a_growthopportunities.htm

Putnam
Growth Opportunities
Fund

Annual report
7 | 31 | 20


Message from the Trustees	1
Interview with your fund’s portfolio manager	3
Your fund’s performance	8
Your fund’s expenses	10
Consider these risks before investing	12
Terms and definitions	13
Other information for shareholders	14
Important notice regarding Putnam’s privacy policy	15
Trustee approval of management contract	16
Audited financial statements	21
Report of Independent Registered Public Accounting Firm	22
Federal tax information	49
About the Trustees	50
Officers	52

IMPORTANT NOTICE: Delivery of paper fund reports

In accordance with regulations adopted by the Securities and Exchange Commission, beginning on January 1, 2021, reports like this one will no longer be sent by mail unless you specifically request it. Instead, they will be on Putnam’s website, and you will be notified by mail whenever a new one is available, and provided with a website link to access the report.

If you wish to stop receiving paper reports sooner, or if you wish to continue to receive paper reports free of charge after January 1, 2021, please see the back cover or insert for instructions. If you invest through a bank or broker, your choice will apply to all funds held in your account. If you invest directly with Putnam, your choice will apply to all Putnam funds in your account.

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Message from the Trustees

September 8, 2020

Dear Fellow Shareholder:

As the world continues to confront the challenges of the COVID-19 pandemic, financial markets, it seems, are enjoying a respite from fear. U.S. markets rallied this summer despite many challenges that weighed down economic activity, including the public health impact of the pandemic, high unemployment, and tensions related to calls for racial equity. In this context, Putnam continues to pursue superior investment performance for you and your fellow shareholders while also working toward its goals of improving diversity and inclusion within its organization.

We would like to take this opportunity to thank Robert E. Patterson, who retired as a Trustee on June 30, 2020, for his 36 years of service. We will miss Bob’s experienced judgment and insights, and we wish him well. We are also pleased to welcome Mona K. Sutphen to the Board. Ms. Sutphen brings extensive professional and directorship experience to her role as a Trustee.

As always, thank you for investing with Putnam.

How was the environment for stock market investing during the reporting period?

When the period began in August 2019, the stock market was somewhat turbulent, mainly due to investor concerns over the ongoing U.S.–China trade conflict. Although the Federal Reserve [the Fed] had just reduced short-term interest rates for the first time since 2008, investor sentiment was dampened. The Fed described the rate cut as a “mid-cycle adjustment,” and investors assumed it was not the start of a prolonged easing cycle. By the close of August, trade conflict headlines had sent the Dow Jones Industrial Average to its biggest intraday drop of the year.

Stocks generally performed well for the remainder of 2019. The Fed cut interest rates two more times, and the S&P 500 Index closed at a record high following the October rate cut. In December, the Fed noted a favorable economic outlook for 2020, and all three major U.S. stock market indexes set new record highs. Stocks of large growth companies were among the best performers, gaining more than 36% for the 2019 calendar year.

The start of 2020 was relatively calm for U.S. stocks, and major indexes reached record

Growth Opportunities Fund 3

highs in early February. In the following weeks, however, market conditions changed dramatically. As the COVID-19 pandemic began its global spread, financial markets encountered unprecedented bouts of volatility. Manufacturing and services activities ceased across the globe as businesses were closed and stay-at-home orders went into effect. All three major U.S. stock indexes fell into bear market territory, which is defined as a 20% drop from a previous high. In the first three months of 2020, U.S. large-cap growth stocks, the focus of this fund, declined more than 14%.

Just as surprising to many investors was the rebound in stocks in the final four months of the period. In April, major stock indexes posted their best monthly percentage gains since 1987, and stocks advanced through July. However, worries persisted about the pandemic, especially as COVID-19 cases began to surge in the summer.

How did the fund perform in this environment?

For the 12-month period, the fund posted a return of 32.32%, outperforming its benchmark, the Russell 1000 Growth Index, which returned 29.84%. The fund also outperformed its Lipper peer group, Large-Cap Growth Funds, which had an average gain of 27.08%.

Could you provide some examples of stocks that helped the fund’s performance?

Our investment in DocuSign was the top contributor to performance for the 12-month reporting period. DocuSign enables hundreds of millions of users to digitally prepare, execute, act on, and manage agreements from practically any device worldwide. These services are even more relevant as a result of the COVID-19 pandemic because in-person meetings have become rare or nonexistent. DocuSign’s brand has become synonymous with the e-signature market, and its double-digit free cash flow margins and sustained 25% billings growth support our case for keeping it in the portfolio.

Another top performer — and beneficiary of pandemic-related changes — was PayPal Holdings. This company enables businesses and individuals to electronically transfer money and has benefited from the rapid adoption of digital payments. PayPal has experienced consistent, mid-teens year-over-year growth in active accounts. We are also optimistic about the potential of Venmo, the company’s app that provides peer-to-peer payments. Growth for Venmo has been strong, especially among younger users who appreciate the ability to send cash quickly between friends.

Another performance highlight was Microsoft. We are particularly focused on the growth potential of Azure, Microsoft’s cloud-computing business. Businesses are increasingly shifting their information technology systems from on-premise databases to cloud storage. The benefits are widely recognized and include reduced costs, enhanced data security, better collaboration, and greater flexibility for employees accessing company documents and data. Microsoft has been making impressive competitive gains with its cloud business. Azure has delivered solid revenue growth, and we believe it can achieve an annual growth rate of more than 30% through 2023 — a figure not yet priced into the stock, in our view.

What were some holdings that detracted from performance for the period?

Among the top detractors was Live Nation Entertainment, which promotes live events, operates entertainment venues, and sells tickets for events worldwide. Early in the period, Live Nation’s stock was under pressure due to an investigation by the Department of Justice

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into its ticketing practices. The issue was resolved in December 2019, but the company experienced significant revenue declines when the COVID-19 pandemic forced the cancellation of live events. The stock remained in the portfolio at period end. In our view, Live Nation continues to be well positioned as the global leader in what we expect will continue to be a rapidly growing market.

Also detracting from performance was IQVIA, a contract research organization (CRO) with a leadership position in its industry. CROs provide support services for research and clinical trials in industries such as biotechnology and medical devices. While we believe IQVIA should continue to expand its market share, we sold it from the portfolio by period-end. We anticipated weakness in CRO end markets driven by logistical complications from COVID-19 and an intense industry focus on the virus at the expense of other drug research.

Another underperforming holding was Planet Fitness, one of the largest fitness club franchises in the United States. The stock struggled due to COVID-19-related headwinds such as gym closures, consumer sanitation concerns, and a growing preference for working out at home. While we still have a favorable view of the core characteristics of this business, we sold the position in favor of businesses that we believe have fewer short- and medium-term challenges.

As the fund begins a new fiscal year, what is your outlook?

There is still much uncertainty surrounding COVID-19, but it is becoming clear that there will be notable differences between our pre- and post-pandemic worlds. Across the business landscape, we are already observing significant changes in areas such as consumer purchasing preferences, human communication, and workflows.

Once the dust settles, we believe many companies will be beneficiaries. In our research, we are looking beyond those businesses that have simply benefited from a closed economy. To meet our investment criteria, they must offer strong and durable growth potential over the long term. We have identified many businesses that have been resilient during the COVID-19 crisis and that, in our view, are likely to become stronger in the aftermath.

Thank you for your time and insights today.

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

6 Growth Opportunities Fund

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended July 31, 2020, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance information as of the most recent calendar quarter-end and 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, R5, R6, and 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 7/31/20


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year
Class A (10/2/95)
Before sales charge	9.43%	405.32%	17.59%	129.96%	18.12%	89.06%	23.65%	32.32%
After sales charge	9.17	376.26	16.89	116.74	16.73	78.19	21.24	24.72
Class B (8/1/97)
Before CDSC	9.15	375.85	16.88	121.53	17.24	84.86	22.73	31.36
After CDSC	9.15	375.85	16.88	119.53	17.03	81.86	22.06	26.36
Class C (2/1/99)
Before CDSC	9.11	368.88	16.71	121.54	17.24	84.88	22.73	31.31
After CDSC	9.11	368.88	16.71	121.54	17.24	84.88	22.73	30.31
Class R (1/21/03)
Net asset value	9.16	392.98	17.30	127.13	17.83	87.65	23.34	31.99
Class R5 (7/2/12)
Net asset value	9.70	420.53	17.94	133.35	18.47	90.62	23.99	32.66
Class R6 (7/2/12)
Net asset value	9.73	424.83	18.03	134.49	18.58	91.22	24.12	32.80
Class Y (7/1/99)
Net asset value	9.68	418.08	17.88	132.87	18.42	90.45	23.95	32.63

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A shares reflect the deduction of the maximum 5.75% sales charge levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable 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, R5, R6, and Y shares have no initial sales charge or CDSC. Performance for class B, C, 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. Performance for class R5 and R6 shares prior to their inception is derived from the historical performance of class Y shares and has not been adjusted for the lower investor servicing fees applicable to class R5 and R6 shares; had it, returns would have been higher.

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

The fund has had performance fee adjustments that may have had a positive or negative impact on returns.

Class B share performance reflects conversion to class A shares after eight years.

Class C share performance reflects conversion to class A shares after 10 years.

8 Growth Opportunities Fund

Comparative index returns For periods ended 7/31/20


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year
Russell 1000 Growth Index	9.78%	392.85%	17.29%	117.74%	16.84%	76.76%	20.91%	29.84%
Lipper Large-Cap Growth
Funds category average^*	9.60	340.74	15.88	101.95	15.01	70.26	19.31	27.08

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 7/31/20, there were 633, 596, 536, 420, and 72 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 C shares would have been valued at $47,585 and $46,888, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class R, R5, R6, and Y shares would have been valued at $49,298, $52,053, $52,483 and $51,808, respectively.

