As filed with the Securities and Exchange Commission on April 14, 2004
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 62 / X /
and ----
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
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Amendment No. 60 / X /
(Check appropriate box or boxes) ----
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PUTNAM INVESTMENT FUNDS
(Exact name of registrant as specified in charter)
One Post Office Square, Boston, Massachusetts 02109
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code
(617) 292-1000
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It is proposed that this filing will become effective
(check appropriate box)
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/ / immediately upon filing pursuant to paragraph (b)
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---- effective date for a previously filed post-effective amendment.
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BETH S. MAZOR, Vice President
PUTNAM INVESTMENT FUNDS
One Post Office Square
Boston, Massachusetts 02109
(Name and address of agent for service)
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Copy to:
JOHN W. GERSTMAYR, Esquire
ROPES & GRAY LLP
One International Place
Boston, Massachusetts 02110
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This Post-Effective Amendment relates solely to the Registrant's Putnam Research Fund series. Information contained in the Registrant's Registration Statement relating to any other series of the Registrant is neither amended nor superseded hereby. Parts A and B of this registration statement, other than with respect to the supplements to the prospectus and statement of additional information filed herewith, are hereby incorporated by reference to Post-Effective Amendment no. 59 to the Registration Statement, as filed with the Commission on November 26, 2003 (Accession No. 0000928816-03-000775).
As previously disclosed in a press release dated March 2, 2004, Putnam Management discovered that in early 2001, certain Putnam employees had willfully circumvented controls in connection with the correction of operational errors with respect to a 401(k) client's investment in certain Putnam Funds, which led to losses in the fund. Putnam made restitution of approximately $1.8 million to the fund on February 19, 2004, representing approximately $0.014 per share outstanding as of such date. Had this payment been made when the error occurred, it would have had the effect of increasing the net asset value of each class of the fund's shares by $0.01 to $0.02 per share. Putnam and the fund's Trustees are in the process of finalizing the restitution amounts. Additional amounts may be warranted. Putnam has also implemented a number of personnel changes, including senior personnel, and has begun to implement changes in procedures to address these items. Putnam has informed the SEC, the fund's Trustees and independent auditors.
The following is added as a new second paragraph under the heading "Performance Information:"
Performance information shown in the bar chart and table has been adjusted to reflect the restitution payment from Putnam Management as if it had been made on January 5, 2001. This payment had the effect of increasing the net asset value of each class of the fund's shares for each day during the period by $0.01 to $0.02 per share. If the adjustment had not been so reflected, performance shown for periods ending December 31, 2003 and for calendar years 2001, 2002 and 2003 would have been lower.
The following information replaces the bar chart and table appearing under the caption "Performance Information":
[GRAPHIC OMITTED: CALENDAR YEAR TOTAL RETURNS]
CALENDAR YEAR TOTAL RETURNS
1996 23.26% 1997 32.92% 1998 29.45% 1999 27.57% 2000 -2.13% 2001 -18.85% 2002 -22.21% 2003 25.17% |
Performance figures in the bar chart do not reflect the impact of sales charges. If they did, performance would be less than that shown. Year-to-date performance through 3/31/04 was 1.08%. During the periods shown in the bar chart, the highest return for a quarter was 23.77% (quarter ending 12/31/98) and the lowest return for a quarter was -20.18% (quarter ending 9/30/01).
Since
Past Past inception
1 year 5 years (10/2/95)
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Class A before taxes 18.62% -1.34% 9.71%
Class A after taxes on distributions 18.62% -2.34% 7.97%
Class A after taxes on distributions
and sale of fund shares 12.11% -1.64% 7.52%
Class B before taxes 19.30% -1.36% 9.54%
Class C before taxes 23.25% -1.01% 9.60%
Class M before taxes 20.08% -1.48% 9.40%
Class R before taxes 24.98% -0.50% 10.17%
S&P 500 Index (no deduction for fees,
expenses or taxes) 28.68% -0.57% 9.93%
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Unlike the bar chart, this performance information reflects the impact of sales charges. Class A and class M share performance reflects the current maximum initial sales charges (which for class A shares reflects a reduction that took effect after December 31, 2003); class B and class C share performance reflects the maximum applicable deferred sales charge if shares had been redeemed on 12/31/03 and, for class B shares, does not assume conversion to class A shares after eight years. For periods before the inception of class B shares (6/15/98), class C shares (2/1/99), class M shares (6/15/98) and class R shares (1/21/03), performance shown for these classes in the table is based on the performance of the fund's class A shares, adjusted to reflect the appropriate sales charge and the higher 12b-1 fees paid by the class B, class C, class M and class R shares. The fund's performance through 7/31/98 benefited from Putnam Management's agreement to limit the fund's expenses. The fund's performance is compared to the S&P 500 Index, an unmanaged index of common stocks frequently used as a general measure of U.S. stock performance. After-tax returns reflect the highest individual federal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns are shown for class A shares only and will vary for other classes. After-tax returns are not relevant to those investing through 401(k) plans, IRAs or other tax-deferred arrangements.
The following information replaces the first paragraph appearing under the caption "Financial Highlights":
The financial highlights tables are intended to help you understand the fund's recent financial performance. Certain information reflects financial results for a single fund share. The total returns represent the rate that an investor would have earned or lost on an investment in the fund, assuming reinvestment of all dividends and distributions. Except for the unaudited information for the six months ended January 31, 2004, this information has been derived from the fund's financial statements, which have been audited by KPMG LLP. Its report and the fund's financial statements are included in the fund's annual report to shareholders, which is available upon request.
To comply with regulatory requirements, the following unaudited information for the six months ended January 31, 2004 supplements the information contained in the Financial Highlights table:
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Class A Class B Class C Class M Class R
Six months Six months Six months Six months Six months
ended ended ended ended ended
January 31 January 31 January 31 January 31 January 31
Per-share operating 2004 2004 2004 2004 2004
performance (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
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Net Asset Value,
beginning of period $11.60 $11.13 $11.20 $11.29 $11.59
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Investment Operations:
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Net Investment Income (a) .02 (.02) (.02) (.01) --(d)
-------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.44 1.38 1.39 1.40 1.44
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Total from investment
operations 1.46 1.36 1.37 1.39 1.44
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Less distributions:
-------------------------------------------------------------------------------------------
From net investment income -- -- -- -- --
-------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- --
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Total distributions -- -- -- -- --
-------------------------------------------------------------------------------------------
Net asset value,
end of period $13.06 $12.49 $12.57 $12.68 $13.03
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Total return at net
asset value (%)(b)(e) 12.59* 12.22* 12.23* 12.31* 12.42*
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Ratios and supplemental data
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Net assets, end
of period (in thousands) $952,712 $504,704 $59,413 $27,812 $928
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Ratio of expenses to
average net assets (%)(c) .55* .93* .93* .80* .68*
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Ratio of net investment
income to average
net assets (%) .17* (.21)* (.21)* (.08)* .05*
-------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.44* 56.44* 56.44* 56.44* 56.44*
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* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Includes amounts paid through brokerage service and expense offset arrangements.
(d) Amount represents less than $0.01 per share.
(e) If the restitution payment described above had not been made, total
return for the six months ended January 31, 2004 would have been:
class A: 12.50%; class B: 12.13%; class C: 12.05%; class M: 12.22%;
class R: 12.34%.
PUTNAM RESEARCH FUND
Class Y Prospectus dated November 30, 2003
As previously disclosed in a press release dated March 2, 2004, Putnam Management discovered that in early 2001, certain Putnam employees had willfully circumvented controls in connection with the correction of operational errors with respect to a 401(k) client's investment in certain Putnam Funds, which led to losses in the fund. Putnam made restitution of approximately $1.8 million to the fund on February 19, 2004, representing approximately $0.014 per share outstanding as of such date. Had this payment been made when the error occurred, it would have had the effect of increasing the net asset value of each class of the fund's shares by $0.01 to $0.02 per share. Putnam and the fund's Trustees are in the process of finalizing the restitution amounts. Additional amounts may be warranted. Putnam has also implemented a number of personnel changes, including senior personnel, and has begun to implement changes in procedures to address these items. Putnam has informed the SEC, the fund's Trustees and independent auditors.
