159,510	1.37	1.06	80
June 30, 2010	15.75	.19	.29	.48	(.42)	—	(.01)	(.43)	—	— ^b,h	15.80	2.67	1,087,233	1.42	1.07	96
June 30, 2009	24.68	.38	(9.38)	(9.00)	—	—	—	—	—	.07 ^i,j	15.75	(36.18)	1,364,234	1.35 ^k	2.27 ^k	82
June 30, 2008	34.90	.48	(4.40)	(3.92)	(1.06)	(5.24)	—	(6.30)	—	—	24.68	(12.73)	3,246,278	1.19 ^k	1.63 ^k	74
June 30, 2007	28.82	.35	7.89	8.24	(.70)	(1.46)	—	(2.16)	—	—	34.90	29.51	4,223,621	1.25 ^k	1.11 ^k	95

Class B
June 30, 2011	$14.96	.03	5.02	5.05	(.21)	—	—	(.21)	—	.05 ^e,f,g	$19.85	34.20	$50,180	2.12	.18	80
June 30, 2010	14.91	.04	.28	.32	(.26)	—	(.01)	(.27)	—	— ^b,h	14.96	1.89	70,933	2.17	.21	96
June 30, 2009	23.55	.24	(8.95)	(8.71)	—	—	—	—	—	.07 ^i,j	14.91	(36.69)	134,905	2.10 ^k	1.45 ^k	82
June 30, 2008	33.50	.18	(4.15)	(3.97)	(.74)	(5.24)	—	(5.98)	—	—	23.55	(13.38)	478,126	1.94 ^k	.62 ^k	74
June 30, 2007	27.71	.09	7.60	7.69	(.44)	(1.46)	—	(1.90)	—	—	33.50	28.56	1,013,822	2.00 ^k	.29 ^k	95

Class C
June 30, 2011	$15.27	.06	5.11	5.17	(.26)	—	—	(.26)	—	.05 ^e,f,g	$20.23	34.29	$80,648	2.12	.31	80
June 30, 2010	15.24	.05	.29	.34	(.30)	—	(.01)	(.31)	—	— ^b,h	15.27	1.92	76,281	2.17	.31	96
June 30, 2009	24.07	.25	(9.15)	(8.90)	—	—	—	—	—	.07 ^i,j	15.24	(36.68)	93,839	2.10 ^k	1.56 ^k	82
June 30, 2008	34.16	.24	(4.30)	(4.06)	(.79)	(5.24)	—	(6.03)	—	—	24.07	(13.39)	211,371	1.94 ^k	.82 ^k	74
June 30, 2007	28.25	.11	7.73	7.84	(.47)	(1.46)	—	(1.93)	—	—	34.16	28.55	300,684	2.00 ^k	.37 ^k	95

Class M
June 30, 2011	$15.38	.10	5.16	5.26	(.31)	—	—	(.31)	—	.05 ^e,f,g	$20.38	34.65	$24,507	1.87	.51	80
June 30, 2010	15.35	.10	.28	.38	(.34)	—	(.01)	(.35)	—	— ^b,h	15.38	2.15	25,387	1.92	.57	96
June 30, 2009	24.18	.29	(9.19)	(8.90)	—	—	—	—	—	.07 ^i,j	15.35	(36.52)	29,707	1.85 ^k	1.81 ^k	82
June 30, 2008	34.30	.31	(4.32)	(4.01)	(.87)	(5.24)	—	(6.11)	—	—	24.18	(13.20)	66,502	1.69 ^k	1.07 ^k	74
June 30, 2007	28.35	.19	7.76	7.95	(.54)	(1.46)	—	(2.00)	—	—	34.30	28.89	96,237	1.75 ^k	.61 ^k	95

Class R
June 30, 2011	$15.57	.17	5.19	5.36	(.37)	—	—	(.37)	—	.05 ^e,f,g	$20.61	34.90	$4,583	1.62	.85	80
June 30, 2010	15.52	.15	.29	.44	(.38)	—	(.01)	(.39)	—	— ^b,h	15.57	2.46	3,537	1.67	.82	96
June 30, 2009	24.40	.35	(9.30)	(8.95)	—	—	—	—	—	.07 ^i,j	15.52	(36.39)	3,648	1.60 ^k	2.18 ^k	82
June 30, 2008	34.59	.42	(4.38)	(3.96)	(.99)	(5.24)	—	(6.23)	—	—	24.40	(12.96)	5,128	1.44 ^k	1.45 ^k	74
June 30, 2007	28.61	.33	7.77	8.10	(.66)	(1.46)	—	(2.12)	—	—	34.59	29.23	5,504	1.50 ^k	1.05 ^k	95