Fund price and distribution information For the 12-month period ended 7/31/20


Distributions	Class A		Class B	Class C	Class R	Class R5	Class R6	Class Y
Number	1		1	1	1	1	1	1
Income	—		—	—	—	—	—	—
Capital gains
Long-term gains	$1.497		$1.497	$1.497	$1.497	$1.497	$1.497	$1.497
Short-term gains	—		—	—	—	—	—	—
Total	$1.497		$1.497	$1.497	$1.497	$1.497	$1.497	$1.497
	Before	After	Net	Net	Net	Net	Net	Net
	sales	sales	asset	asset	asset	asset	asset	asset
Share value	charge	charge	value	value	value	value	value	value
7/31/19	$37.72	$40.02	$31.36	$31.98	$36.23	$39.82	$39.72	$39.49
7/31/20	48.00	50.93	39.29	40.09	45.91	50.91	50.83	50.46

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A shares, if applicable, do not take into account any sales charge levied at the time of purchase. After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (5.75% for class A shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

Growth Opportunities Fund 9

Fund performance as of most recent calendar quarter Total return for periods ended 6/30/20


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year
Class A (10/2/95)
Before sales charge	9.15%	403.69%	17.55%	119.92%	17.07%	80.46%	21.75%	25.34%
After sales charge	8.89	374.73	16.85	107.27	15.69	70.09	19.37	18.14
Class B (8/1/97)
Before CDSC	8.86	374.47	16.85	111.86	16.20	76.46	20.84	24.40
After CDSC	8.86	374.47	16.85	109.86	15.98	73.46	20.15	19.40
Class C (2/1/99)
Before CDSC	8.83	367.37	16.67	111.84	16.20	76.38	20.82	24.38
After CDSC	8.83	367.37	16.67	111.84	16.20	76.38	20.82	23.38
Class R (1/21/03)
Net asset value	8.88	391.37	17.26	117.28	16.79	79.14	21.45	25.02
Class R5 (7/2/12)
Net asset value	9.41	419.00	17.90	123.14	17.41	81.95	22.08	25.65
Class R6 (7/2/12)
Net asset value	9.45	423.12	17.99	124.23	17.53	82.46	22.20	25.78
Class Y (7/1/99)
Net asset value	9.39	416.55	17.84	122.69	17.37	81.81	22.05	25.64

See the discussion following the fund performance table on page 8 for information about the calculation of fund performance.

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 R	Class R5	Class R6	Class Y
Total annual operating expenses for the
fiscal year ended 7/31/19	1.03%	1.78%	1.78%	1.28%	0.76%	0.66%	0.78%
Annualized expense ratio for the
six-month period ended 7/31/20^*†	1.05%	1.80%	1.80%	1.30%	0.79%	0.69%	0.80%

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.

^*Expense ratios for each class are for the fund’s most recent fiscal half year. As a result of this, ratios may differ from expense ratios based on one-year data in the financial highlights.

^†Includes an increase of 0.06% from annualizing the performance fee adjustment for the six months ended 7/31/20.

10 Growth Opportunities Fund

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in each class of the fund from 2/1/20 to 7/31/20. 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 R	Class R5	Class R6	Class Y
Expenses paid per $1,000^*†	$5.70	$9.75	$9.75	$7.05	$4.29	$3.75	$4.35
Ending value (after expenses)	$1,184.00	$1,179.50	$1,179.50	$1,182.30	$1,185.30	$1,186.20	$1,185.30

^*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 7/31/20. 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 7/31/20, use the following calculation method. To find the value of your investment on 2/1/20, 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 R	Class R5	Class R6	Class Y
Expenses paid per $1,000^*†	$5.27	$9.02	$9.02	$6.52	$3.97	$3.47	$4.02
Ending value (after expenses)	$1,019.64	$1,015.91	$1,015.91	$1,018.40	$1,020.93	$1,021.43	$1,020.89

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

Growth Opportunities Fund 11

Consider these risks before investing

Growth stocks may be more susceptible to earnings disappointments, and the market may not favor growth-style investing. The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political, or financial market conditions; investor sentiment and market perceptions; government actions; geopolitical events or changes; and factors related to a specific issuer, geography, industry, or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. Our investment techniques, analyses, and judgments may not produce the outcome we intend. The investments we select for the fund may not perform as well as other securities that we do not select for the fund. You can lose money by investing in the fund.

12 Growth Opportunities Fund

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.

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 closed to new investments and are only available by exchange from another Putnam fund or through dividend and/or capital gains reinvestment. They are not subject to an initial sales charge and 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 R shares are not subject to an initial sales charge or CDSC and are only available to employer-sponsored retirement plans.

Class R5 shares are not subject to an initial sales charge or CDSC and carry no 12b-1 fee. They are only available to employer-sponsored retirement plans.

Class R6 shares are not subject to an initial sales charge or CDSC and carry no 12b-1 fee. They are generally only available to employer-sponsored retirement plans, corporate and institutional clients, and clients in other approved programs.

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

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

ICE BofA (Intercontinental Exchange Bank of America) 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.

Russell 1000 Growth Index is an unmanaged index of those companies in the large-cap Russell 1000 Index chosen for their growth orientation.

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.

ICE Data Indices, LLC (“ICE BofA”), used with permission. ICE BofA permits use of the ICE BofA indices and related data on an “as is” basis; makes no warranties regarding same; does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the ICE BofA indices or any data included in, related to, or derived

Growth Opportunities Fund 13

therefrom; assumes no liability in connection with the use of the foregoing; and does not sponsor, endorse, or recommend Putnam Investments, or any of its products or services.

Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.

Lipper, a Refinitiv company, 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.

Other information for shareholders

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, 2020, are available in the Individual Investors section of putnam.com and on the Securities and Exchange Commission (SEC) 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-PORT within 60 days of the end of such fiscal quarter. Shareholders may obtain the fund’s Form N-PORT on the SEC’s website at www.sec.gov.

Prior to its use of Form N-PORT, the fund filed its complete schedule of its portfolio holdings with the SEC on Form N-Q, which is available online at www.sec.gov.

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 July 31, 2020, Putnam employees had approximately $483,000,000 and the Trustees had approximately $75,000,000 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.

14 Growth Opportunities Fund

Liquidity risk management program

Putnam, as the administrator of the fund’s liquidity risk management program (appointed by the Board of Trustees), presented the first annual report on the program to the Trustees in April 2020. The report covered the structure of the program, including the program documents and related policies and procedures adopted to comply with Rule 22e-4 under the Investment Company Act of 1940, and reviewed the operation of the program from December 2018 through March 2020. The report included a description of the annual liquidity assessment of the fund that Putnam performed in November 2019. The report noted that there were no material compliance exceptions identified under Rule 22e-4 during the period. The report included a review of the governance of the program and the methodology for classification of the fund’s investments. The report also included a discussion of liquidity monitoring during the period, including during the market liquidity challenges caused by the COVID-19 pandemic, and the impact those challenges had on the liquidity of the fund’s investments. Putnam concluded that the program has been operating effectively and adequately to ensure compliance with Rule 22e-4.

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.

Growth Opportunities Fund 15

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, LLC (“Putnam Management”) and the sub-management contract with respect to your fund between Putnam Management and its affiliate, Putnam Investments Limited (“PIL”). The Board, with the assistance of its Contract Committee, requests and evaluates all information it deems reasonably necessary under the circumstances in connection with its annual contract review. The Contract Committee consists solely of Trustees who are not “interested persons” (as this term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of The Putnam Funds (“Independent Trustees”).

At the outset of the review process, members of the Board’s independent staff and independent legal counsel considered any possible changes to the annual contract review materials furnished to the Contract Committee during the course of the previous year’s review and, as applicable, identified those changes to Putnam Management. Following these discussions and in consultation with the Contract Committee, the Independent Trustees’ independent legal counsel requested that Putnam Management and its affiliates furnish specified information, together with any additional information that Putnam Management considered relevant, to the Contract Committee. Over the course of several months ending in June 2020, 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. Throughout this process, the Contract Committee was assisted by the members of the Board’s independent staff and by independent legal counsel for The Putnam Funds and the Independent Trustees.

In May 2020, the Contract Committee met in executive session to discuss and consider its recommendations with respect to the continuance of the contracts. At the Trustees’ June 2020 meeting, the Contract Committee met in executive session with the other Independent Trustees to review a summary of the key financial, performance and other data that the Contract Committee considered in the course of its review. The Contract Committee then presented its written report, which summarized the key factors that the Committee had considered and set forth its recommendations. The Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management and sub-management contracts, effective July 1, 2020. (Because PIL is an affiliate of Putnam Management and Putnam Management remains fully responsible for all services provided by PIL, the Trustees have not attempted to evaluate PIL as a separate entity, and all subsequent references to Putnam Management below should be deemed to include reference to PIL 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, the costs incurred by Putnam Management in providing services to the fund, and the application of certain reductions and waivers noted below; and

• That the fee schedule in effect for your fund 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. For example, with certain exceptions primarily involving newly

16 Growth Opportunities Fund

launched or repositioned funds, the current fee arrangements under the vast majority of the funds’ management contracts were first implemented at the beginning of 2010 following extensive review by the Contract Committee and discussions with representatives of Putnam Management, as well as approval by shareholders.

Management fee schedules and total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints. The Trustees also reviewed the total expenses of each Putnam fund, recognizing that in most cases management fees represented the major, but not the sole, determinant of total costs to fund shareholders. (Two funds have implemented so-called “all-in” management fees covering substantially all routine fund operating costs.)

In reviewing fees and expenses, the Trustees generally focus their attention on material changes in circumstances — for example, changes in assets under management, changes in a fund’s investment strategy, changes in Putnam Management’s operating costs or profitability, 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 indicate that changes to the management fee schedule for your fund would be appropriate at this time.