The following is added as a new second paragraph under the heading "Performance Information:"
Performance information shown in the bar chart and table has been adjusted to reflect the restitution payment from Putnam Management as if it had been made on January 5, 2001. This payment had the effect of increasing the net asset value of each class of the fund's shares for each day during the period by $0.01 to $0.02 per share. If the adjustment had not been so reflected, performance shown for periods ending December 31, 2003 and for calendar years 2001, 2002 and 2003 would have been lower.
[GRAPHIC OMITTED: bar chart CALENDAR YEAR TOTAL RETURNS]
CALENDAR YEAR TOTAL RETURNS
1996 23.26% 1997 32.92% 1998 29.45% 1999 27.57% 2000 -1.90% 2001 -18.61% 2002 -22.07% 2003 25.53% |
Year-to-date performance through 3/31/04 was 1.15%. During the periods shown in the bar chart, the highest return for a quarter was 23.77% (quarter ending 12/31/98) and the lowest return for a quarter was -20.11% (quarter ending 9/30/01).
Average Annual Total Returns (for periods ending 12/31/03)
Past 1 year Past 5 years Since inception 10/2/95
Class Y 25.53% -0.07% 10.56%
S&P 500 Index 28.68% -0.57% 9.93%
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The following information replaces the first paragraph appearing under the caption "Financial Highlights":
The financial highlights tables are intended to help you understand the fund's recent financial performance. Certain information reflects financial results for a single fund share. The total returns represent the rate that an investor would have earned or lost on an investment in the fund, assuming reinvestment of all dividends and distributions. Except for the unaudited information for the six months ended January 31, 2004, this information has been derived from the fund's financial statements, which have been audited by KPMG LLP. Its report and the fund's financial statements are included in the fund's annual report to shareholders, which is available upon request.
To comply with regulatory requirements, the following unaudited information for the six months ended January 31, 2004 supplements the information contained in the Financial Highlights table:
Class Y
Six months
ended January 31
2004
Per-share operating performance (Unaudited)
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Net Asset Value, beginning of period $11.67
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Investment Operations:
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Net Investment Income (a) .04
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Net realized and unrealized gain
on investments 1.45
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Total from investment operations 1.49
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Less distributions:
------------------------------------------------------------------------
From net investment income --
------------------------------------------------------------------------
From net realized gain on investments --
------------------------------------------------------------------------
Total distributions --
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Net asset value, end of period $13.16
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Total return at net asset value (%)(b)(d) 12.77*
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Ratios and supplemental data
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Net assets, end of period (in thousands) $132,666
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Ratio of expenses to average net
assets (%)(c) .43*
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Ratio of net investment income to
average net assets (%) .30*
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Portfolio turnover (%) 56.44*
------------------------------------------------------------------------
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* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Includes amounts paid through brokerage service and expense offset arrangements.
(d) If the restitution payment described above had not been made, total return for the six months ended January 31,2004 would have been 12.68%.
Statement of Additional Information dated November 30, 2003
The text in the section "Independent Auditors and Financial Statements" is replaced with the following:
INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
KPMG LLP, 99 High Street, Boston, Massachusetts 02110, are the fund's independent auditors providing audit services, tax return review and other tax consulting services and assistance and consultation in connection with the review of various Securities and Exchange Commission filings. The Report of Independent Auditors, financial highlights and financial statements included in the fund's Annual Report for the fiscal year ended July 31, 2003 are incorporated by reference into this SAI. The fund's Annual Report for the fiscal year ended July 31, 2003 was filed electronically on September 29, 2003 (File No. 811-7237). The audited financial highlights included in the prospectus and incorporated by reference into this SAI and the audited financial statements incorporated by reference into the prospectus and this SAI have been so included and incorporated in reliance upon the reports of the independent auditors, given on their authority as experts in auditing and accounting.
The following unaudited financial information is added to under the new heading "Financial Statements":
A guide to the financial statements
These sections of the report, as well as the accompanying Notes, constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and share price are determined. All investment and noninvestment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the net assets allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss. This is done by first adding up all the fund's earnings -- from dividends and interest income -- and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings -- as well as any unrealized gains or losses over the period -- is added to or subtracted from the net investment result to determine the fund's net gain or loss for the fiscal period.
Statement of changes in net assets shows how the fund's net assets were affected by distributions to shareholders and by changes in the number of the fund's shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlight table also includes the current reporting period. For open-end funds, a separate table is provided for each share class.
The fund's portfolio
January 31, 2004 (Unaudited)
Common stocks (99.1%) (a)
Number of shares Value
Aerospace and Defense (2.3%)
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279,500 Boeing Co. (The) $11,669,125
222,200 Lockheed Martin Corp. 10,803,364
165,700 United Technologies Corp. 15,830,978
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38,303,467
Airlines (0.7%)
-------------------------------------------------------------------------------
776,100 Southwest Airlines Co. 11,602,695
Automotive (0.5%)
-------------------------------------------------------------------------------
170,700 General Motors Corp. 8,480,376
Banking (6.3%)
-------------------------------------------------------------------------------
84,200 Bank of America Corp. 6,858,932
837,300 Bank of New York Co., Inc. (The) 26,584,275
511,100 Fifth Third Bancorp 29,536,469
105,500 State Street Corp. 5,681,175
541,000 U.S. Bancorp 15,294,070
385,500 Wells Fargo & Co. 22,131,555
--------------
106,086,476
Beverage (1.5%)
-------------------------------------------------------------------------------
502,000 Coca-Cola Co. (The) 24,718,480
Biotechnology (2.0%)
-------------------------------------------------------------------------------
371,400 Amgen, Inc. (NON) 23,951,586
226,800 Biogen Idec, Inc. (NON) 9,704,772
--------------
33,656,358
Broadcasting (0.7%)
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309,100 Viacom, Inc. Class B 12,456,730
Building Materials (1.0%)
-------------------------------------------------------------------------------
5,641,200 Aggregate Industries PLC (United
Kingdom) 8,676,555
315,200 Masco Corp. 8,403,232
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17,079,787
Cable Television (0.8%)
-------------------------------------------------------------------------------
355,000 Echostar Communications Corp. Class
A (NON) 12,957,500
Chemicals (2.3%)
-------------------------------------------------------------------------------
156,000 Avery Dennison Corp. 9,696,960
42,000 Dow Chemical Co. (The) 1,761,900
510,800 E.I. du Pont de Nemours & Co. 22,424,120
78,200 PPG Industries, Inc. 4,553,586
--------------
38,436,566
Commercial and Consumer Services (0.2%)
-------------------------------------------------------------------------------
64,400 Cintas Corp. 2,907,660
Communications Equipment (3.2%)
-------------------------------------------------------------------------------
1,241,900 Cisco Systems, Inc. (NON) 31,842,316
362,600 Nokia OYJ ADR (Finland) 7,491,316
830,600 Nortel Networks Corp. (Canada) (NON) 6,495,292
128,800 QUALCOMM, Inc. 7,524,496
--------------
53,353,420
Computers (3.3%)
-------------------------------------------------------------------------------
536,100 Dell, Inc. (NON) 17,943,267
1,347,400 Hewlett-Packard Co. 32,054,646
75,900 Lexmark International, Inc. (NON) 6,291,351
--------------
56,289,264
Conglomerates (4.9%)
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1,606,400 General Electric Co. 54,023,232
1,058,600 Tyco International, Ltd. (Bermuda) 28,317,550
--------------
82,340,782
Construction (0.3%)
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279,051 CRH PLC (Ireland) 5,875,027
Consumer Finance (1.5%)
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196,300 Capital One Financial Corp. 13,953,004
426,000 MBNA Corp. 11,484,960
--------------
25,437,964
Consumer Goods (1.2%)
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80,600 Avon Products, Inc. 5,103,592
285,400 Colgate-Palmolive Co. 14,632,458
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19,736,050
Electric Utilities (2.8%)
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596,600 Edison International 13,125,200
98,900 Entergy Corp. 5,783,672
112,800 Exelon Corp. 7,555,344
149,800 FirstEnergy Corp. 5,620,496
558,900 PG&E Corp. (NON) 15,006,465
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47,091,177
Electronics (4.4%)
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87,900 Analog Devices, Inc. 4,206,015
252,500 Celestica, Inc. (Canada) (NON) 4,330,375
1,483,400 Intel Corp. 45,392,040
22,600 Samsung Electronics Co., Ltd. (South
Korea) 10,095,823
337,600 Texas Instruments, Inc. 10,583,760
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74,608,013
Energy (0.9%)
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240,700 GlobalSantaFe Corp. (Cayman Islands) 6,571,110
298,000 Halliburton Co. 8,984,700
--------------
15,555,810
Financial (6.0%)
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970,600 Citigroup, Inc. (SEG) 48,025,288
331,000 Fannie Mae 25,520,100
426,100 Freddie Mac 26,597,162
--------------
100,142,550
Food (0.8%)
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170,400 Dean Foods Co. (NON) 5,452,800
172,000 General Mills, Inc. 7,813,960
--------------
13,266,760
Health Care Services (2.8%)
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115,900 AmerisourceBergen Corp. 6,380,295
401,100 Cardinal Health, Inc. 25,714,521
132,400 Express Scripts, Inc. Class A (NON) 9,158,108
157,300 Medco Health Solutions, Inc. (NON) 5,796,505
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47,049,429
Homebuilding (1.8%)
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452,550 D.R. Horton, Inc. 12,716,655
384,400 Lennar Corp. 16,952,040
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29,668,695
Insurance (5.5%)
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504,400 ACE, Ltd. (Bermuda) 21,901,048
808,200 American International Group, Inc. 56,129,490
176,700 XL Capital, Ltd. Class A (Bermuda) 14,047,650
--------------
92,078,188
Investment Banking/Brokerage (1.1%)
-------------------------------------------------------------------------------
435,700 Charles Schwab Corp. (The) 5,485,463
342,000 JPMorgan Chase & Co. 13,300,380
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18,785,843
Leisure (0.4%)
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121,400 Harley-Davidson, Inc. 6,196,256
Manufacturing (0.4%)
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83,300 Illinois Tool Works, Inc. 6,505,730
Media (1.2%)
-------------------------------------------------------------------------------
1,782,100 Liberty Media Corp. Class A (NON) 20,743,644
Medical Technology (0.8%)
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287,200 Medtronic, Inc. 14,135,984
Metals (0.3%)
-------------------------------------------------------------------------------
159,000 Alcoa, Inc. 5,434,620
Office Equipment & Supplies (0.3%)
-------------------------------------------------------------------------------
127,100 Pitney Bowes, Inc. 5,157,718
Oil & Gas (4.9%)
-------------------------------------------------------------------------------
1,109,363 BG Group PLC (United Kingdom) 5,588,309
110,400 Canadian Natural Resources, Ltd.