Class Y
June 30, 2011	$16.00	.27	5.34	5.61	(.46)	—	—	(.46)	—	.05 ^e,f,g	$21.20	35.55	$81,394	1.12	1.38	80
June 30, 2010	15.94	.22	.31	.53	(.46)	—	(.01)	(.47)	—	— ^b,h	16.00	2.95	87,194	1.17	1.21	96
June 30, 2009	24.92	.41	(9.46)	(9.05)	—	—	—	—	—	.07 ^i,j	15.94	(36.04)	127,746	1.10 ^k	2.25 ^k	82
June 30, 2008	35.18	.58	(4.46)	(3.88)	(1.14)	(5.24)	—	(6.38)	—	—	24.92	(12.49)	1,312,695	.94 ^k	1.94 ^k	74
June 30, 2007	29.03	.45	7.94	8.39	(.78)	(1.46)	—	(2.24)	—	—	35.18	29.85	1,613,443	1.00 ^k	1.40 ^k	95

See notes to financial highlights at the end of this section.

The accompanying notes are an integral part of these financial statements.


38	39

Financial highlights (Continued)

^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 Amount represents less than $0.01 per share.

^c Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

^d Includes amounts paid through expense offset and brokerage/services arrangements (Note 2).

^e Reflects a non-recurring reimbursement pursuant to a settlement between the Securities and Exchange Commission (the SEC) and Zurich Capital Markets, which amounted to less than $0.01 per share outstanding as of December 21, 2010.

^f Reflects a non-recurring reimbursal related to short-term trading related lawsuits, which amounted to $0.01 per share outstanding on May 11, 2011 (Note 8).

^g Reflects a non-recurring reimbursement pursuant to a settlement between the SEC and Prudential Securities, Inc., which amounted to $0.04 per share outstanding as of May 16, 2011.

^h Reflects a non-recurring reimbursement pursuant to a settlement between the SEC and Prudential Securities, Inc., which amounted to less than $0.01 per share outstanding as of March 30, 2010.

ⁱ Reflects a non-recurring reimbursement pursuant to a settlement between the SEC and Millennium Partners, L.P., Millennium Management, L.L.C., and Millennium International Management, L.L.C., which amounted to $0.04 per share outstanding as of June 23, 2009.

^j Reflects a non-recurring reimbursement pursuant to a settlement between the SEC and Bear, Stearns & Co., Inc. and Bear, Stearns Securities Corp., which amounted to $0.03 per share outstanding as of May 21, 2009.

^k Reflects an involuntary contractual expense limitation and/or waivers of certain fund expenses in connection with investments in Putnam Prime Money Market Fund in effect during the period. As a result of such limitation and/or waivers, the expenses of each class reflect a reduction of the following amounts:


	Percentage of
	average net assets

June 30, 2009	0.01%

June 30, 2008	<0.01

June 30, 2007	<0.01

The accompanying notes are an integral part of these financial statements.

Notes to financial statements 6/30/11

Note 1: Significant accounting policies

Putnam International Equity Fund (the fund) is a Massachusetts business trust 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 mainly in common stocks (growth or value stocks or both) of midsize and large companies outside the United States that we believe have favorable investment potential.

The fund offers class A, class B, class C, class M, class R and class Y shares. Class A and class M shares are sold with a maximum front-end sales charge of 5.75% and 3.50%, respectively, and generally do not pay a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class R shares, which are not available to all investors, are sold at net asset value. The expenses for class A, class B, class C, class M and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee. Class Y shares are not available to all investors.

Prior to November 1, 2010, a 1.00% redemption fee applied to certain shares that were redeemed (either by selling or exchanging into another fund) within 90 days of purchase. The redemption fee was accounted for as an addition to paid-in-capital. Effective November 1, 2010, this redemption fee no longer applies to shares redeemed.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). 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. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.