Under its management contract, your fund has the benefit of breakpoints in its management fee schedule that provide shareholders with economies of scale in the form of reduced fee levels as assets under management in the Putnam family of funds increase. The Trustees concluded that the fee schedule in effect for your fund represented an appropriate sharing of economies of scale between fund shareholders and Putnam Management.

In addition, your fund’s 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. In the course of reviewing investment performance, the Trustees examined the operation of your fund’s performance fees and concluded that these fees were operating effectively to align further Putnam Management’s economic interests with those of the fund’s shareholders.

As in the past, the Trustees also focused on the competitiveness of each fund’s total expense ratio. In order to support the effort to have fund expenses meet competitive standards, the Trustees and Putnam Management and the funds’ investor servicing agent, Putnam Investor Services, Inc. (“PSERV”), have implemented expense limitations that were in effect during your fund’s fiscal year ending in 2019. These expense limitations were: (i) a contractual expense limitation applicable to specified open-end funds, including your fund, of 25 basis points on investor servicing fees and expenses and (ii) a contractual expense limitation applicable to specified open-end funds, including your fund, of 20 basis points on so-called “other expenses” (i.e., all expenses exclusive of management fees, distribution fees, investor servicing fees, investment-related expenses, interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses). These expense limitations attempt to maintain competitive expense levels for the funds. Most funds, including your fund, had sufficiently low expenses that these expense limitations were not operative during their fiscal years ending in 2019. Putnam Management and PSERV have agreed to maintain these expense limitations until at least November 30, 2021. The support of Putnam Management and PSERV for these expense limitation arrangements was an important factor in the Trustees’ decision to approve the continuance of your fund’s management and sub-management contracts.

The Trustees reviewed comparative fee and expense information for a custom group of competitive funds selected by Broadridge Financial Solutions, Inc. (“Broadridge”). This comparative information included your fund’s percentile ranking for effective management fees and total expenses (excluding any applicable 12b-1 fees), which provides a general indication of your fund’s relative standing. In the custom peer group, your fund ranked in the first 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 third quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2019. The first quintile represents the least expensive funds and the fifth quintile the most expensive funds. The fee and expense data reported by

Growth Opportunities Fund 17

Broadridge as of December 31, 2019 reflected the most recent fiscal year-end data available in Broadridge’s database at that time.

In connection with their review of fund management fees and total expenses, 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 the revenues, expenses and profitability of Putnam Management and its affiliates, 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 between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the Putnam funds at that time.

The information examined by the Trustees in connection with their annual contract review for the Putnam funds included information regarding services provided and fees charged by Putnam Management and its affiliates to other clients, including defined benefit pension and profit-sharing plans, sub-advised mutual funds, private funds sponsored by affiliates of Putnam Management, and model-only separately managed accounts. This information included, in cases where a product’s investment strategy corresponds with a fund’s strategy, comparisons of those fees with fees charged to the Putnam funds, as well as an assessment of the differences in the services provided to these clients as compared to the services provided to the Putnam funds. The Trustees observed that the differences in fee rates between these clients and the Putnam 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, among other things, historical competitive forces operating in separate marketplaces. The Trustees considered the fact that in many cases fee rates across different asset classes are higher on average for mutual funds than for other clients, and the Trustees also considered the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to its other 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 Putnam Management’s investment process and performance by the work of the investment oversight committees of the Trustees and the full Board of Trustees, which meet on a regular basis with individual portfolio managers and with senior management 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 that, in the aggregate, 2019 was a strong year of performance for The Putnam Funds, with the Putnam funds, on an asset-weighted basis, ranking in the top quartile of their Lipper Inc. (“Lipper”) peers for the year ended December 31, 2019. For those funds that are evaluated based on their total returns versus selected investment benchmarks, the Trustees observed that the funds, on an asset-weighted-basis, delivered a gross return that was 2.3% ahead of their benchmarks in 2019. In addition to the performance of the individual Putnam funds, the Trustees considered, as they had in prior years, the performance of The Putnam Fund complex versus competitor fund complexes. In this regard, the Trustees observed that The Putnam Funds’ relative performance, as reported in the Barron’s/Lipper Fund Families survey, was exceptionally strong over both the short and long term, with The Putnam Funds ranking as the

18 Growth Opportunities Fund

8th best performing mutual fund complex out of 55 complexes for the one-year period ended December 31, 2019 and the 8th best performing mutual fund complex out of 45 complexes for the ten-year period, with 2019 marking the third consecutive year that The Putnam Funds have ranked in the top ten fund complexes for the ten-year period. The Trustees also noted that The Putnam Funds ranked 26th out of 52 complexes for the five-year period ended December 31, 2019. In addition to the Barron’s/Lipper Fund Families Survey, the Trustees also considered the funds’ ratings assigned by Morningstar Inc., noting that 22 of the funds were four- or five-star rated at the end of 2019 and that this included five funds that had achieved a five-star rating. They also noted, however, the disappointing investment performance of some funds for periods ended December 31, 2019 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 closely the performance of those funds, including the effectiveness of any efforts Putnam Management has undertaken to address underperformance and whether additional actions to address areas of underperformance are warranted.

For purposes of the Trustees’ evaluation of the Putnam funds’ investment performance, the Trustees generally focus on a competitive industry ranking of each fund’s total net return over a one-year, three-year and five-year period. For a number of Putnam funds with relatively unique investment mandates for which Putnam Management informed the Trustees that meaningful competitive performance rankings are not considered to be available, the Trustees evaluated performance based on their total gross and net returns and comparisons of those returns with the returns of selected investment benchmarks. 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 peer group (Lipper Large-Cap Growth Funds) for the one-year, three-year and five-year periods ended December 31, 2019 (the first quartile representing the best-performing funds and the fourth quartile the worst-performing funds):


One-year period	1st
Three-year period	1st
Five-year period	1st

Over the one-year, three-year and five-year periods ended December 31, 2019, there were 630, 574 and 520 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.)

The Trustees considered Putnam Management’s continued efforts to support fund performance through initiatives including structuring compensation for portfolio managers and research analysts to enhance accountability for fund performance, emphasizing accountability in the portfolio management process, and affirming its commitment to a fundamental-driven approach to investing. The Trustees noted further that Putnam Management had made selective hires and internal promotions in 2019 to strengthen its investment team.

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 dollars generated by these means are used predominantly to acquire brokerage and research services (including third-party research and market data) that enhance Putnam Management’s investment capabilities and supplement Putnam Management’s internal research efforts. The Trustees noted that, in 2019, they had approved the elimination of a fund expense recapture program, whereby a portion of available soft dollars were used to pay fund expenses, and that the amount of commissions allocated to that program were instead used to increase, by a corresponding amount, the budget allocated for execution services. The Trustees indicated their continued intent to monitor regulatory and industry developments in this area with the assistance of their Brokerage Committee. In

Growth Opportunities Fund 19

addition, with the assistance of their Brokerage Committee, the Trustees indicated their continued intent to monitor the allocation of the Putnam funds’ brokerage in order to ensure that the principle of seeking best price and execution remains paramount in the portfolio trading process.

Putnam Management may also receive benefits from payments that the funds make to Putnam Management’s affiliates for investor or distribution services. In conjunction with the annual review of your fund’s management and sub-management contracts, the Trustees reviewed your fund’s investor servicing agreement with PSERV and its distributor’s contracts and distribution plans with Putnam Retail Management Limited Partnership (“PRM”), both of which are affiliates of Putnam Management. The Trustees concluded that the fees payable by the funds to PSERV and PRM, as applicable, for such services are fair and reasonable in relation to the nature and quality of such services, the fees paid by competitive funds, and the costs incurred by PSERV and PRM, as applicable, in providing such services. Furthermore, the Trustees were of the view that the services provided were required for the operation of the funds, and that they were of a quality at least equal to those provided by other providers.

20 Growth Opportunities Fund

Audited 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 audited 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.

Growth Opportunities Fund 21

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Putnam Investment Funds
and Shareholders of Putnam Growth Opportunities Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the fund’s portfolio, of Putnam Growth Opportunities Fund (one of the funds constituting Putnam Investment Funds, referred to hereafter as the “Fund”) as of July 31, 2020, the related statement of operations and changes in net assets for the year ended July 31, 2020, including the related notes, and the financial highlights for the year ended July 31, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2020, the results of its operations, changes in its net assets and the financial highlights for the year ended July 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended July 31, 2019 and the financial highlights for each of the periods ended on or prior to July 31, 2019 (not presented herein, other than the statement of changes in net assets and the financial highlights) were audited by other auditors whose report dated September 6, 2019 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2020 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audit provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
September 8, 2020

We have served as the auditor of one or more investment companies in the Putnam Investments family of mutual funds since at least 1957. We have not been able to determine the specific year we began serving as auditor.