(Canada) 5,311,283
1,217,200 Exxon Mobil Corp. 49,649,588
385,800 Noble Corp. (Cayman Islands) (NON) 14,313,180
74,800 Total SA Class B ADR (France) 6,604,840
--------------
81,467,200
Pharmaceuticals (7.9%)
-------------------------------------------------------------------------------
501,700 Abbott Laboratories 21,613,236
147,900 Forest Laboratories, Inc. (NON) 11,017,071
2,140,200 Pfizer, Inc. 78,395,525
532,800 Wyeth 21,818,160
--------------
132,843,992
Photography/Imaging (0.3%)
-------------------------------------------------------------------------------
324,100 Xerox Corp. (NON) 4,744,824
Railroads (1.5%)
-------------------------------------------------------------------------------
106,800 Canadian National Railway Co.
(Toronto Exchange) (Canada) 6,402,660
296,200 Union Pacific Corp. 19,075,280
--------------
25,477,940
Regional Bells (2.7%)
-------------------------------------------------------------------------------
1,230,100 Verizon Communications, Inc. 45,341,486
Restaurants (0.7%)
-------------------------------------------------------------------------------
604,700 Darden Restaurants, Inc. 12,094,000
Retail (9.9%)
-------------------------------------------------------------------------------
230,400 AutoZone, Inc. (NON) 19,427,328
330,800 Bed Bath & Beyond, Inc. (NON) 13,433,788
406,200 Family Dollar Stores, Inc. 14,070,768
361,800 Home Depot, Inc. (The) 12,833,046
561,600 Kohl's Corp. (NON) 24,878,880
479,900 Lowe's Cos., Inc. 25,698,645
687,800 Office Depot, Inc. (NON) 10,970,410
210,800 TJX Cos., Inc. (The) 4,846,292
735,300 Wal-Mart Stores, Inc. 39,595,905
--------------
165,755,062
Software (5.8%)
-------------------------------------------------------------------------------
197,200 Computer Associates International,
Inc. 5,154,808
2,383,000 Microsoft Corp. 65,889,950
1,203,800 Oracle Corp. (NON) 16,624,478
350,700 Siebel Systems, Inc. (NON) 4,674,831
136,400 VERITAS Software Corp. (NON) 4,482,104
--------------
96,826,171
Technology Services (0.3%)
-------------------------------------------------------------------------------
136,300 Fiserv, Inc. (NON) 5,092,168
Telecommunications (0.8%)
-------------------------------------------------------------------------------
579,800 AT&T Wireless Services, Inc. (NON) 6,406,790
252,300 CenturyTel, Inc. 6,660,720
--------------
13,067,510
Tobacco (1.6%)
-------------------------------------------------------------------------------
480,200 Altria Group, Inc. 26,694,318
Toys (0.5%)
-------------------------------------------------------------------------------
424,900 Mattel, Inc. 8,034,859
--------------
Total Common stocks
(cost $1,507,549,436) $1,663,578,549
Short-term investments (1.7%) (a)
Principal amount Value
-------------------------------------------------------------------------------
$4,151,885 Short-term investments held as
collateral for loaned
securities with yields ranging from
1.00% to 1.05% due February 2, 2004
(d) $4,151,645
23,813,681 Short-term investments held in
Putnam commingled cash account with
yields ranging from 0.85% to 1.13%
and due dates ranging from February
2, 2004 to March 30, 2004 (d) 23,813,681
--------------
Total Short-term investments
(cost $27,965,326) $27,965,326
-------------------------------------------------------------------------------
Total Investments
(cost $1,535,514,762) $1,691,543,875
-------------------------------------------------------------------------------
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(a) Percentages indicated are based on net assets of $1,678,234,472.
(NON) Non-income-producing security.
(SEG) A portion of this security was pledged and segregated with the custodian to cover margin requirements for futures contracts at January 31, 2004.
(d) See Note 1 to the financial statements.
ADR after the name of a foreign holding stands for American Depositary Receipts, representing ownership of foreign securities on deposit with a custodian bank.