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. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. Unless otherwise noted, the “reporting period” represents the period from July 1, 2010 through June 30, 2011.

A) Security valuation Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities. If no sales are reported — as in the case of some securities traded over-the-counter — a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange 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 New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Investment Management, LLC (Putnam Management), the fund’s manager, an indirect wholly-owned subsidiary of Putnam

Investments, LLC, does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

B) Joint trading account Pursuant to an exemptive order from the Securities and Exchange Commission (the SEC), 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 issues of short-term investments having maturities of up to 397 days for collateral received under security lending arrangements and up to 90 days for other cash investments.

C) Security transactions and related investment income Security transactions are recorded on the trade date (the 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, net of applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized 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. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

All premiums/discounts are amortized/accreted on a yield-to-maturity basis.

The fund earned certain fees in connection with its senior loan purchasing activities. These fees are treated as market discount and are amortized into income in the Statement of operations.

D) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments. The fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

E) Forward currency contracts The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. 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 when the contract matures or by delivery of the currency. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities. Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio. The fund had an average contract amount of approximately $792,300,000 on forward currency contracts for the reporting period.

F) Master agreements The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over-the-counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio. Collateral posted to the fund which cannot be sold or repledged totaled $383,374 at the close of the reporting period. Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.

At the close of the reporting period, the fund had a net liability position of $1,684,770 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $1,541,463.

G) Securities lending The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending is included in investment income on the Statement of operations. Effective August 2010, cash collateral is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged by Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the value of securities loaned amounted to $22,570,206 and the fund received cash collateral of $22,909,347.

H) Interfund lending Effective July 2010, the fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

I) Line of credit Effective July 2010, the fund participates, along with other Putnam funds, in a $285 million unsecured committed line of credit and a $165 million unsecured uncommitted line of credit, both provided by State Street Bank and Trust Company (State Street). Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to the Federal Funds rate plus 1.25% for the committed line of credit and the Federal Funds rate plus 1.30% for the uncommitted line of credit. A closing fee equal to 0.03% of the committed line of credit and $100,000 for the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.15% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

J) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the 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 Code. The fund is subject to the provisions of Accounting Standards Codification ASC 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. 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. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

At June 30, 2011, the fund had a capital loss carryover of $1,428,533,347 available to the extent allowed by the Code to offset future net capital gain, if any. The amounts of the carryovers and the expiration dates are:


Loss carryover		Expiration

$453,462,998		June 30, 2017

975,070,349		June 30, 2018

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

K) 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. These differences include temporary and/or permanent differences of losses on wash sale transactions, foreign currency gains and losses and restitution payments. 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. For the reporting period ended, the fund reclassified $54,582,101 to decrease distributions in excess of net investment income and $3,647,412 to decrease paid-in-capital, with an increase to accumulated net realized losses of $50,934,689.

The tax basis components of distributable earnings and the federal tax cost as of the close of the reporting period were as follows:


Unrealized appreciation	$242,724,881
Unrealized depreciation	(53,244,577)

Net unrealized appreciation	189,480,304
Undistributed ordinary income	16,478,676
Capital loss carryforward	(1,428,533,347)
Cost for federal income tax purposes	$1,234,432,382

Note 2: Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (base fee) (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of most open-end funds, as defined in the fund’s management contract, sponsored by Putnam Management. Such annual rates may vary as follows:


0.850%	of the first $5 billion,
0.800%	of the next $5 billion,
0.750%	of the next $10 billion,
0.700%	of the next $10 billion,
0.650%	of the next $50 billion,
0.630%	of the next $50 billion,
0.620%	of the next $100 billion,
0.615%	of any excess thereafter.