22 Growth Opportunities Fund

The fund’s portfolio 7/31/20


COMMON STOCKS (98.5%)*	Shares	Value
Aerospace and defense (1.5%)
Northrop Grumman Corp.	252,400	$82,032,524
TransDigm Group, Inc.	76,247	32,906,680
		114,939,204
Automobiles (0.5%)
Tesla Motors, Inc. ^†	26,600	38,058,216
		38,058,216
Biotechnology (3.3%)
Regeneron Pharmaceuticals, Inc. ^†	128,200	81,031,374
Seattle Genetics, Inc. ^†	375,200	62,384,504
Vertex Pharmaceuticals, Inc. ^†	399,900	108,772,800
		252,188,678
Capital markets (2.2%)
London Stock Exchange Group PLC (United Kingdom)	479,828	53,520,589
S&P Global, Inc.	325,100	113,866,275
		167,386,864
Chemicals (1.8%)
Linde PLC	214,100	52,478,051
Sherwin-Williams Co. (The)	125,135	81,077,469
		133,555,520
Commercial services and supplies (1.2%)
Waste Connections, Inc.	876,802	89,758,221
		89,758,221
Entertainment (0.8%)
Live Nation Entertainment, Inc. ^{† S}	798,559	37,380,547
Netflix, Inc. ^†	48,800	23,857,344
		61,237,891
Equity real estate investment trusts (REITs) (2.9%)
American Tower Corp.	564,700	147,606,933
SBA Communications Corp.	241,400	75,205,756
		222,812,689
Food and staples retail (0.6%)
Walmart, Inc.	372,127	48,153,234
		48,153,234
Health-care equipment and supplies (6.3%)
Danaher Corp.	814,144	165,922,547
DexCom, Inc. ^†	224,936	97,968,625
IDEXX Laboratories, Inc. ^{† S}	403,478	160,483,375
Quidel Corp. ^†	200,020	56,499,649
		480,874,196
Health-care providers and services (2.5%)
UnitedHealth Group, Inc.	618,700	187,329,986
		187,329,986
Hotels, restaurants, and leisure (0.9%)
Chipotle Mexican Grill, Inc. ^†	59,800	69,078,568
		69,078,568

Growth Opportunities Fund 23


COMMON STOCKS (98.5%)* cont.	Shares	Value
Household durables (—%)
HC Brillant Services GmbH (acquired 8/2/13, cost $194) (Private)
(Germany) ^{† ∆∆ F}	292	$258
		258
Industrial conglomerates (0.8%)
Roper Technologies, Inc.	131,298	56,779,820
		56,779,820
Insurance (0.6%)
AIA Group, Ltd. (Hong Kong)	4,800,450	43,018,917
		43,018,917
Interactive media and services (6.9%)
Alphabet, Inc. Class C ^†	228,000	338,114,880
Facebook, Inc. Class A ^†	741,403	188,071,699
		526,186,579
Internet and direct marketing retail (10.4%)
Alibaba Group Holding, Ltd. ADR (China) ^†	250,800	62,955,816
Amazon.com, Inc. ^†	208,077	658,497,120
Booking Holdings, Inc. ^†	42,900	71,305,377
		792,758,313
IT Services (11.3%)
Edenred (France)	1,162,338	57,909,248
Fidelity National Information Services, Inc.	804,503	117,706,834
Mastercard, Inc. Class A	585,200	180,551,756
PayPal Holdings, Inc. ^†	1,427,600	279,909,532
Visa, Inc. Class A ^S	1,178,600	224,405,440
		860,482,810
Life sciences tools and services (1.5%)
Lonza Group AG (Switzerland)	184,091	114,912,076
		114,912,076
Media (1.8%)
Charter Communications, Inc. Class A ^{† S}	233,716	135,555,280
		135,555,280
Personal products (1.3%)
Estee Lauder Cos., Inc. (The) Class A	504,300	99,619,422
		99,619,422
Pharmaceuticals (2.0%)
Eli Lilly and Co.	796,800	119,751,072
Merck & Co., Inc.	415,100	33,307,624
		153,058,696
Professional services (1.7%)
CoStar Group, Inc. ^†	151,414	128,665,561
		128,665,561
Road and rail (1.1%)
Union Pacific Corp.	488,425	84,668,474
		84,668,474
Semiconductors and semiconductor equipment (3.4%)
NVIDIA Corp.	402,700	170,982,393
Texas Instruments, Inc.	705,000	89,922,750
		260,905,143

24 Growth Opportunities Fund


COMMON STOCKS (98.5%)* cont.	Shares	Value
Software (17.6%)
Adobe, Inc. ^†	416,236	$184,941,980
Avalara, Inc. ^†	161,870	21,763,422
DocuSign, Inc. ^†	379,071	82,193,965
Dynatrace, Inc. ^†	1,174,700	49,137,701
Everbridge, Inc. ^{† S}	431,077	61,557,796
Microsoft Corp.	3,683,300	755,113,333
RingCentral, Inc. Class A ^†	205,804	59,738,727
Salesforce.com, Inc. ^†	656,429	127,905,191
		1,342,352,115
Specialty retail (1.6%)
Home Depot, Inc. (The)	463,811	123,137,182
		123,137,182
Technology hardware, storage, and peripherals (9.2%)
Apple, Inc.	1,647,301	700,168,817
		700,168,817
Textiles, apparel, and luxury goods (2.8%)
lululemon athletica, Inc. (Canada) ^†	227,600	74,104,284
NIKE, Inc. Class B	1,423,728	138,970,089
		213,074,373
Total common stocks (cost $3,823,113,063)		$7,500,717,103


	Expiration	Strike
WARRANTS (—%)* ^†	date	price	Warrants	Value
Neuralstem, Inc. Ser. K (acquired 1/3/14 and
4/20/17, cost $—) ^∆∆	1/9/22	$42.00	6,349	$—
Total warrants (cost $—)				$—


	Principal amount/
SHORT-TERM INVESTMENTS (6.8%)*		shares	Value
Putnam Cash Collateral Pool, LLC 0.22% ^d	Shares	393,564,535	$393,564,535
Putnam Short Term Investment Fund Class P 0.29% ^L	Shares	121,307,244	121,307,244
U.S. Treasury Bills 0.146%, 9/22/20		$2,978,000	2,977,586
U.S. Treasury Bills 0.144%, 9/15/20		691,000	690,920
U.S. Treasury Bills 0.141%, 10/8/20 ^∆		1,516,000	1,515,722
Total short-term investments (cost $520,055,638)			$520,056,007


TOTAL INVESTMENTS
Total investments (cost $4,343,168,701)	$8,020,773,110

Key to holding’s abbreviations


ADR	American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank
OTC	Over-the-counter

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 August 1, 2019 through July 31, 2020 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures.

^*Percentages indicated are based on net assets of $7,613,734,673.

Growth Opportunities Fund 25

^†This security is non-income-producing.

^∆∆This security is restricted with regard to public resale. The total fair value of this security and any other restricted securities (excluding 144A securities), if any, held at the close of the reporting period was $258, or less than 0.1% of net assets.

^∆This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivative contracts at the close of the reporting period. Collateral at period end totaled $341,932 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 8).

^dAffiliated company. See Notes 1 and 5 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.

^FThis security is valued by Putnam Management at fair value following procedures approved by the Trustees. Securities are classified as Level 3 for 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).

^LAffiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

^SSecurity on loan, in part or in entirety, at the close of the reporting period (Note 1).

At the close of the reporting period, the fund maintained liquid assets totaling $1,216,865 to cover certain derivative contracts.

Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.

The dates shown on debt obligations are the original maturity dates.


OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/20
		Upfront
		premium	Termina-	Payments	Total return	Unrealized
Swap counterparty/		received	tion	received (paid)	received by	appreciation/
Notional amount	Value	(paid)	date	by fund	or paid by fund	(depreciation)
Goldman Sachs International
$38,893,525	$37,676,660	$—	12/15/25	(1 month USD-	A basket	$(1,221,437)
				LIBOR-BBA plus	(GSCBPAND) of
				0.35%) — Monthly	common stocks —
					Monthly*
Upfront premium received		—		Unrealized appreciation		—
Upfront premium (paid)		—		Unrealized (depreciation)		(1,221,437)
Total		$—		Total		$(1,221,437)

^*The 50 largest components, and any individual component greater than 1% of basket value, are shown below.


A BASKET (GSCBPAND) OF COMMON STOCKS
				Percentage
Common stocks	Sector	Shares	Value	value
Gap, Inc. (The)	Consumer cyclicals	82,059	$1,097,123	2.91%
Estee Lauder Cos., Inc. (The) Class A	Consumer staples	5,389	1,064,450	2.83%
Darden Restaurants, Inc.	Consumer staples	13,879	1,053,452	2.80%
L Brands, Inc.	Consumer cyclicals	42,685	1,041,944	2.77%
Ford Motor Co.	Consumer cyclicals	156,869	1,036,902	2.75%
Trip.com Group, Ltd. ADR (China)	Consumer cyclicals	38,077	1,035,704	2.75%
JetBlue Airways Corp.	Transportation	99,138	1,025,086	2.72%
Booking Holdings, Inc.	Consumer cyclicals	612	1,017,621	2.70%
American Airlines Group, Inc.	Transportation	91,359	1,015,908	2.70%
MGM Resorts International	Consumer cyclicals	62,785	1,010,217	2.68%
Live Nation Entertainment, Inc.	Consumer cyclicals	21,307	997,393	2.65%
Spirit Airlines, Inc.	Transportation	62,936	995,016	2.64%