Forward currency contracts to buy at January 31, 2004 (Unaudited)
(aggregate face value $8,587,295)
Aggregate Delivery Unrealized
Value face value date appreciation
------------------------------------------------------------------------------
Euro $7,872,296 $7,723,209 3/17/04 $149,087
Japanese Yen 888,632 864,086 3/17/04 24,546
------------------------------------------------------------------------------
$173,633
------------------------------------------------------------------------------
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Forward currency contracts to sell at January 31, 2004 (Unaudited)
(aggregate face value $60,454,978)
Unrealized
Aggregate Delivery appreciation/
Value face value date (depreciation)
------------------------------------------------------------------------------
British Pound $9,991,510 $9,558,236 3/17/04 $(433,274)
Canadian Dollar 18,102,952 18,475,256 3/17/04 372,304
Euro 27,200,609 26,289,254 3/17/04 (911,355)
South Korean Won 6,305,556 6,132,232 3/17/04 (173,324)
------------------------------------------------------------------------------
$(1,145,649)
------------------------------------------------------------------------------
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Futures contracts outstanding at January 31, 2004 (Unaudited)
Aggregate Expiration Unrealized
Value face value date depreciation
------------------------------------------------------------------------------
S&P 500 Index
(Long) $3,954,650 $3,962,179 Mar-04 $(7,529)
------------------------------------------------------------------------------
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The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities January 31, 2004 (Unaudited) Assets ------------------------------------------------------------------------------- Investments in securities, at value, including $3,851,398 of securities on loan (identified cost $1,535,514,762) (Note 1) $1,691,543,875 ------------------------------------------------------------------------------- Foreign currency (cost $15) (Note 1) 15 ------------------------------------------------------------------------------- Dividends, interest and other receivables 1,959,918 ------------------------------------------------------------------------------- Receivable for shares of the fund sold 2,509,140 ------------------------------------------------------------------------------- Receivable for securities sold 879,695 ------------------------------------------------------------------------------- Receivable for open forward currency contracts (Note 1) 545,937 ------------------------------------------------------------------------------- Receivable for closed forward currency contracts (Note 1) 6,677 ------------------------------------------------------------------------------- Receivable from Manager (Note 6) 1,813,908 ------------------------------------------------------------------------------- Total assets 1,699,259,165 Liabilities ------------------------------------------------------------------------------- Payable for variation margin (Note 1) 1,739 ------------------------------------------------------------------------------- Payable for securities purchased 2,238,329 ------------------------------------------------------------------------------- Payable for shares of the fund repurchased 9,181,262 ------------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 2,215,851 ------------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 704,393 ------------------------------------------------------------------------------- Payable for Trustee compensation and expenses (Note 2) 67,477 ------------------------------------------------------------------------------- Payable for administrative services (Note 2) 1,670 ------------------------------------------------------------------------------- Payable for distribution fees (Note 2) 709,606 ------------------------------------------------------------------------------- Payable for open forward currency contracts (Note 1) 1,517,953 ------------------------------------------------------------------------------- Payable for closed forward currency contracts (Note 1) 56,436 ------------------------------------------------------------------------------- Collateral on securities loaned, at value (Note 1) 4,151,645 ------------------------------------------------------------------------------- Other accrued expenses 178,332 ------------------------------------------------------------------------------- Total liabilities 21,024,693 ------------------------------------------------------------------------------- Net assets $1,678,234,472 Represented by ------------------------------------------------------------------------------- Paid-in capital (Notes 1, 4 and 6) $2,320,256,520 ------------------------------------------------------------------------------- Accumulated net investment loss (Note 1) (1,654,037) ------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (Note 1) (795,421,287) ------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 155,053,276 ------------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $1,678,234,472 Computation of net asset value and offering price ------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($952,712,072 divided by 72,945,143 shares) $13.06 ------------------------------------------------------------------------------- Offering price per class A share (100/94.75 of $13.06)* $13.78 ------------------------------------------------------------------------------- Net asset value and offering price per class B share ($504,704,146 divided by 40,404,426 shares)** $12.49 ------------------------------------------------------------------------------- Net asset value and offering price per class C share ($59,412,671 divided by 4,727,215 shares)** $12.57 ------------------------------------------------------------------------------- Net asset value and redemption price per class M share ($27,811,731 divided by 2,193,128 shares) $12.68 ------------------------------------------------------------------------------- Offering price per class M share (100/96.50 of $12.68)* $13.14 ------------------------------------------------------------------------------- Net asset value, offering price and redemption price per class R share ($928,122 divided by 71,213 shares) $13.03 ------------------------------------------------------------------------------- Net asset value, offering price and redemption price per class Y share ($132,665,730 divided by 10,079,209 shares) $13.16 ------------------------------------------------------------------------------- |
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales, the offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
Statement of operations Six months ended January 31, 2004 (Unaudited) Investment income: ------------------------------------------------------------------------------- Dividends (net of foreign tax of $33,911) $12,105,948 ------------------------------------------------------------------------------- Interest 135,809 ------------------------------------------------------------------------------- Securities lending 7,357 ------------------------------------------------------------------------------- Total investment income 12,249,114 Expenses: ------------------------------------------------------------------------------- Compensation of Manager (Note 2) 4,609,591 ------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 2,633,776 ------------------------------------------------------------------------------- Trustee compensation and expenses (Note 2) 23,631 ------------------------------------------------------------------------------- Administrative services (Note 2) 10,787 ------------------------------------------------------------------------------- Distribution fees -- Class A (Note 2) 1,195,723 ------------------------------------------------------------------------------- Distribution fees -- Class B (Note 2) 2,675,078 ------------------------------------------------------------------------------- Distribution fees -- Class C (Note 2) 340,696 ------------------------------------------------------------------------------- Distribution fees -- Class M (Note 2) 124,469 ------------------------------------------------------------------------------- Distribution fees -- Class R (Note 2) 489 ------------------------------------------------------------------------------- Other 226,988 ------------------------------------------------------------------------------- Non-recurring costs (Note 5) 39,557 ------------------------------------------------------------------------------- Costs assumed by Manager (Note 5) (39,557) ------------------------------------------------------------------------------- Total expenses 11,841,228 ------------------------------------------------------------------------------- Expense reduction (Note 2) (430,300) ------------------------------------------------------------------------------- Net expenses 11,410,928 ------------------------------------------------------------------------------- Net investment income 838,186 ------------------------------------------------------------------------------- Net realized gain on investments (Notes 1 and 3) 140,499,526 ------------------------------------------------------------------------------- Net realized gain on futures contracts (Note 1) 2,083,678 ------------------------------------------------------------------------------- Net realized loss on foreign currency transactions (Note 1) (3,055,696) ------------------------------------------------------------------------------- Net realized gain on written options (Notes 1 and 3) 160,439 ------------------------------------------------------------------------------- Net unrealized depreciation of assets and liabilities in foreign currencies during the period (3,560,791) ------------------------------------------------------------------------------- Net unrealized appreciation of investments, futures contracts and written options during the period 65,528,966 ------------------------------------------------------------------------------- Net gain on investments 201,656,122 ------------------------------------------------------------------------------- Net increase in net assets resulting from operations $202,494,308 ------------------------------------------------------------------------------- |
The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets
(Unaudited)
Six months ended Year ended
January 31 July 31
Increase (decrease) in net assets 2004 2003
-------------------------------------------------------------------------------
Operations:
-------------------------------------------------------------------------------
Net investment income $838,186 $3,762,216
-------------------------------------------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions 139,687,947 (257,257,035)
-------------------------------------------------------------------------------
Net unrealized appreciation of investments
and assets and liabilities in foreign
currencies 61,968,175 436,681,476
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 202,494,308 183,186,657
-------------------------------------------------------------------------------
Contribution from Manager (Note 6) 1,813,908 --
-------------------------------------------------------------------------------
Decrease from capital share transactions
(Note 4) (216,753,718) (158,417,541)
-------------------------------------------------------------------------------
Total increase (decrease) in net assets (12,445,502) 24,769,116
Net assets
-------------------------------------------------------------------------------
Beginning of period 1,690,679,974 1,665,910,858
-------------------------------------------------------------------------------
End of period (including accumulated net
investment loss of $1,654,037 and
$2,492,223, respectively) $1,678,234,472 $1,690,679,974
-------------------------------------------------------------------------------
|
The accompanying notes are an integral part of these financial statements.
Financial highlights**
(For a common share outstanding throughout the period)
CLASS A
---------------------------------------------------------------------------------------------------
Six months
ended
January 31
Per-share 2004 Year ended July 31
operating performance (Unaudited) 2003 2002 2001 2000 1999
---------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $11.60 $10.29 $14.23 $18.69 $16.60 $13.49
---------------------------------------------------------------------------------------------------
Investment operations:
---------------------------------------------------------------------------------------------------
Net investment income (a) .02 .06 .04 .05 .01 .02
---------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.44 1.25 (3.98) (2.98) 3.10 3.15
---------------------------------------------------------------------------------------------------
Total from
investment operations 1.46 1.31 (3.94) (2.93) 3.11 3.17
---------------------------------------------------------------------------------------------------
Less distributions:
---------------------------------------------------------------------------------------------------
From net
investment income -- -- --(d) -- -- --
---------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (1.53) (1.02) (.06)
---------------------------------------------------------------------------------------------------
From return of capital -- -- --(d) --(d) -- --
---------------------------------------------------------------------------------------------------
Total distributions -- -- --(d) (1.53) (1.02) (.06)
---------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.06 $11.60 $10.29 $14.23 $18.69 $16.60
---------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.59*(e) 12.73 (27.67) (16.93) 19.32 23.57
---------------------------------------------------------------------------------------------------
Ratios and supplemental
data
---------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $952,712 $922,788 $841,789 $1,152,135 $913,312 $475,954
---------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .55* 1.15 1.04 1.05 1.07 1.08
---------------------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets (%) .17* .52 .33 .31 .02 .10
---------------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.44* 131.93 149.58 162.94 159.24 126.14
---------------------------------------------------------------------------------------------------
* Not annualized.