In addition, beginning with the fund’s thirteenth complete calendar month of operation under the management contract (January 2011), the monthly management fee consists of the monthly base fee plus or minus a performance adjustment for the month. The performance adjustment is determined based on performance over the thirty-six month period then ended or, if the management contract has not yet been effective for thirty-six complete calendar months, the period from the date the management contract became effective to the end of the month for which the fee adjustment is being computed. Each month, the performance adjustment is calculated by multiplying the performance adjustment rate and the fund’s average net assets over the performance period and the result is divided by twelve. The resulting dollar amount is added to, or subtracted from the base fee for that month. The performance adjustment rate is equal to 0.03 multiplied by the difference between the fund’s annualized performance (measured by the fund’s class A shares) and the annualized performance of the MSCI EAFE Index (Net Dividends), each measured over the performance period. The maximum annualized performance adjustment rates are +/– 0.15%. The monthly base fee is determined based on the fund’s average net assets for the month, while the performance adjustment is determined based on the fund’s average net assets over the performance period of up to thirty-six months. This means it is possible that, if the fund underperforms significantly over the performance period, and the fund’s assets have declined significantly over that period, the negative performance adjustment may exceed the base fee. In this event, Putnam Management would make a payment to the fund.

For the reporting period ended, the base fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.70% of the fund’s average net assets before an increase of $349,131 (0.02% of the fund’s average net assets) based on performance.

Putnam Management has contractually agreed, through June 30, 2012, to waive fees or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were not reduced as a result of this limit.

Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. Putnam Management pays a quarterly sub-management fee to PIL for its services at an annual rate of 0.35% of the average net assets of the portion of the fund managed by PIL.

The Putnam Advisory Company, LLC (PAC), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund, as designated from time to time by Putnam Management or PIL. Putnam Management or PIL, as applicable, pays a quarterly sub-advisory fee to PAC for its services at the annual rate of 0.35% of the average net assets of the portion of the fund’s assets for which PAC is engaged as sub-adviser.

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 State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing based on the fund’s retail asset level, the number of shareholder accounts in the fund and the level of defined contribution plan assets in the fund. Investor servicing fees will not exceed an annual rate of 0.375% of the fund’s average net assets. The amounts incurred for investor servicing agent functions during the reporting period are included in Investor servicing fees in the Statement of operations.

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. The fund also reduced expenses through brokerage/service arrangements. For the reporting period, the fund’s expenses were reduced by $3,918 under the expense offset arrangements and by $208,341 under the brokerage/service arrangements.

Each independent Trustee of the fund receives an annual Trustee fee, of which $811, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

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 and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the Plans) with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, a wholly-owned subsidiary of Putnam Investments, LLC and Putnam Retail Management GP, Inc., for services provided and expenses incurred in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and 0.50% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively.

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $43,652 and $361 from the sale of class A and class M shares, respectively, and received $44,384 and $883 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 reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received $10 and no monies on class A and class M redemptions, respectively.

Note 3: Purchases and sales of securities

During the reporting period, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $1,160,435,782 and $1,477,677,534, respectively. There were no purchases or proceeds from sales of long-term U.S. government securities.

Note 4: Capital shares

At the close of the reporting period, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:


	Year ended 6/30/11		Year ended 6/30/10

Class A	Shares	Amount	Shares	Amount

Shares sold	3,773,374	$73,744,650	6,578,125	$117,976,764

Shares issued in connection with
reinvestment of distributions	1,161,686	22,931,491	1,672,287	30,669,670

	4,935,060	96,676,141	8,250,412	148,646,434

Shares repurchased	(18,363,042)	(358,335,123)	(26,072,897)	(467,161,567)

Net decrease	(13,427,982)	$(261,658,982)	(17,822,485)	$(318,515,133)


	Year ended 6/30/11		Year ended 6/30/10

Class B	Shares	Amount	Shares	Amount

Shares sold	135,047	$2,501,557	240,850	$4,154,301

Shares issued in connection with
reinvestment of distributions	36,108	678,939	95,998	1,673,251

	171,155	3,180,496	336,848	5,827,552

Shares repurchased	(2,385,232)	(44,057,822)	(4,644,625)	(78,931,544)

Net decrease	(2,214,077)	$(40,877,326)	(4,307,777)	$(73,103,992)


	Year ended 6/30/11		Year ended 6/30/10

Class C	Shares	Amount	Shares	Amount

Shares sold	103,761	$1,977,976	182,156	$3,228,437

Shares issued in connection with
reinvestment of distributions	48,536	929,458	75,901	1,350,281

	152,297	2,907,434	258,057	4,578,718

Shares repurchased	(1,160,049)	(21,882,300)	(1,420,360)	(24,677,554)

Net decrease	(1,007,752)	$(18,974,866)	(1,162,303)	$(20,098,836)