26 Growth Opportunities Fund


A BASKET (GSCBPAND) OF COMMON STOCKS cont.
				Percentage
Common stocks	Sector	Shares	Value	value
United Airlines Holdings, Inc.	Transportation	31,687	$994,337	2.64%
Delta Air Lines, Inc.	Transportation	39,648	990,001	2.63%
Penn National Gaming, Inc.	Consumer cyclicals	29,100	985,032	2.61%
Hilton Worldwide Holdings, Inc.	Consumer cyclicals	13,079	981,589	2.61%
Marriott International, Inc./MD Class A	Consumer cyclicals	11,649	976,437	2.59%
Expedia Group, Inc.	Consumer cyclicals	11,972	969,823	2.57%
Royal Caribbean Cruises, Ltd.	Consumer cyclicals	19,846	966,710	2.57%
Southwest Airlines Co.	Transportation	31,169	962,796	2.56%
Wynn Resorts, Ltd.	Consumer cyclicals	13,233	958,445	2.54%
Norwegian Cruise Line Holdings, Ltd.	Consumer cyclicals	69,952	954,151	2.53%
Las Vegas Sands Corp.	Consumer cyclicals	21,831	952,698	2.53%
Macy’s, Inc.	Consumer cyclicals	154,101	933,850	2.48%
Boeing Co. (The)	Capital goods	5,866	926,869	2.46%
Nordstrom, Inc.	Consumer cyclicals	66,787	914,309	2.43%
Dave & Buster’s Entertainment, Inc.	Consumer staples	73,957	912,626	2.42%
Alaska Air Group, Inc.	Transportation	25,491	877,906	2.33%
Caesars Entertainment, Inc.	Consumer cyclicals	27,288	847,306	2.25%
Brinker International, Inc.	Consumer staples	31,473	846,298	2.25%
Huazhu Group, Ltd. ADR (China)	Consumer cyclicals	22,760	781,334	2.07%
Texas Roadhouse, Inc.	Consumer staples	12,573	706,480	1.88%
Cheesecake Factory, Inc. (The)	Consumer staples	24,227	581,441	1.54%
TripAdvisor, Inc.	Consumer staples	27,107	548,375	1.46%
Boyd Gaming Corp.	Consumer cyclicals	21,159	500,842	1.33%
Cracker Barrel Old Country Store, Inc.	Consumer staples	4,132	456,416	1.21%
Six Flags Entertainment Corp.	Consumer cyclicals	22,834	397,079	1.05%
Wyndham Hotels & Resorts, Inc.	Consumer cyclicals	8,575	378,693	1.01%
Bloomin’ Brands, Inc.	Consumer staples	32,646	376,082	1.00%
Hyatt Hotels Corp. Class A	Consumer cyclicals	7,794	374,121	0.99%
Melco Resorts & Entertainment, Ltd.	Consumer cyclicals	21,853	359,701	0.95%
ADR (Hong Kong)
Dine Brands Global, Inc.	Consumer staples	7,510	341,167	0.91%
Marriott Vacations Worldwide Corp.	Consumer cyclicals	3,125	264,527	0.70%
SeaWorld Entertainment, Inc.	Consumer cyclicals	17,549	253,938	0.67%
Wyndham Destinations, Inc.	Consumer cyclicals	9,498	252,659	0.67%
Allegiant Travel Co.	Transportation	2,108	236,136	0.63%
Copa Holdings SA Class A (Panama)	Transportation	5,546	229,836	0.61%
Red Rock Resorts, Inc. Class A	Consumer cyclicals	19,619	215,024	0.57%
Extended Stay America, Inc. (Units)	Consumer cyclicals	17,549	200,238	0.53%
Choice Hotels International, Inc.	Consumer cyclicals	2,144	180,171	0.48%

Growth Opportunities Fund 27

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*:
Communication services	$722,979,750	$—		$—
Consumer discretionary	1,236,106,652	—		258
Consumer staples	147,772,656	—		—
Financials	113,866,275	96,539,506		—
Health care	1,073,451,556	114,912,076		—
Industrials	474,811,280	—		—
Information technology	3,105,999,637	57,909,248		—
Materials	133,555,520	—		—
Real estate	222,812,689	—		—
Total common stocks	7,231,356,015	269,360,830		258

Warrants	—	—		—
Short-term investments	121,307,244	398,748,763		—
Totals by level	$7,352,663,259	$668,109,593		$258

			Valuation inputs
Other financial instruments:	Level 1	Level 2		Level 3
Total return swap contracts	$—	$(1,221,437)		$—
Totals by level	$—	$(1,221,437)		$—

* Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.

At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund’s net assets and were not considered a significant portion of the fund’s portfolio.

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

28 Growth Opportunities Fund

Statement of assets and liabilities 7/31/20


ASSETS
Investment in securities, at value, including $386,189,899 of securities on loan (Note 1):
Unaffiliated issuers (identified cost $3,828,296,922)	$7,505,901,331
Affiliated issuers (identified cost $514,871,779) (Notes 1 and 5)	514,871,779
Cash	10
Foreign currency (cost $28) (Note 1)	28
Dividends, interest and other receivables	2,083,858
Receivable for investments sold	19,853,493
Foreign tax reclaim	231,913
Receivable for shares of the fund sold	7,688,201
Prepaid assets	97,842
Total assets	8,050,728,455

LIABILITIES
Payable for investments purchased	25,440,115
Payable for shares of the fund repurchased	7,427,677
Payable for compensation of Manager (Note 2)	3,811,512
Payable for custodian fees (Note 2)	77,374
Payable for investor servicing fees (Note 2)	1,770,363
Payable for Trustee compensation and expenses (Note 2)	1,669,461
Payable for administrative services (Note 2)	22,884
Payable for distribution fees (Note 2)	1,394,997
Unrealized depreciation on OTC swap contracts (Note 1)	1,221,437
Collateral on securities loaned, at value (Note 1)	393,564,535
Other accrued expenses	593,427
Total liabilities	436,993,782

Net assets	$7,613,734,673

REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$3,708,288,645
Total distributable earnings (Note 1)	3,905,446,028
Total — Representing net assets applicable to capital shares outstanding	$7,613,734,673

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share
($5,756,280,257 divided by 119,911,764 shares)	$48.00
Offering price per class A share (100/94.25 of $48.00)^*	$50.93
Net asset value and offering price per class B share ($56,457,463 divided by 1,436,841 shares)^**	$39.29
Net asset value and offering price per class C share ($177,417,018 divided by 4,425,230 shares)^**	$40.09
Net asset value, offering price and redemption price per class R share
($15,852,194 divided by 345,261 shares)	$45.91
Net asset value, offering price and redemption price per class R5 share
($2,298,897 divided by 45,153 shares)	$50.91
Net asset value, offering price and redemption price per class R6 share
($456,204,098 divided by 8,975,801 shares)	$50.83
Net asset value, offering price and redemption price per class Y share
($1,149,224,746 divided by 22,773,714 shares)	$50.46

^*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.

Growth Opportunities Fund 29

Statement of operations Year ended 7/31/20


INVESTMENT INCOME
Dividends (net of foreign tax of $258,594)	$54,022,725
Interest (including interest income of $1,180,280 from investments in affiliated issuers) (Note 5)	1,189,560
Securities lending (net of expenses) (Notes 1 and 5)	350,861
Total investment income	55,563,146

EXPENSES
Compensation of Manager (Note 2)	37,644,189
Investor servicing fees (Note 2)	9,693,054
Custodian fees (Note 2)	81,270
Trustee compensation and expenses (Note 2)	251,773
Distribution fees (Note 2)	14,369,287
Administrative services (Note 2)	168,941
Other	1,495,010
Total expenses	63,703,524
Expense reduction (Note 2)	(59,841)
Net expenses	63,643,683

Net investment loss	(8,080,537)

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities from unaffiliated issuers (Notes 1 and 3)	238,877,446
Foreign currency transactions (Note 1)	(6,165)
Swap contracts (Note 1)	(9,036,598)
Written options (Note 1)	21,122,098
Total net realized gain	250,956,781
Change in net unrealized appreciation (depreciation) on:
Securities from unaffiliated issuers	1,634,728,006
Assets and liabilities in foreign currencies	10,849
Swap contracts	(1,221,437)
Written options	(12,526,920)
Total change in net unrealized appreciation	1,620,990,498

Net gain on investments	1,871,947,279

Net increase in net assets resulting from operations	$1,863,866,742

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

30 Growth Opportunities Fund

Statement of changes in net assets


INCREASE IN NET ASSETS	Year ended 7/31/20	Year ended 7/31/19
Operations
Net investment loss	$(8,080,537)	$(7,546,258)
Net realized gain on investments
and foreign currency transactions	250,956,781	234,545,977
Change in net unrealized appreciation of investments
and assets and liabilities in foreign currencies	1,620,990,498	504,388,553
Net increase in net assets resulting from operations	1,863,866,742	731,388,272
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class A	—	(115,982)
Class R5	—	(1,574)
Class R6	—	(639,038)
Class Y	—	(1,428,624)
From net realized long-term gain on investments
Class A	(180,478,648)	(275,572,737)
Class B	(2,612,038)	(5,395,987)
Class C	(7,288,168)	(11,302,727)
Class M	—	(2,531,148)
Class R	(495,177)	(773,600)
Class R5	(62,579)	(89,022)
Class R6	(11,638,169)	(11,416,205)
Class Y	(29,038,775)	(37,715,674)
Increase from capital share transactions (Note 4)	131,979,848	343,724,446
Total increase in net assets	1,764,233,036	728,130,400

NET ASSETS
Beginning of year	5,849,501,637	5,121,371,237
End of year	$7,613,734,673	$5,849,501,637

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

Growth Opportunities Fund 31

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

INVESTMENT OPERATIONS

LESS DISTRIBUTIONS

RATIOS AND SUPPLEMENTAL DATA

Ratio of net

Net asset

Net realized

From

Ratio

investment

value,

and unrealized

Total from

net

From

Net asset

Total return

Net assets,

of expenses

income (loss)

Portfolio

beginning

Net investment

gain (loss)

investment

investment

net realized gain

Total

value, end

at net asset

end of period

to average

turnover

Period ended

of period

income (loss)^a

on investments

operations

income

on investments

distributions

of period

value (%)^b

(in thousands)

net assets (%)^c

net assets (%)

(%)

Class A

July 31, 2020

$37.72

(.06)

11.84

11.78

—

(1.50)

(1.50)

$48.00

32.32

$5,756,280

1.05

(.15)

July 31, 2019

35.44

(.05)

4.71

4.66

—^d

(2.38)

(2.38)

37.72

14.39

4,586,742

1.03

(.15)

July 31, 2018

28.92

(.01)

7.12

7.11

(.08)

(.51)

(.59)

35.44

24.91

4,146,380

.91

(.02)

July 31, 2017

23.95

.14^e

4.83

4.97

—^d

—

—^d

28.92

20.76

3,504,855

.93

.52^e

July 31, 2016

25.11

.02

.13

.15

(.06)

(1.25)

(1.31)