** See Note 6 to the financial statements.
(a) Per share net investment income has been determined on the basis of
the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect the
effect of sales charges.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Amount represents less than $0.01 per share.
(e) If the restitution payment described in Note 6 had not been made,
total return for the six months ended January 31, 2004 would have
been 12.50%.
The accompanying notes are an integral part of these financial
statements.
|
Financial highlights**
(For a common share outstanding throughout the period)
CLASS B
----------------------------------------------------------------------------------------------------------
Six months
ended
January 31
Per-share 2004 Year ended July 31
operating performance (Unaudited) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $11.13 $9.95 $13.86 $18.38 $16.46 $13.49
----------------------------------------------------------------------------------------------------------
Investment operations:
----------------------------------------------------------------------------------------------------------
Net investment loss (a) (.02) (.02) (.05) (.07) (.13) (.11)
----------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.38 1.20 (3.86) (2.92) 3.07 3.14
----------------------------------------------------------------------------------------------------------
Total from
investment operations 1.36 1.18 (3.91) (2.99) 2.94 3.03
----------------------------------------------------------------------------------------------------------
Less distributions:
----------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (1.53) (1.02) (.06)
----------------------------------------------------------------------------------------------------------
From return of capital -- -- -- --(d) -- --
----------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (1.53) (1.02) (.06)
----------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.49 $11.13 $9.95 $13.86 $18.38 $16.46
----------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.22*(e) 11.86 (28.21) (17.58) 18.41 22.53
----------------------------------------------------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $504,704 $544,487 $597,784 $960,638 $906,430 $494,452
----------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .93* 1.90 1.79 1.80 1.82 1.83
----------------------------------------------------------------------------------------------------------
Ratio of net investment
loss to average net
assets (%) (.21)* (.23) (.41) (.44) (.73) (.66)
----------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.44* 131.93 149.58 162.94 159.24 126.14
----------------------------------------------------------------------------------------------------------
* Not annualized.
** See Note 6 to the financial statements.
(a) Per share net investment loss has been determined on the basis of
the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect the
effect of sales charges.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Amount represents less than $0.01 per share.
(e) If the restitution payment described in Note 6 had not been made,
total return for the six months ended January 31, 2004 would have
been 12.13%.
The accompanying notes are an integral part of these financial
statements.
|
Financial highlights**
(For a common share outstanding throughout the period)
CLASS C
----------------------------------------------------------------------------------------------------------
Six months
ended For the period
January 31 Feb. 1, 1999+
Per-share 2004 Year ended July 31 to July 31
operating performance (Unaudited) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $11.20 $10.01 $13.95 $18.49 $16.55 $15.81
----------------------------------------------------------------------------------------------------------
Investment operations:
----------------------------------------------------------------------------------------------------------
Net investment loss (a) (.02) (.03) (.05) (.07) (.13) (.05)
----------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.39 1.22 (3.89) (2.94) 3.09 .79
----------------------------------------------------------------------------------------------------------
Total from
investment operations 1.37 1.19 (3.94) (3.01) 2.96 .74
----------------------------------------------------------------------------------------------------------
Less distributions:
----------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (1.53) (1.02) --
----------------------------------------------------------------------------------------------------------
From return of capital -- -- -- --(d) -- --
----------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (1.53) (1.02) --
----------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.57 $11.20 $10.01 $13.95 $18.49 $16.55
----------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.23*(e) 11.89 (28.24) (17.58) 18.43 4.68*
----------------------------------------------------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $59,413 $72,177 $84,065 $136,897 $106,087 $31,963
----------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .93* 1.90 1.79 1.80 1.82 .91*
----------------------------------------------------------------------------------------------------------
Ratio of net investment
loss to average net
assets (%) (.21)* (.24) (.41) (.44) (.73) (.35)*
----------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.44* 131.93 149.58 162.94 159.24 126.14
----------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
** See Note 6 to the financial statements.
(a) Per share net investment loss has been determined on the basis of
the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect the
effect of sales charges.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Amount represents less than $0.01 per share.
(e) If the restitution payment described in Note 6 had not been made,
total return for the six months ended January 31, 2004 would have
been 12.05%.
The accompanying notes are an integral part of these financial
statements.
|
Financial highlights**
(For a common share outstanding throughout the period)
CLASS M
----------------------------------------------------------------------------------------------------------
Six months
ended
January 31
Per-share 2004 Year ended July 31
operating performance (Unaudited) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $11.29 $10.06 $13.98 $18.48 $16.51 $13.49
----------------------------------------------------------------------------------------------------------
Investment operations:
----------------------------------------------------------------------------------------------------------
Net investment income
(loss) (a) (.01) --(d) (.02) (.03) (.08) (.06)
----------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.40 1.23 (3.90) (2.94) 3.07 3.14
----------------------------------------------------------------------------------------------------------
Total from
investment operations 1.39 1.23 (3.92) (2.97) 2.99 3.08
----------------------------------------------------------------------------------------------------------
Less distributions:
----------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (1.53) (1.02) (.06)
----------------------------------------------------------------------------------------------------------
From return of capital -- -- -- --(d) -- --
----------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (1.53) (1.02) (.06)
----------------------------------------------------------------------------------------------------------
Net asset value,
end of period $12.68 $11.29 $10.06 $13.98 $18.48 $16.51
----------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.31*(e) 12.23 (28.04) (17.36) 18.67 22.90
----------------------------------------------------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $27,812 $35,646 $38,493 $62,268 $62,834 $42,359
----------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .80* 1.65 1.54 1.55 1.57 1.58
----------------------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (%) (.08)* .02 (.16) (.19) (.47) (.40)
----------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.44* 131.93 149.58 162.94 159.24 126.14
----------------------------------------------------------------------------------------------------------
* Not annualized.
** See Note 6 to the financial statements.
(a) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(b) Total return assumes dividend reinvestment and does not reflect the
effect of sales charges.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Amount represents less than $0.01 per share.
(e) If the restitution payment described in Note 6 had not been made,
total return for the six months ended January 31, 2004 would have
been 12.22%.
The accompanying notes are an integral part of these financial
statements.
|
Financial highlights**
(For a common share outstanding throughout the period)
CLASS R
----------------------------------------------------------------------------------------------------------
Six months For the
ended period
January 31 Jan. 21, 2003+
Per-share 2004 to July 31
operating performance (Unaudited) 2003
----------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $11.59 $10.57
----------------------------------------------------------------------------------------------------------
Investment operations:
----------------------------------------------------------------------------------------------------------
Net investment income (a) --(d) .01
----------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 1.44 1.01
----------------------------------------------------------------------------------------------------------
Total from
investment operations 1.44 1.02
----------------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.03 $11.59
----------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.42*(e) 9.65*
----------------------------------------------------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $928 $1
----------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .68* .74*
----------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .05* .14*
----------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.44* 131.93
----------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
** See Note 6 to the financial statements.
(a) Per share net investment income has been determined on the basis of
the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Amount represents less than $0.01 per share.
(e) If the restitution payment described in Note 6 had not been made,
total return for the six months ended January 31, 2004 would have
been 12.34%.
The accompanying notes are an integral part of these financial
statements.
|
Financial highlights**
(For a common share outstanding throughout the period)
CLASS Y
----------------------------------------------------------------------------------------------------------
Six months
ended For the period
January 31 April 4, 2000+
Per-share 2004 Year ended July 31 to July 31
operating performance (Unaudited) 2003 2002 2001 2000
----------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $11.67 $10.33 $14.28 $18.71 $18.94
----------------------------------------------------------------------------------------------------------
Investment operations:
----------------------------------------------------------------------------------------------------------
Net investment income (a) .04 .08 .07 .09 .01
----------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 1.45 1.26 (3.98) (2.99) (.24)
----------------------------------------------------------------------------------------------------------
Total from
investment operations 1.49 1.34 (3.91) (2.90) (.23)
----------------------------------------------------------------------------------------------------------
Less distributions:
----------------------------------------------------------------------------------------------------------
From net investment income -- -- (.01) -- --
----------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (1.53) --
----------------------------------------------------------------------------------------------------------
From return of capital -- -- (.03) -- (d) --
----------------------------------------------------------------------------------------------------------
Total distributions -- -- (.04) (1.53) --
----------------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.16 $11.67 $10.33 $14.28 $18.71
----------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.77*(e) 12.97 (27.47) (16.74) (1.21)*
----------------------------------------------------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $132,666 $115,581 $103,779 $91,040 $39,402
----------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .43* .90 .79 .80 .27*
----------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .30* .77 .57 .56 .08*
----------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 56.44* 131.93 149.58 162.94 159.24
----------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
** See Note 6 to the financial statements.
(a) Per share net investment income has been determined on the basis of
the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Amount represents less than $0.01 per share.