	Year ended 6/30/11		Year ended 6/30/10

Class M	Shares	Amount	Shares	Amount

Shares sold	82,574	$1,557,175	149,825	$2,640,813

Shares issued in connection with
reinvestment of distributions	19,367	373,014	34,014	608,843

	101,941	1,930,189	183,839	3,249,656

Shares repurchased	(549,427)	(10,537,904)	(468,784)	(8,235,538)

Net decrease	(447,486)	$(8,607,715)	(284,945)	$(4,985,882)


	Year ended 6/30/11		Year ended 6/30/10

Class R	Shares	Amount	Shares	Amount

Shares sold	49,965	$964,990	112,547	$1,961,032

Shares issued in connection with
reinvestment of distributions	4,350	84,643	4,630	83,760

	54,315	1,049,633	117,177	2,044,792

Shares repurchased	(59,144)	(1,153,559)	(125,004)	(2,289,133)

Net decrease	(4,829)	$(103,926)	(7,827)	$(244,341)


	Year ended 6/30/11		Year ended 6/30/10

Class Y	Shares	Amount	Shares	Amount

Shares sold	991,181	$19,968,983	1,452,425	$25,461,553

Shares issued in connection with
reinvestment of distributions	75,012	1,497,237	189,821	3,519,282

	1,066,193	21,466,220	1,642,246	28,980,835

Shares repurchased	(2,678,422)	(52,454,797)	(4,207,562)	(78,936,732)

Net decrease	(1,612,229)	$(30,988,577)	(2,565,316)	$(49,955,897)

Note 5: Summary of derivative activity

The following is a summary of the market values of derivative instruments as of the close of the reporting period:

Market values of derivative instruments as of the close of the reporting period


	Asset derivatives		Liability derivatives

Derivatives not
accounted for as	Statement of		Statement of
hedging instruments	assets and		assets and
under ASC 815	liabilities location	Market value	liabilities location	Market value

Foreign exchange
contracts	Receivables	$7,569,993	Payables	$8,913,977

Total		$7,569,993		$8,913,977

The following is a summary of realized and change in unrealized gains or losses of derivative instruments on the Statement of operations for the reporting period (see Note 1):

Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments


Derivatives not accounted for as hedging	Forward currency
instruments under ASC 815	contracts	Total

Foreign exchange contracts	$50,337,986	$50,337,986

Total	$50,337,986	$50,337,986

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss) on investments


Derivatives not accounted for as hedging	Forward currency
instruments under ASC 815	contracts	Total

Foreign exchange contracts	$(5,604,448)	$(5,604,448)

Total	$(5,604,448)	$(5,604,448)

Note 6: Investment in Putnam Money Market Liquidity Fund

The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income in the Statement of operations and totaled $8,638 for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $400,186,229 and $409,113,590, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

Note 7: Senior loan commitments

Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations.

Note 8: Regulatory matters and litigation

In late 2003 and 2004, Putnam Management settled charges brought by the SEC and the Massachusetts Securities Division in connection with excessive short-term trading in Putnam funds. In July 2011, the fund recorded a receivable of $17,794,843 related to restitution payments in connection with a distribution plan approved by the SEC. These allegations and related matters have served as the general basis for certain lawsuits, including purported class action lawsuits against Putnam Management and, in a limited number of cases, some Putnam funds. In May 2011, the fund received a payment of $831,529 related to settlement of those lawsuits. This amount is reported in the Increase in capital from settlement payments line on the Statement of changes in net assets. Putnam Management has agreed to bear any costs incurred by the Putnam funds as a result of these matters.

Note 9: Market and credit risk

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default.