23.95

.72

433,488

1.08^f

.07^f

Class B

July 31, 2020

$31.36

(.29)

9.72

9.43

—

(1.50)

(1.50)

$39.29

31.36

$56,457

1.80

(.88)

July 31, 2019

30.09

(.26)

3.91

3.65

—

(2.38)

(2.38)

31.36

13.54

60,486

1.78

(.89)

July 31, 2018

24.75

(.21)

6.06

5.85

—

(.51)

(.51)

30.09

23.95

74,078

1.66

(.76)

July 31, 2017

20.65

(.05)^e

4.15

4.10

—

24.75

19.85

76,969

1.68

(.22)^e

July 31, 2016

21.93

(.14)

.11

(.03)

—

(1.25)

(1.25)

20.65

(.02)

18,341

1.83^f

(.68)^f

Class C

July 31, 2020

$31.98

(.30)

9.91

9.61

—

(1.50)

(1.50)

$40.09

31.31

$177,417

1.80

(.90)

July 31, 2019

30.63

(.27)

4.00

3.73

—

(2.38)

(2.38)

31.98

13.56

153,943

1.78

(.90)

July 31, 2018

25.18

(.21)

6.17

5.96

—

(.51)

(.51)

30.63

23.98

137,534

1.66

(.76)

July 31, 2017

21.01

(.06)^e

4.23

4.17

—

25.18

19.85

144,159

1.68

(.24)^e

July 31, 2016

22.29

(.14)

.11

(.03)

—

(1.25)

(1.25)

21.01

(.01)

33,055

1.83^f

(.68)^f

Class R

July 31, 2020

$36.23

(.15)

11.33

11.18

—

(1.50)

(1.50)

$45.91

31.99

$15,852

1.30

(.40)

July 31, 2019

34.22

(.13)

4.52

4.39

—

(2.38)

(2.38)

36.23

14.10

11,933

1.28

(.39)

July 31, 2018

27.95

(.08)

6.88

6.80

(.02)

(.51)

(.53)

34.22

24.60

13,833

1.16

(.27)

July 31, 2017

23.20

.06^e

4.69

4.75

—

27.95

20.47

11,467

1.18

.24^e

July 31, 2016

24.38

(.04)

.12

.08

(.01)

(1.25)

(1.26)

23.20

.47

2,928

1.33^f

(.18)^f

Class R5

July 31, 2020

$39.82

.04

12.55

12.59

—

(1.50)

(1.50)

$50.91

32.66

$2,299

.78

.10

July 31, 2019

37.22

.06

4.96

5.02

(.04)

(2.38)

(2.42)

39.82

14.71

1,588

.76

.15

July 31, 2018

30.27

.09

7.46

7.55

(.09)

(.51)

(.60)

37.22

25.27

2,712

.63

.27

July 31, 2017

24.99

.20^e

5.08

5.28

—

30.27

21.13

2,389

.63

.78^e

July 31, 2016

26.13

.09

.15

.24

(.13)

(1.25)

(1.38)

24.99

1.06

9,912

.77^f

.38^f

Class R6

July 31, 2020

$39.72

.08

12.53

12.61

—

(1.50)

(1.50)

$50.83

32.80

$456,204

.68

.19

July 31, 2019

37.19

.08

4.96

5.04

(.13)

(2.38)

(2.51)

39.72

14.83

279,329

.66

.21

July 31, 2018

30.31

.12

7.47

7.59

(.20)

(.51)

(.71)

37.19

25.40

150,112

.53

.35

July 31, 2017

25.01

.23^e

5.09

5.32

(.02)

—

(.02)

30.31

21.30

95,571

.53

.86^e

July 31, 2016

26.17

.11

.14

.25

(.16)

(1.25)

(1.41)

25.01

1.09

33,780

.67^f

.47^f

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

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


32 Growth Opportunities Fund	Growth Opportunities Fund 33

Financial highlights cont.

INVESTMENT OPERATIONS

LESS DISTRIBUTIONS

RATIOS AND SUPPLEMENTAL DATA

Ratio of net

Net asset

Net realized

From

Ratio

investment

value,

and unrealized

Total from

net

From

Net asset

Total return

Net assets,

of expenses

income (loss)

Portfolio

beginning

Net investment

gain (loss)

investment

investment

net realized gain

Total

value, end

at net asset

end of period

to average

turnover

Period ended

of period

income (loss)^a

on investments

operations

income

on investments

distributions

of period

value (%)^b

(in thousands)

net assets (%)^c

net assets (%)

(%)

Class Y

July 31, 2020

$39.49

.03

12.44

12.47

—

(1.50)

(1.50)

$50.46

32.63

$1,149,225

.80

.08

July 31, 2019

36.98

.03

4.95

4.98

(.09)

(2.38)

(2.47)

39.49

14.71

716,621

.78

.09

July 31, 2018

30.16

.08

7.41

7.49

(.16)

(.51)

(.67)

36.98

25.18

561,997

.66

.22

July 31, 2017

24.91

.19^e

5.07

5.26

(.01)

—

(.01)

30.16

21.10

359,777

.68

.71^e

July 31, 2016

26.07

.07

.15

.22

(.13)

(1.25)

(1.38)

24.91

.97

116,717

.83^f

.31^f

^aPer share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

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

^cIncludes amounts paid through expense offset and/or brokerage/service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

^dAmount represents less than $0.01 per share.

^eReflects a dividend received by the fund from a single issuer which amounted to the following amounts:


	Per share	Percentage of average net assets
Class A	$0.09	0.35%
Class B	0.08	0.36
Class C	0.08	0.34
Class R	0.08	0.32
Class R5	0.10	0.39
Class R6	0.08	0.30
Class Y	0.08	0.30

^fReflects a voluntary waiver of certain fund expenses in effect during the period. As a result of such waiver, the expenses of each class reflect a reduction of less than 0.01% as a percentage of average net assets.

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


34 Growth Opportunities Fund	Growth Opportunities Fund 35

Notes to financial statements 7/31/20

Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from August 1, 2019 through July 31, 2020.

Putnam Growth Opportunities Fund (the fund) is a diversified series of Putnam Investment Funds (the Trust), a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The goal of the fund is to seek capital appreciation. The fund invests mainly in common stocks of large U.S. companies, with a focus on growth stocks. Growth stocks are stocks of companies whose earnings are expected to grow faster than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price. Putnam Management may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell investments.

The fund offers class A, class B, class C, class R, class R5, class R6 and class Y shares. Effective November 25, 2019, all class M shares were converted to class A shares and are no longer available for purchase. Purchases of class B shares are closed to new and existing investors except by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class A shares generally are not subject to a contingent deferred sales charge, and class R, class R5, class R6 and class Y shares are not subject to a contingent deferred sales charge. Prior to November 25, 2019, class M shares were sold with a maximum front-end sales charge of 3.50% and were not subject to a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, are not subject to 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 are subject to a one-year 1.00% contingent deferred sales charge and generally convert to class A shares after approximately ten years. 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 and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class R5, class R6 and class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C and class R shares, but do not bear a distribution fee, and in the case of class R5 and class R6 shares, bear a lower investor servicing fee, which is identified in Note 2. Class R5, class R6 and class Y shares are not available to all investors.

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 fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.

Under the fund’s Amended and Restated Agreement and Declaration of Trust, any claims asserted against or on behalf of the Putnam Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.

Note 1: Significant accounting policies

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.

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

36 Growth Opportunities Fund

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.

Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and have delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.

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 under Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.

Many securities markets and exchanges outside the U.S. close prior to the scheduled 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 scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain 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. The foreign equity securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. 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 Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. 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, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. 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.

Growth Opportunities Fund 37

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, net of any applicable withholding taxes, if any, and including amortization and accretion of premiums and discounts on debt securities, is recorded on the accrual basis. Dividend income, net of any 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 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.

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair 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 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 assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.

Options contracts The fund uses options contracts to gain exposure to securities.

The potential risk to the fund is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Exchange-traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. OTC traded options are valued using prices supplied by dealers.

Options on swaps are similar to options on securities except that the premium paid or received is to buy or grant the right to enter into a previously agreed upon interest rate or credit default contract. Forward premium swap option contracts include premiums that have extended settlement dates. The delayed settlement of the premiums is factored into the daily valuation of the option contracts. In the case of interest rate cap and floor contracts, in return for a premium, ongoing payments between two parties are based on interest rates exceeding a specified rate, in the case of a cap contract, or falling below a specified rate in the case of a floor contract.

Written option contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Total return swap contracts The fund entered into OTC and/or centrally cleared total return swap contracts, which are arrangements to exchange a market-linked return for a periodic payment, both based on a notional principal amount, to manage exposure to specific sectors or industries.

To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. OTC and/or centrally cleared total return swap contracts are marked to market daily based upon quotations from an independent pricing service or market maker. Any change is recorded as an unrealized gain or loss on OTC total return swaps. Daily fluctuations in the value of centrally cleared total return swaps are settled through a central clearing agent and are recorded in variation margin on the Statement of assets and liabilities and recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain OTC and/or centrally cleared total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the

38 Growth Opportunities Fund

price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk or central clearing risk is the fair value of the contract. This risk may be mitigated for OTC total return swap contracts by having a master netting arrangement between the fund and the counterparty and for centrally cleared total return swap contracts through the daily exchange of variation margin. There is minimal counterparty risk with respect to centrally cleared total return swap contracts due to the clearinghouse guarantee fund and other resources that are available in the event of a clearing member default. Risk of loss may exceed amounts recognized on the Statement of assets and liabilities.

OTC and/or centrally cleared total return swap contracts outstanding, including their respective notional amounts at period end, if any, are listed after the fund’s portfolio.

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC 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, is presented in the fund’s portfolio.