(e) If the restitution payment described in Note 6 had not been made,
total return for the six months ended January 31, 2004 would have
been 12.68%.
The accompanying notes are an integral part of these financial
statements.
|
Notes to financial statements
January 31, 2004 (Unaudited)
Note 1
Significant accounting policies
Putnam Research Fund (the "fund") is a series of Putnam Investment Funds (the "trust"), which is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The objective of the fund is to seek capital appreciation by investing primarily in common stocks.
The fund offers class A, class B, class C, class M, class R and class Y shares. Class A shares are sold with a maximum front-end sales charge of 5.25%. Prior to January 28, 2004, the maximum front-end sales charge for class A shares was 5.75%. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge but pay a higher ongoing distribution fee than class A, class M and class R shares, and are subject to a contingent deferred sales charge, if those shares are redeemed within six years of purchase. Class C shares are subject to the same fees and expenses as class B shares, except that class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class M shares are sold with a maximum front-end sales charge of 3.50% and pay an ongoing distribution fee that is higher than class A and class R shares but lower than class B and class C shares. Class R shares are sold without a front-end sales charge and pay an ongoing distribution fee that is higher than class A shares, but lower than class B, class C and class M shares. Class R shares are offered to qualified employee-benefit plans. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee. Class Y shares are sold to certain eligible purchasers including certain defined contribution plans (including corporate IRAs), bank trust departments and trust companies.
Effective April 19, 2004, a 2.00% redemption fee may apply to any shares that are redeemed (either by selling or exchanging into another fund) within 5 days of purchase.
Expenses of the fund are borne pro-rata by the holders of each class of shares, except that each class bears expenses unique to that class (including the distribution fees applicable to such class). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. Shares of each class would receive their pro-rata share of the net assets of the fund, if the fund were liquidated. In addition, the Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets. If no sales are reported -- as in the case of some securities traded over-the-counter -- a security is valued at its last reported bid price. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and, therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign securities taking into account multiple factors, including movements in the U.S. securities markets. 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. Securities quoted in foreign currencies are translated into U.S. dollars at the current exchange rate. Short-term investments having remaining maturities of 60 days or less are valued at amortized cost, which approximates fair value. Other investments, including restricted securities, are valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees.
B) Joint trading account The fund may transfer uninvested cash balances, including cash collateral received under security lending arrangements, into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Investment Management, LLC ("Putnam Management"), the fund's manager, an indirect wholly-owned subsidiary of Putnam, LLC. These balances may be invested in issuers of high-grade short-term investments having maturities of up to 397 days for collateral received under security lending arrangements and up to 90 days for other cash investments.
C) Security transactions and related investment income Security transactions are recorded on the trade date (date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.
Interest income is recorded on the accrual basis. Dividend income is recognized on the ex-dividend date except that certain dividends from foreign securities are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received.
D) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities are recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments.
E) Forward currency contracts The fund may buy and sell forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to protect against a decline in value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of a currency in which securities a fund intends to buy are denominated, when a fund holds cash reserves and short term investments). The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Forward currency contracts outstanding at period end, if any, are listed after the fund's portfolio.
F) Futures and options contracts The fund may use futures and options contracts to hedge against changes in the values of securities the fund owns or expects to purchase. The fund may also write options on securities it owns or in which it may invest to increase its current returns.
The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, or if the counterparty to the contract is unable to perform. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased options are included in realized gains and losses on investment securities.
Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as "variation margin." Exchange-traded options are valued at the last sale price, or if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. Futures and written option contracts outstanding at period end, if any, are listed after the fund's portfolio.
G) Security lending The fund may lend securities, through its agents, to qualified borrowers in order to earn additional income. The loans are collateralized by cash and/or securities in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund's agents; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending is included in investment income on the Statement of operations. At January 31, 2004, the value of securities loaned amounted to $3,851,398. The fund received cash collateral of $4,151,645, which is pooled with collateral of other Putnam funds into 9 issuers of high-grade short-term investments.
H) Line of credit During the period, the fund was entered into a committed line of credit with certain banks. The line of credit agreement included restrictions that the fund would maintain an asset coverage ratio of at least 300% and that borrowings would not exceed prospectus limitations. For the period ended August 6, 2003, the fund had no borrowings against the line of credit. Effective August 6, 2003, the fund no longer participated in a committed line of credit.
I) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986, as amended. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains.
At July 31, 2003, the fund had a capital loss carryover of $739,829,523 available to the extent allowed by tax law to offset future net capital gain, if any. The amount of the carryover and the expiration dates are:
Loss Carryover Expiration ------------------------------- $450,679,075 July 31, 2010 289,150,448 July 31, 2011 |
Pursuant to federal income tax regulations applicable to regulated investment companies, the fund has elected to defer to its fiscal year ending July 31, 2003 $162,386,670 of losses recognized during the period November 1, 2002 to July 31, 2003.
The aggregate identified cost on a tax basis is $1,568,357,943, resulting in gross unrealized appreciation and depreciation of $145,888,360 and $22,702,428, respectively, or net unrealized appreciation of $123,185,932.
J) Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations.
K) 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.
Note 2
Management fee, administrative services and other transactions
Putnam Management is paid for management and investment advisory services quarterly based on the average net assets of the fund. Such fee is based on the following annual rates: 0.65% of the first $500 million of average net assets, 0.55% of the next $500 million, 0.50% of the next $500 million, 0.45% of the next $5 billion, 0.425% of the next $5 billion, 0.405% of the next $5 billion, 0.39% of the next $5 billion and 0.38% thereafter.
Effective January 28, 2004, Putnam Management has agreed to limit its compensation (and, to the extent necessary, bear other expenses) through December 31, 2004 to the extent that the fund's net expenses as a percentage of average net assets exceed the average expense ratio for the fund's Lipper peer group of front-end load funds.
The base management fee is subject to a performance adjustment based on the investment performance of the fund compared to changes in the value of the Standard & Poor's 500 ("S&P 500") composite Stock Price Index. Performance will be calculated for these purposes at the beginning of each fiscal quarter, for the thirty-six month period immediately preceding such quarter or the life of the fund, if shorter. The applicable base fee will be increased or decreased for each calendar quarter by an incentive payment or penalty at the annual rate of 0.01% of the fund's average net assets for each 1.00% increment by which the fund outperforms or underperforms the S&P 500 in excess of 3.00%, subject to a maximum increase or decrease of 0.07% of average net assets. For the period ended January 31, 2004 the base management fee represented an effective annual basic rate of 0.55% of the fund's average net assets before a decrease of $204,418 (0.02% annualized) based on performance.
The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam, LLC. Putnam Investor Services, a division of PFTC, provides investor servicing agent functions to the fund. During the six months ended January 31, 2004, the fund paid PFTC $2,036,602 for these services.
The fund has entered into an arrangement with PFTC whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the fund's expenses. The fund also reduced expenses through brokerage service arrangements. For the six months ended, January 31, 2004, the fund's expenses were reduced by $430,300 under these arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of which $2,292 has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees receive additional fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan") which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan (the "Pension Plan") covering all Trustees of the fund who have served as a Trustee for at least five years. Benefits under the Pension Plan are equal to 50% of the Trustee's average total retainer and meeting fees for the three years preceding retirement. Pension expense for the fund is included in 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 fund has adopted distribution plans (the "Plans") with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management, a wholly-owned subsidiary of Putnam, LLC and Putnam Retail Management GP, Inc., for services provided and expenses incurred by it in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Retail Management at an annual rate up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and 0.50% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively.
For the six months ended January 31, 2004, Putnam Retail Management, acting as underwriter, received net commissions of $67,159 and $2,301 from the sale of class A and class M shares, respectively, and received $1,058,581 and $4,236 in contingent deferred sales charges from redemptions of class B and class C shares, respectively. A deferred sales charge of up to 1.00% and 0.65% is assessed on certain redemptions of class A and class M shares, respectively. For the six months ended January 31, 2004, Putnam Retail Management, acting as underwriter, received $1,303 and no monies on class A and class M redemptions, respectively.