About the Trustees

Independent Trustees


Name
Year of birth
Position held	Principal occupations during past five years	Other directorships

Ravi Akhoury	Advisor to New York Life Insurance Company. Trustee of	Jacob Ballas Capital
Born 1947	American India Foundation and of the Rubin Museum.	India, a non-banking
Trustee since 2009	From 1992 to 2007, was Chairman and CEO of MacKay	finance company
	Shields, a multi-product investment management firm	focused on private
	with over $40 billion in assets under management.	equity advisory services;
		RAGE Frameworks,
		Inc., a private software
		company

Barbara M. Baumann	President and Owner of Cross Creek Energy Corporation,	SM Energy Company, a
Born 1955	a strategic consultant to domestic energy firms and direct	domestic exploration
Trustee since 2010	investor in energy projects. Trustee of Mount Holyoke	and production
	College and member of the Investment Committee for the	company; UniSource
	college’s endowment. Former Chair and current board	Energy Corporation,
	member of Girls Incorporated of Metro Denver. Member of	an Arizona utility; CVR
	the Finance Committee, The Children’s Hospital of Denver.	Energy, a petroleum
		refiner and fertilizer
		manufacturer; Cody
		Resources Management,
		LLP, a privately held
		energy, ranching, and
		commercial real estate
		company

Jameson A. Baxter	President of Baxter Associates, Inc., a private investment	None
Born 1943	firm. Chair of Mutual Fund Directors Forum. Chair Emeritus
Trustee since 1994,	of the Board of Trustees of Mount Holyoke College.
Vice Chair from 2005	Director of the Adirondack Land Trust and Trustee of the
to 2011, and Chair	Nature Conservancy’s Adirondack Chapter.
since 2011

Charles B. Curtis	Former President and Chief Operating Officer of the	Edison International;
Born 1940	Nuclear Threat Initiative, a private foundation dealing	Southern California
Trustee since 2001	with national security issues. Senior Advisor to the Center	Edison
	for Strategic and International Studies. Member of the
	Council on Foreign Relations.

Robert J. Darretta	Health Care Industry Advisor to Permira, a global private	UnitedHealth
Born 1946	equity firm. Until April 2007, was Vice Chairman of the	Group, a diversified
Trustee since 2007	Board of Directors of Johnson & Johnson. Served as	health-care company
	Johnson & Johnson’s Chief Financial Officer for a decade.

John A. Hill	Founder and Vice-Chairman of First Reserve	Devon Energy
Born 1942	Corporation, the leading private equity buyout firm	Corporation, a leading
Trustee since 1985 and	focused on the worldwide energy industry. Serves as a	independent natural gas
Chairman from 2000	Trustee and Chairman of the Board of Trustees of Sarah	and oil exploration and
to 2011	Lawrence College. Also a member of the Advisory Board	production company
	of the Millstein Center for Corporate Governance and
	Performance at the Yale School of Management.


Name
Year of birth
Position held	Principal occupations during past five years	Other directorships

Paul L. Joskow	Economist and President of the Alfred P. Sloan	TransCanada
Born 1947	Foundation, a philanthropic institution focused primarily	Corporation, an energy
Trustee since 1997	on research and education on issues related to science,	company focused on
	technology, and economic performance. Elizabeth and	natural gas transmission
	James Killian Professor of Economics, Emeritus at the	and power services;
	Massachusetts Institute of Technology (MIT). Prior to	Exelon Corporation, an
	2007, served as the Director of the Center for Energy and	energy company focused
	Environmental Policy Research at MIT.	on power services

Kenneth R. Leibler	Founder and former Chairman of Boston Options	Northeast Utilities,
Born 1949	Exchange, an electronic marketplace for the trading	which operates New
Trustee since 2006	of derivative securities. Vice Chairman of the Board of	England’s largest energy
	Trustees of Beth Israel Deaconess Hospital in Boston,	delivery system
	Massachusetts. Until November 2010, director of Ruder
	Finn Group, a global communications and advertising firm.

Robert E. Patterson	Senior Partner of Cabot Properties, LP and Co-Chairman	None
Born 1945	of Cabot Properties, Inc., a private equity firm investing in
Trustee since 1984	commercial real estate. Past Chairman and Trustee of the
	Joslin Diabetes Center.

George Putnam, III	Chairman of New Generation Research, Inc., a publisher	None
Born 1951	of financial advisory and other research services, and
Trustee since 1984	founder and President of New Generation Advisors, LLC,
	a registered investment advisor to private funds.
	Director of The Boston Family Office, LLC, a registered
	investment advisor.

W. Thomas Stephens	Retired as Chairman and Chief Executive Officer of Boise	TransCanadaPipelines
Born 1942	Cascade, LLC, a paper, forest products, and timberland	Ltd., an energy
Trustee from 1997 to 2008	assets company, in December 2008. Prior to 2010,	infrastructure company
and since 2009	Director of Boise Inc., a manufacturer of paper and
	packaging products.