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 $1,221,437 on open derivative contracts subject to the Master Agreements. Collateral posted by the fund at period end for these agreements totaled $341,932 and may include amounts related to unsettled agreements.

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 fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The remaining maturities of the securities lending transactions are considered overnight and continuous. 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, net of expenses, is included in investment income on the Statement of operations. 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 to Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the fund received cash collateral of $393,564,535 and the value of securities loaned amounted to $386,189,899.

Interfund lending 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.

Lines of credit The fund participates, along with other Putnam funds, in a $317.5 million unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by 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 1.25% plus the higher of (1) the Federal Funds rate and (2) the overnight LIBOR 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 0.04% of the

Growth Opportunities Fund 39

committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.21% 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.

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 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.

The fund may also 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.

Pursuant to federal income tax regulations applicable to regulated investment companies, the fund has elected to defer $23,074,724 to its fiscal year ending July 31, 2021 of late year ordinary losses ((i) ordinary losses recognized between January 1, 2020 and July 31, 2020, and (ii) specified ordinary and currency losses recognized between November 1, 2019 and July 31, 2020).

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 from losses on wash sale transactions, from late year loss deferrals, from net operating loss and from income on swap contracts. 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. At the close of the reporting period, the fund reclassified $6,386,884 to increase accumulated net investment loss, $2,655,879 to decrease paid-in capital and $9,042,763 to increase accumulated net realized gain.

Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. 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	$3,691,365,965
Unrealized depreciation	(25,802,272)
Net unrealized appreciation	3,665,563,693
Undistributed long-term gain	262,948,102
Late year ordinary loss deferral	(23,074,724)
Cost for federal income tax purposes	$4,353,987,980

Expenses of the Trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the Trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund.

40 Growth Opportunities Fund

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 all open-end mutual funds sponsored by Putnam Management (excluding net assets of funds that are invested in, or that are invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:


0.710%	of the first $5 billion,	0.510%	of the next $50 billion,
0.660%	of the next $5 billion,	0.490%	of the next $50 billion,
0.610%	of the next $10 billion,	0.480%	of the next $100 billion and
0.560%	of the next $10 billion,	0.475%	of any excess thereafter.

In addition, 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. 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 dividing the result 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 Russell 1000 Growth Index each measured over the performance period. On October 24, 2016, Putnam Voyager Fund, a mutual fund managed by Putnam Management, was merged into the fund. Effective upon the closing of the merger, Putnam Management contractually agreed that the performance adjustment for the fund will be calculated based on the historical performance of whichever fund (the fund or Putnam Voyager Fund) has the relatively lower performance for the relevant period before the closing of the merger, rather than based solely on the performance of the fund. The maximum annualized performance adjustment rate is +/- 0.12%. 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 thirty-six month performance period. 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.

Because the performance adjustment is based on the fund’s performance relative to its applicable benchmark index, and not its absolute performance, the performance adjustment could increase Putnam Management’s fee even if the fund’s shares lose value during the performance period provided that the fund outperformed its benchmark index, and could decrease Putnam Management’s fee even if the fund’s shares increase in value during the performance period provided that the fund underperformed its benchmark index.

For the reporting period, the management fee represented an effective rate (excluding the impact of any expense waiver in effect) of 0.602% of the fund’s average net assets, which included an effective base fee of 0.549% and an increase of 0.053% ($3,346,175) based on performance.

Putnam Management has contractually agreed, through November 30, 2021, to waive fees and/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, acquired fund fees and 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. PIL did not manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay 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 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.

Growth Opportunities Fund 41

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 for class A, class B, class C, class M, class R and class Y shares that included (1) a per account fee for each direct and underlying non-defined contribution account (retail account) of the fund; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Putnam Investor Services, Inc. has agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund’s average assets attributable to such accounts. Effective November 25, 2019, the fund converted all of its class M shares to class A shares and class M shares were no longer able to be purchased.

Class R5 shares paid a monthly fee based on the average net assets of class R5 shares at an annual rate of 0.15%.

Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%.

During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:


Class A	$7,760,347	Class R5	2,765
Class B	88,157	Class R6	171,832
Class C	261,894	Class Y	1,366,821
Class M	20,744	Total	$9,693,054
Class R	20,494

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 $35,380 under the expense offset arrangements and by $24,461 under the brokerage/service arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $5,182, 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.

42 Growth Opportunities Fund

The fund has adopted distribution plans (the Plans) with respect to the following share classes 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, an indirect wholly-owned subsidiary of Putnam Investments, LLC, for services provided and expenses incurred in distributing shares of the fund. The Plans provide payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to the following amounts (Maximum %) of the average net assets attributable to each class. The Trustees have approved payment by the fund at the following annual rate (Approved %) of the average net assets attributable to each class. During the reporting period, the class-specific expenses related to distribution fees were as follows:


	Maximum %	Approved %	Amount
Class A	0.35%	0.25%	$12,040,663
Class B	1.00%	1.00%	546,649
Class C	1.00%	1.00%	1,626,080
ClassM ^*	1.00%	0.75%	92,297
Class R	1.00%	0.50%	63,598
Total			$14,369,287

^*Effective November 25, 2019, the fund converted all of its class M shares to class A shares and class M shares were no longer able to be purchased.

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $475,179 and $1,273 from the sale of class A and class M shares, respectively, and received $9,830 and $1,219 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received $440 on class A redemptions.

Note 3: Purchases and sales of securities

During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:


	Cost of purchases	Proceeds from sales
Investments in securities (Long-term)	$2,781,702,236	$2,953,071,296
U.S. government securities (Long-term)	—	—
Total	$2,781,702,236	$2,953,071,296

The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.

Growth Opportunities Fund 43

Note 4: Capital shares

At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions, including, if applicable, direct exchanges pursuant to share conversions, in capital shares were as follows:


	YEAR ENDED 7/31/20		YEAR ENDED 7/31/19
Class A	Shares	Amount	Shares	Amount
Shares sold	9,750,629	$386,687,746	8,774,298	$304,217,845
Shares issued in connection with
reinvestment of distributions	4,530,058	170,194,288	8,196,935	260,662,720
	14,280,687	556,882,034	16,971,233	564,880,565
Shares repurchased	(15,956,883)	(629,774,186)	(12,377,701)	(427,845,364)
Net increase (decrease)	(1,676,196)	$(72,892,152)	4,593,532	$137,035,201

	YEAR ENDED 7/31/20		YEAR ENDED 7/31/19
Class B	Shares	Amount	Shares	Amount
Shares sold	71,691	$2,382,157	133,513	$3,765,716
Shares issued in connection with
reinvestment of distributions	80,010	2,472,319	192,014	5,101,643
	151,701	4,854,476	325,527	8,867,359
Shares repurchased	(643,342)	(20,732,863)	(858,536)	(24,716,553)
Net decrease	(491,641)	$(15,878,387)	(533,009)	$(15,849,194)

	YEAR ENDED 7/31/20		YEAR ENDED 7/31/19
Class C	Shares	Amount	Shares	Amount
Shares sold	1,362,025	$45,438,247	1,494,683	$43,999,217
Shares issued in connection with
reinvestment of distributions	204,869	6,459,521	368,756	9,989,512
	1,566,894	51,897,768	1,863,439	53,988,729
Shares repurchased	(1,956,138)	(67,158,194)	(1,538,795)	(45,484,191)
Net increase (decrease)	(389,244)	$(15,260,426)	324,644	$8,504,538

	YEAR ENDED 7/31/20 ^*		YEAR ENDED 7/31/19
Class M	Shares	Amount	Shares	Amount
Shares sold	23,694	$794,181	101,827	$2,977,986
Shares issued in connection with
reinvestment of distributions	—	—	87,876	2,496,774
	23,694	794,181	189,703	5,474,760
Shares repurchased	(1,180,353)	(41,092,031)	(118,779)	(3,669,123)
Net increase (decrease)	(1,156,659)	$(40,297,850)	70,924	$1,805,637

44 Growth Opportunities Fund


	YEAR ENDED 7/31/20		YEAR ENDED 7/31/19
Class R	Shares	Amount	Shares	Amount
Shares sold	125,073	$4,650,532	75,238	$2,422,939
Shares issued in connection with
reinvestment of distributions	13,290	478,294	21,824	667,611
	138,363	5,128,826	97,062	3,090,550
Shares repurchased	(122,459)	(4,560,964)	(171,983)	(5,805,630)
Net increase (decrease)	15,904	$567,862	(74,921)	$(2,715,080)

	YEAR ENDED 7/31/20		YEAR ENDED 7/31/19
Class R5	Shares	Amount	Shares	Amount
Shares sold	14,509	$608,395	4,776	$176,248
Shares issued in connection with
reinvestment of distributions	1,573	62,579	2,704	90,596
	16,082	670,974	7,480	266,844
Shares repurchased	(10,818)	(433,090)	(40,454)	(1,478,824)
Net increase (decrease)	5,264	$237,884	(32,974)	$(1,211,980)

	YEAR ENDED 7/31/20		YEAR ENDED 7/31/19
Class R6	Shares	Amount	Shares	Amount
Shares sold	4,151,450	$171,330,416	4,187,366	$154,660,619
Shares issued in connection with
reinvestment of distributions	285,970	11,347,294	360,319	12,034,650
	4,437,420	182,677,710	4,547,685	166,695,269
Shares repurchased	(2,494,824)	(103,693,366)	(1,551,338)	(57,212,667)
Net increase	1,942,596	$78,984,344	2,996,347	$109,482,602

	YEAR ENDED 7/31/20		YEAR ENDED 7/31/19
Class Y	Shares	Amount	Shares	Amount
Shares sold	10,811,859	$448,313,424	6,317,700	$229,562,367
Shares issued in connection with
reinvestment of distributions	648,054	25,552,761	1,014,159	33,700,515
	11,459,913	473,866,185	7,331,859	263,262,882
Shares repurchased	(6,835,095)	(277,347,612)	(4,378,540)	(156,590,160)
Net increase	4,624,818	$196,518,573	2,953,319	$106,672,722

^*Effective November 25, 2019, the fund converted all of its class M shares to class A shares and class M shares were no longer able to be purchased.