Note 3
Purchases and sales of securities
During the six months ended January 31, 2004, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $968,358,057 and $1,187,787,354, respectively. There were no purchases and sales of U.S. government securities.
Written option transactions during the period are summarized as follows:
Contract Premiums
Amounts Received
----------------------------------------------------------------
Written options
outstanding at
beginning of period 21,247 $12,961
----------------------------------------------------------------
Options opened 430,502 147,478
Options exercised -- --
Options expired (451,749) (160,439)
Options closed -- --
----------------------------------------------------------------
Written options
outstanding at
end of period -- $--
----------------------------------------------------------------
|
Note 4
Capital shares
At January 31, 2004, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:
Six months ended January 31, 2004
----------------------------------------------------------------
Class A Shares Amount
----------------------------------------------------------------
Shares sold 13,105,629 $160,648,811
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
13,105,629 161,678,543
Shares repurchased (19,725,906) (243,084,849)
----------------------------------------------------------------
Net decrease (6,620,277) $(82,436,038)
----------------------------------------------------------------
Year ended July 31, 2003
----------------------------------------------------------------
Class A Shares Amount
----------------------------------------------------------------
Shares sold 24,601,165 $257,129,892
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
24,601,165 257,129,892
Shares repurchased (26,861,435) (277,287,891)
----------------------------------------------------------------
Net decrease (2,260,270) $(20,157,999)
----------------------------------------------------------------
Six months ended January 31, 2004
----------------------------------------------------------------
Class B Shares Amount
----------------------------------------------------------------
Shares sold 2,085,687 $24,407,972
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
2,085,687 24,953,478
Shares repurchased (10,582,804) (124,783,130)
----------------------------------------------------------------
Net decrease (8,497,117) $(100,375,158)
----------------------------------------------------------------
Year ended July 31, 2003
----------------------------------------------------------------
Class B Shares Amount
----------------------------------------------------------------
Shares sold 6,755,639 $68,083,469
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
6,755,639 68,083,469
Shares repurchased (17,922,982) (177,632,127)
----------------------------------------------------------------
Net decrease (11,167,343) $(109,548,658)
----------------------------------------------------------------
Six months ended January 31, 2004
----------------------------------------------------------------
Class C Shares Amount
----------------------------------------------------------------
Shares sold 240,574 $2,833,522
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
240,574 2,897,738
Shares repurchased (1,955,983) (23,208,668)
----------------------------------------------------------------
Net decrease (1,715,409) $(20,375,146)
----------------------------------------------------------------
Year ended July 31, 2003
----------------------------------------------------------------
Class C Shares Amount
----------------------------------------------------------------
Shares sold 1,325,543 $13,218,453
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
1,325,543 13,218,453
Shares repurchased (3,279,795) (32,796,318)
----------------------------------------------------------------
Net decrease (1,954,252) $(19,577,865)
----------------------------------------------------------------
Six months ended January 31, 2004
----------------------------------------------------------------
Class M Shares Amount
----------------------------------------------------------------
Shares sold 178,948 $2,109,389
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
178,948 2,139,449
Shares repurchased (1,143,301) (13,697,019)
----------------------------------------------------------------
Net decrease (964,353) $(11,587,630)
----------------------------------------------------------------
Year ended July 31, 2003
----------------------------------------------------------------
Class M Shares Amount
----------------------------------------------------------------
Shares sold 562,945 $5,729,127
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
562,945 5,729,127
Shares repurchased (1,230,278) (12,445,739)
----------------------------------------------------------------
Net decrease (667,333) $(6,716,612)
----------------------------------------------------------------
Six months ended January 31, 2004
----------------------------------------------------------------
Class R Shares Amount
----------------------------------------------------------------
Shares sold 71,470 $912,882
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
71,470 913,885
Shares repurchased (377) (4,720)
----------------------------------------------------------------
Net increase 71,093 $908,162
----------------------------------------------------------------
For the period January 21, 2003
(commencement of operations) to
July 31, 2003
----------------------------------------------------------------
Class R Shares Amount
----------------------------------------------------------------
Shares sold 120 $1,257
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
120 1,257
Shares repurchased -- --
----------------------------------------------------------------
Net increase 120 $1,257
----------------------------------------------------------------
Six months ended January 31, 2004
----------------------------------------------------------------
Class Y Shares Amount
----------------------------------------------------------------
Shares sold 7,304,555 $85,171,824
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
7,304,555 85,315,215
Shares repurchased (7,126,082) (88,059,732)
----------------------------------------------------------------
Net increase (decrease) 178,473 $(2,887,908)
----------------------------------------------------------------
Year ended July 31, 2003
----------------------------------------------------------------
Class Y Shares Amount
----------------------------------------------------------------
Shares sold 3,628,690 $37,272,525
----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
----------------------------------------------------------------
3,628,690 37,272,525
Shares repurchased (3,775,623) (39,690,189)
----------------------------------------------------------------
Net decrease (146,933) $(2,417,664)
----------------------------------------------------------------
|
Note 5
Regulatory matters and litigation
On November 13, 2003, Putnam Management agreed to entry of an order by the Securities and Exchange Commission in partial resolution of administrative and cease-and-desist proceedings initiated by the SEC on October 28, 2003 in connection with alleged excessive short-term trading by at least six Putnam Management investment professionals. The SEC's findings reflect that four of those employees engaged in such trading in funds over which they had investment decision-making responsibility and had access to non-public information regarding, among other things, current portfolio holdings and valuations. The six individuals are no longer employed by Putnam Management. Under the order, Putnam Management will make restitution for losses attributable to excessive short-term trading by Putnam employees, institute new employee trading restrictions and enhanced employee trading compliance, retain an independent compliance consultant, and take other remedial actions. Putnam Management neither admitted nor denied the order's findings, which included findings that Putnam Management willfully violated provisions of the federal securities laws. A civil monetary penalty and other monetary relief, if any, will be determined at a later date. If a hearing is necessary to determine the amounts of such penalty or other relief, Putnam Management will be precluded from arguing that it did not violate the federal securities laws in the manner described in the SEC order, the findings set forth in the SEC order will be accepted as true by the hearing officer and additional evidence may be presented. Putnam Management, and not the investors in any Putnam fund, will bear all costs, including restitution, civil penalties and associated legal fees. Administrative proceedings instituted by the Commonwealth of Massachusetts on October 28, 2003 against Putnam Management in connection with alleged market-timing activities by Putnam employees and by participants in some Putnam-administered 401(k) plans are pending. Putnam Management has committed to make complete restitution for any losses suffered by Putnam shareholders as a result of any improper market-timing activities by Putnam employees or within Putnam-administered 401(k) plans.
The SEC's and Commonwealth's allegations and related matters also serve as the general basis for numerous lawsuits, including purported class action lawsuits filed against Putnam Management and certain related parties, including certain Putnam funds. Putnam Management has agreed to bear any costs incurred by Putnam funds in connection with these lawsuits. Based on currently available information, Putnam Management believes that the likelihood that the pending private lawsuits and purported class action lawsuits will have a material adverse financial impact on the fund is remote, and the pending actions are not likely to materially affect its ability to provide investment management services to its clients, including the Putnam funds.
For the period ended January 31, 2004, Putnam Management has assumed $39,557 for legal, shareholder servicing and communication, audit, and Trustee fees incurred by the fund in connection with these matters.
Review of these matters by counsel for Putnam Management and by separate independent counsel for the Putnam funds and their independent Trustees is continuing. In addition, Marsh & McLennan Companies, Inc., Putnam Management's parent company, has engaged counsel to conduct a separate review of Putnam Management's policies and controls related to short-term trading. The fund may experience increased redemptions as a result of these matters, which could result in increased transaction costs and operating expenses.