Interested Trustee

Robert L. Reynolds*	President and Chief Executive Officer of Putnam	None
Born 1952	Investments since 2008. Prior to joining Putnam
Trustee since 2008 and	Investments, served as Vice Chairman and Chief
President of the Putnam	Operating Officer of Fidelity Investments from
Funds since July 2009	2000 to 2007.

The address of each Trustee is One Post Office Square, Boston, MA 02109.

As of June 30, 2011, there were 106 Putnam funds. All Trustees serve as Trustees of all Putnam funds.

Each Trustee serves for an indefinite term, until his or her resignation, retirement at age 72, removal, or death.

* Mr. Reynolds is an “interested person” (as defined in the Investment Company Act of 1940) of the fund, Putnam Management, and/or Putnam Retail Management. He is President and Chief Executive Officer of Putnam Investments, as well as the President of your fund and each of the other Putnam funds.

Officers

In addition to Robert L. Reynolds, the other officers of the fund are shown below:


Jonathan S. Horwitz (Born 1955)	Robert T. Burns (Born 1961)
Executive Vice President, Principal Executive	Vice President and Chief Legal Officer
Officer, Treasurer and Compliance Liaison	Since 2011
Since 2004	General Counsel, Putnam Investments and
	Putnam Management
Steven D. Krichmar (Born 1958)
Vice President and Principal Financial Officer	James P. Pappas (Born 1953)
Since 2002	Vice President
Chief of Operations, Putnam Investments and	Since 2004
Putnam Management	Director of Trustee Relations,
	Putnam Investments and Putnam Management
Janet C. Smith (Born 1965)
Vice President, Assistant Treasurer and	Judith Cohen (Born 1945)
Principal Accounting Officer	Vice President, Clerk and Assistant Treasurer
Since 2007	Since 1993
Director of Fund Administration Services,
Putnam Investments and Putnam Management	Michael Higgins (Born 1976)
	Vice President, Senior Associate Treasurer and
Beth S. Mazor (Born 1958)	Assistant Clerk
Vice President	Since 2010
Since 2002	Manager of Finance, Dunkin’ Brands (2008–
Manager of Trustee Relations, Putnam	2010); Senior Financial Analyst, Old Mutual Asset
Investments and Putnam Management	Management (2007–2008); Senior Financial
	Analyst, Putnam Investments (1999–2007)
Robert R. Leveille (Born 1969)
Vice President and Chief Compliance Officer	Nancy E. Florek (Born 1957)
Since 2007	Vice President, Assistant Clerk, Assistant
Chief Compliance Officer, Putnam Investments,	Treasurer and Proxy Manager
Putnam Management, and Putnam Retail	Since 2000
Management
	**Susan G. Malloy (Born 1957)**
Mark C. Trenchard (Born 1962)	Vice President and Assistant Treasurer
Vice President and BSA Compliance Officer	Since 2007
Since 2002	Director of Accounting & Control Services,
Director of Operational Compliance,	Putnam Management
Putnam Investments and Putnam
Retail Management

The principal occupations of the officers for the past five years have been with the employers as shown above although in some cases, they have held different positions with such employers. The address of each Officer is One Post Office Square, Boston, MA 02109.

Fund information

Founded over 70 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage over 100 funds across income, value, blend, growth, asset allocation, absolute return, and global sector categories.