Growth Opportunities Fund 45

Note 5: Affiliated transactions

Transactions during the reporting period with any company which is under common ownership or control were as follows:


					Shares
					outstanding
					and fair
	Fair value as	Purchase	Sale	Investment	value as
Name of affiliate	of 7/31/19	cost	proceeds	income	of 7/31/20
Short-term investments
Putnam Cash Collateral
Pool, LLC^*	$29,571,165	$1,223,301,305	$859,307,935	$640,702	$393,564,535
Putnam Short Term
Investment Fund^**	83,190,622	978,527,395	940,410,773	1,180,280	121,307,244
Total Short-term
investments	$112,761,787	$2,201,828,700	$1,799,718,708	$1,820,982	$514,871,779

^*No management fees are charged to Putnam Cash Collateral Pool, LLC (Note 1). Investment income shown is included in securities lending income on the Statement of operations. There were no realized or unrealized gains or losses during the period.

^**Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management. There were no realized or unrealized gains or losses during the period.

Note 6: Market, credit and other risks

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. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations.

Beginning in January 2020, global financial markets have experienced, and may continue to experience, significant volatility resulting from the spread of a virus known as COVID–19. The outbreak of COVID–19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand, and general market uncertainty. The effects of COVID–19 have adversely affected, and may continue to adversely affect, the global economy, the economies of certain nations, and individual issuers, all of which may negatively impact the fund’s performance.

Note 7: Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:


Purchased equity option contracts (contract amount)	$1,200,000
Written equity option contracts (contract amount)	$1,200,000
OTC total return swap contracts (notional)	$9,000,000
Warrants (number of warrants)	6,349

46 Growth Opportunities Fund

The following is a summary of the fair value of derivative instruments as of the close of the reporting period:


Fair value 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	Fair value	liabilities location	Fair value
Equity contracts	Receivables	$—	Payables	$1,221,437
Total		$—		$1,221,437

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


Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments
Derivatives not accounted for as hedging
instruments under ASC 815	Options	Swaps	Total
Equity contracts	$(8,641,360)	$(9,036,598)	$(17,677,958)
Total	$(8,641,360)	$(9,036,598)	$(17,677,958)


Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss)
on investments
Derivatives not accounted for as hedging
instruments under ASC 815	Options	Swaps	Total
Equity contracts	$5,541,896	$(1,221,437)	$4,320,459
Total	$5,541,896	$(1,221,437)	$4,320,459

Growth Opportunities Fund 47

Note 8: Offsetting of financial and derivative assets and liabilities

The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.


	Goldman Sachs International	Total
Assets:
OTC Total return swap contracts^*#	$—	$—
Total Assets	$—	$—
Liabilities:
OTC Total return swap contracts^*#	$1,221,437	$1,221,437
Total Liabilities	$1,221,437	$1,221,437
Total Financial and Derivative Net Assets	$(1,221,437)	$(1,221,437)
Total collateral received (pledged)^##†	$(341,932)
Net amount	$(879,505)
Controlled collateral received (including TBA
commitments)^**	$—	$—
Uncontrolled collateral received	$—	$—
Collateral (pledged) (including TBA commitments)^**	$(341,932)	$(341,932)

^*Excludes premiums, if any. Included in unrealized appreciation and depreciation on OTC swap contracts on the Statement of assets and liabilities.

^**Included with Investments in securities on the Statement of assets and liabilities.

^†Additional collateral may be required from certain brokers based on individual agreements.

^#Covered by master netting agreement (Note 1).

^##Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.

Note 9: Change in independent accountants (Unaudited)

On March 20, 2020, the Audit, Compliance and Distributions Committee of the Trustees of the Putnam Funds approved and recommended the decision to change the Fund’s independent accountant and to not retain KPMG LLP, and on April 3, 2020, upon request of the Putnam Funds, KPMG LLP provided a letter of resignation. During the two previous fiscal years, KPMG LLP audit reports contained no adverse opinion or disclaimer of opinion; nor were its reports qualified or modified as to uncertainty, audit scope, or accounting principle. Further, in connection with its audits for the two previous fiscal years and the subsequent interim period through April 3, 2020: (i) there were no disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of KPMG LLP would have caused it to make reference to the subject matter of the disagreements in its report on the Fund’s financial statements for such years, and (ii) there were no “reportable events” of the kind described in Item 304(a)(1)(v) of Regulation S-K under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.

On April 17, 2020, the Audit, Compliance and Distributions Committee of the Trustees of the Putnam Funds approved and recommended the decision to appoint PricewaterhouseCoopers LLP as the Fund’s independent accountant.

48 Growth Opportunities Fund

Officers

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


Robert T. Burns (Born 1961)	Richard T. Kircher (Born 1962)
Vice President and Chief Legal Officer	Vice President and BSA Compliance Officer
Since 2011	Since 2019
General Counsel, Putnam Investments,	Assistant Director, Operational Compliance, Putnam
Putnam Management, and Putnam Retail Management	Investments and Putnam Retail Management

James F. Clark (Born 1974)	Susan G. Malloy (Born 1957)
Vice President and Chief Compliance Officer	Vice President and Assistant Treasurer
Since 2016	Since 2007
Chief Compliance Officer and Chief Risk Officer,	Head of Accounting and Middle Office Services,
Putnam Investments and Chief Compliance Officer,	Putnam Investments and Putnam Management
Putnam Management
	Denere P. Poulack (Born 1968)
Nancy E. Florek (Born 1957)	Assistant Vice President, Assistant Clerk,
Vice President, Director of Proxy Voting and Corporate	and Assistant Treasurer
Governance, Assistant Clerk, and Assistant Treasurer	Since 2004
Since 2000
	Janet C. Smith (Born 1965)
Michael J. Higgins (Born 1976)	Vice President, Principal Financial Officer, Principal
Vice President, Treasurer, and Clerk	Accounting Officer, and Assistant Treasurer
Since 2010	Since 2007
	Head of Fund Administration Services,
Jonathan S. Horwitz (Born 1955)	Putnam Investments and Putnam Management
Executive Vice President, Principal Executive Officer,
and Compliance Liaison	Mark C. Trenchard (Born 1962)
Since 2004	Vice President
	Since 2002
	Director of Operational Compliance, 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 100 Federal Street, Boston, MA 02110.

52 Growth Opportunities Fund

Fund information

Founded over 80 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 funds across income, value, blend, growth, sustainable, asset allocation, absolute return, and global sector categories.


Investment Manager	Trustees	Michael J. Higgins
Putnam Investment	Kenneth R. Leibler, Chair	Vice President, Treasurer,
Management, LLC	Liaquat Ahamed	and Clerk
100 Federal Street	Ravi Akhoury
Boston, MA 02110	Barbara M. Baumann	Jonathan S. Horwitz
	Katinka Domotorffy	Executive Vice President,
Investment Sub-Advisor	Catharine Bond Hill	Principal Executive Officer,
Putnam Investments Limited	Paul L. Joskow	and Compliance Liaison
16 St James’s Street	George Putnam, III
London, England SW1A 1ER	Robert L. Reynolds	Richard T. Kircher
	Manoj P. Singh	Vice President and BSA
Marketing Services	Mona K. Sutphen	Compliance Officer
Putnam Retail Management
100 Federal Street	Officers	Susan G. Malloy
Boston, MA 02110	Robert L. Reynolds	Vice President and
	President	Assistant Treasurer
Custodian
State Street Bank	Robert T. Burns	Denere P. Poulack
and Trust Company	Vice President and	Assistant Vice President, Assistant
	Chief Legal Officer	Clerk, and Assistant Treasurer
Legal Counsel
Ropes & Gray LLP	James F. Clark	Janet C. Smith
	Vice President, Chief Compliance	Vice President,
Independent Registered Public	Officer, and Chief Risk Officer	Principal Financial Officer,
Accounting Firm		Principal Accounting Officer,
PricewaterhouseCoopers LLP	Nancy E. Florek	and Assistant Treasurer
	Vice President, Director of
	Proxy Voting and Corporate	Mark C. Trenchard
	Governance, Assistant Clerk,	Vice President
	and Assistant Treasurer

This report is for the information of shareholders of Putnam Growth Opportunities 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


July 31, 2020	$132,671	$ —	$7,120	$ —
July 31, 2019	$54,888	$ —	$4,910	$ —


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

July 31, 2020	$ —	$345,842	$ —	$ —
July 31, 2019	$ —	$ —	$ —	$ —


	CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES


	Exact name of registrant as specified in charter:	Putnam Investment Funds


	Address of principal executive offices:	100 Federal Street, Boston, Massachusetts 02110


	Name and address of agent for service:	Robert T. Burns, Vice President 100 Federal Street Boston, Massachusetts 02110


	Copy to:	Bryan Chegwidden, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036


	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:


	(c) In October 2019, the Code of Ethics of Putnam Investments was amended. The key changes to the Code of Ethics are as follows: (i) Employee notification to the Code of Ethics Officer before acting as a public official for any government entity (ii) Clarifying changes to the Insider Trading provisions and to the rules for trading in securities issued by Great-West Lifeco.


	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 July 31, 2020 and July 31, 2019, the fund's independent auditor billed aggregate non-audit fees in the amounts of $352,962 and $4,910 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


	Washington, D.C. 20549


	FORM N-CSR


	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.


	Pre-Approval Policies of the Audit, Compliance and Distributions Committee. The Audit, Compliance and Distributions 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: Not applicable


	Item 12. Disclosures of Securities Lending Activities for Closed-End Management Investment Companies:


	(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