Investment Manager	Trustees	Beth S. Mazor
Putnam Investment	Jameson A. Baxter, Chair	Vice President
Management, LLC	Ravi Akhoury
One Post Office Square	Barbara M. Baumann	Robert R. Leveille
Boston, MA 02109	Charles B. Curtis	Vice President and
	Robert J. Darretta	Chief Compliance Officer
Investment Sub-Manager	John A. Hill
Putnam Investments Limited	Paul L. Joskow	Mark C. Trenchard
57–59 St James’s Street	Kenneth R. Leibler	Vice President and
London, England SW1A 1LD	Robert E. Patterson	BSA Compliance Officer
	George Putnam, III
Investment Sub-Advisor	Robert L. Reynolds	Robert T. Burns
The Putnam Advisory	W. Thomas Stephens	Vice President and
Company, LLC		Chief Legal Officer
One Post Office Square	Officers
Boston, MA 02109	Robert L. Reynolds	James P. Pappas
	President	Vice President
Marketing Services
Putnam Retail Management	Jonathan S. Horwitz	Judith Cohen
One Post Office Square	Executive Vice President,	Vice President, Clerk and
Boston, MA 02109	Principal Executive	Assistant Treasurer
	Officer, Treasurer and
Custodian	Compliance Liaison	Michael Higgins
State Street Bank and		Vice President, Senior Associate
Trust Company	Steven D. Krichmar	Treasurer and Assistant Clerk
	Vice President and
Legal Counsel	Principal Financial Officer	Nancy E. Florek
Ropes & Gray LLP		Vice President, Assistant Clerk,
	Janet C. Smith	Assistant Treasurer and
Independent Registered	Vice President, Assistant	Proxy Manager
Public Accounting Firm	Treasurer and Principal
PricewaterhouseCoopers LLP	Accounting Officer	Susan G. Malloy
		Vice President and
		Assistant Treasurer

This report is for the information of shareholders of Putnam International Equity Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus or summary prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. 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.


Fiscal year ended	Audit Fees	Audit-Related Fees	Tax Fees	All Other Fees


June 30, 2011	$124,359	$--	$15,982	$ —
June 30, 2010	$138,025	$--	$14,345	$2,445*


Fiscal year ended	Audit-Related Fees	Tax Fees	All Other Fees	Total Non-Audit Fees


June 30, 2011	$ —	$191,000	$ —	$ —

June 30, 2010	$ —	$218,107	$ —	$ —


	CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES


	Exact name of registrant as specified in charter:	Putnam International Equity Fund


	Address of principal executive offices:	One Post Office Square, Boston, Massachusetts 02109


	Name and address of agent for service:	Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109


	Copy to:	John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600


	Registrant’s telephone number, including area code:	(617) 292-1000


	The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:


Message from the Trustees	1

About the fund	2

Performance snapshot	4

Interview with your fund’s portfolio manager	5

Your fund’s performance	10

Your fund’s expenses	12

Terms and definitions	14

Trustee approval of management contract	15

Other information for shareholders	20

Financial statements	21

Federal tax information	49

About the Trustees	50

Officers	52


	The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund’s independent auditor:


	For the fiscal years ended June 30, 2011 and June 30, 2010, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $244,203 and $390,953 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.


	UNITED STATES SECURITIES AND EXCHANGE COMMISSION


	FORM N-CSR


	Item 1. Report to Stockholders:


	Audit Fees represent fees billed for the fund’s last two fiscal years relating to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.


	Audit-Related Fees represent fees billed in the fund’s last two fiscal years for services traditionally performed by the fund’s auditor, including accounting consultation for proposed transactions or concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation.


	Tax Fees represent fees billed in the fund’s last two fiscal years for tax compliance, tax planning and tax advice services. Tax planning and tax advice services include assistance with tax audits, employee benefit plans and requests for rulings or technical advice from taxing authorities.


	All Other Fees represent fees billed for services relating to an analysis of the proposed market timing distribution.


	Pre-Approval Policies of the Audit and Compliance Committee. The Audit and Compliance Committee of the Putnam funds has determined that, as a matter of policy, all work performed for the funds by the funds’ independent auditors will be pre-approved by the Committee itself and thus will generally not be subject to pre-approval procedures.


	The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.


	Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:


	Item 8. Portfolio Managers of Closed-End Investment Companies


	Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:


	Item 10. Submission of Matters to a Vote of Security Holders:


	(b) Changes in internal control over financial reporting: During the period, State Street Bank and Trust Company, which provides certain administrative, pricing and bookkeeping services for the Putnam funds pursuant to an agreement with Putnam Investment Management, LLC, began utilizing different accounting systems and systems support in providing services for the fund.


	(a)(1) The Code of Ethics of The Putnam Funds, which incorporates the Code of Ethics of Putnam Investments, is filed herewith.


	(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.


	(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.


	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	/s/Janet C. Smith Janet C. Smith Principal Accounting Officer


	/s/Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer


	/s/Steven D. Krichmar Steven D. Krichmar Principal Financial Officer