Note 6
Other matters
In connection with an ongoing review of compliance procedures and controls, Putnam Management discovered that in early January 2001, certain Putnam employees had willfully circumvented controls in connection with the correction of operational errors with respect to a 401(k) client's investment in certain Putnam Funds, which led to losses in the fund. On February 19, 2004, the fund recorded a receivable for restitution from Putnam of approximately $1.8 million as of January 31, 2004, representing approximately $.014 per share outstanding as of such date. The fund's Paid-in-Capital account reflects a corresponding increase. Had this payment been made when the error occurred, it would have had the effect of increasing the net asset value of each class of the fund's shares for each day during the period by $0.01 to $0.02 per share. Putnam and the fund's trustees are in the process of finalizing the restitution amount. Additional amounts may be warranted. Putnam has also made a number of personnel changes, including senior managers, and has begun to implement changes in procedures. Putnam has informed the SEC, the Funds' Trustees and independent auditors. The restitution made by Putnam is not reflected in the audited information appearing in the fund's financial highlights table and statement of changes in net assets.
PUTNAM INVESTMENT FUNDS
Putnam Research Fund
FORM N-1A
PART C
OTHER INFORMATION
Item 23. Exhibits
(a) Agreement and Declaration of Trust, as amended on January 6, 1995 --
Incorporated by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement.
(b) By-Laws as amended through July 21, 2000 -- Incorporated by
reference to Post-Effective Amendment No. 33 to Registrant's
Registration Statement.
(c)(1) Portions of Agreement and Declaration of Trust Relating to
Shareholders' Rights -- Incorporated by reference to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement.
(c)(2) Portions of By-Laws Relating to Shareholders' Rights --
Incorporated by reference to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement.
(d) Management Contract dated December 2, 1994, as most recently revised
on March 12, 2001 -- Incorporated by reference to Post-Effective
Amendment No. 45 to the Registrant's Registration Statement.
(e)(1) Distributor's Contract dated December 2, 1994 -- Incorporated by
reference to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement.
(e)(2) Form of Dealer Sales Contract -- Incorporated by reference to
Pre-effective Amendment No. 1 to the Registrant's Registration
Statement.
(e)(3) Form of Financial Institution Sales Contract -- Incorporated by
reference to Pre-effective Amendment No. 1 to the Registrant's
Registration Statement.
(f) Trustee Retirement Plan dated October 4, 1996 -- Incorporated by
reference to Post-Effective Amendment No. 10 to the Registrant's
Registration Statement.
(g) Custodian Agreement with Putnam Fiduciary Trust Company dated May 3,
1991, as amended June 1, 2001 -- Incorporated by reference to
Post-Effective Amendment No. 48 to the Registrant's Registration
Statement.
(h)(i) Investor Servicing Agreement dated June 3, 1991 with Putnam
Fiduciary Trust Company -- Incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement.
(h)(2) Letter of Indemnity dated December 18, 2003 with Putnam
Investment Management.
(i) Opinion of Ropes & Gray, including consent -- Incorporated by
reference to Post-Effective Amendment No. 44 to the Registrant's Registration
Statement.
(j) Consent of Independent Accountants.
(k) Not applicable.
(l) Investment Letter from Putnam Investments, LLC to the Registrant --
Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement.
(m)(1) Class A Distribution Plan and Agreement dated April 1, 2000 --
Incorporated by reference to Post-Effective Amendment No. 32 to the
Registrant's Registration Statement.
(m)(2) Class B Distribution Plan and Agreement dated April 1, 2000 --
Incorporated by reference to Post-Effective Amendment No. 32 to the
Registrant's Registration Statement.
(m)(3) Class C Distribution Plan and Agreement dated April 1, 2000 --
Incorporated by reference to Post-Effective Amendment No. 32 to the
Registrant's Registration Statement.
(m)(4) Class M Distribution Plan and Agreement dated April 1, 2000 --
Incorporated by reference to Post-Effective Amendment No. 32 to the
Registrant's Registration Statement.
(m)(5) Class R Distribution Plan and Agreement dated November 14, 2003
-Incorporated by reference to Post-Effective Amendment No. 60 to the
Registrant's Registration Statement.
(m)(6) Form of Dealer Service Agreement -- Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement.
(m)(7) Form of Financial Institution Service Agreement -- Incorporated
by reference to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement.
(n) Rule 18f-3 Plan -- Incorporated by reference to Post-Effective
Amendment No. 54 to the Registrant's Registration Statement.
(p)(1) The Putnam Funds Code of Ethics -- Incorporated by reference to
Post-Effective Amendment No. 32 to the Registrant's Registration
Statement.
(p)(2) Putnam Investments Code of Ethics-- Incorporated by reference to
Post-Effective Amendment No. 59 to the Registrant's Registration
Statement.
Item 24. Persons Controlled by or under Common Control with Registrant
None.
Item 25. Indemnification
The information required by this item is incorporated herein by reference to the Registrant's Initial Registration Statement on Form N-1A under the Investment Company Act of 1940 (File No. 811-7237).
Items 26 and 27.
Item 26. Business and Other Connections of Investment Adviser
Except as set forth below, the directors and officers of the Registrant's investment adviser have been engaged during the past two fiscal years in no business, vocation or employment of a substantial nature other than as directors or officers of the investment adviser or certain of its corporate affiliates. Certain officers of the investment adviser serve as officers of some or all of the Putnam funds. The address of the investment adviser, its corporate affiliates and the Putnam Funds is One Post Office Square, Boston, Massachusetts 02109.
Name Non-Putnam business and other connections
---- -----------------------------------------
Yannick Aron Prior to June 2002, Quantitative Analyst and
Vice President Risk Manager, New Flag Asset Management
Limited, 8-10 Haymarket, London, England;
Prior to December 2002, Consultant, Reech
Capital PLC, CNU Tower, 1 Undershaft,
London, England.
Matthew P. Beagle Prior to August 2002, Manager, DiamondCluster
Assistant Vice President International, Suite 3000, John Hancock Center,
N. Michigan Ave., Chicago, IL 60611
Navin Belani Prior to December 2002, Associate, Salomon
Vice President Smith Barney, 388 Greenwich St., New York, NY
10013
Michael Boam Prior to June 2002, Credit Analyst and Deputy
Vice President Portfolio Manager, New Flag Asset Management
Limited, 8-10 Haymarket, London, England
Daniel S. Choquette Prior to September 2002, Fixed Income Derivatives
Senior Vice President Trader, Lehman Brothers, 745 7th Avenue,
New York, NY 10019
John R.S. Cutler Member, Burst Media, L.L.C., 10 New England
Vice President Executive Park, Burlington, MA 01803
Timothy Francis Edmonstone Prior to December 2002, Vice President and
Vice President Equities Analyst, BT Funds Management, Chifley
Tower, One Chifley Place, Sydney NSW 2000,
Australia
Irene M. Esteves Board of Directors Member, SC Johnson
Managing Director Commercialmarkets, 8310 16th St., Stutevant,
WI 53177; Board of Directors Member, Mrs.
Bairds Bakeries, 515 Jones St., Suite 200,
Fort Worth, Texas 76102
Gian D. Fabbri Partner, KF Style, LLC, 73 Charles St., Boston,
Assistant Vice President MA 02114
Maria Garcia-Lomas Prior to July 2003, Research Analyst, J.P. Morgan
Vice President Securities Ltd., 125 London Wall, London, England
Haralabos E. Gakidis Prior to October 2003, Head of Consulting and
Vice President Business Development, The RISConsulting Group LLC,
420 Boylston Street, Suite 302, Boston, MA 02116
Charles E. Haldeman Prior to October 2002, Chief Executive Officer,
President and Chief Delaware Management Holdings, Inc., 2005 Market
Executive Officer Street, Philadelphia, PA 19103
Carolyn J. Herzog Prior to August, 2002, Consultant, Ajilon, One
Assistant Vice President Van de Graaf Road, Burlington, MA 01803
Andrew Holmes Prior to June 2002, Director, New Flag Asset
Senior Vice President Management Limited, 8-10 Haymarket, London, England
Anna M. Lester Prior to June 2002, Owner, Sloan Sweatshirt Company,
Assistant Vice President 50 Memorial Drive, Cambridge, MA 02142
David Mael Prior to April 2002, Senior Consultant, Solutions
Senior Vice President Atlantic, 109 Kingston St., Boston, MA 02210
Cyril S. Malak Prior to April 2002, Associate, JPMorgan Chase,
Vice President 270 Park Ave., New York, NY 10019
Michael Mills Prior to June 2002, Senior Credit Analyst, New Flag
Vice President Asset Management Limited, 8-10 Haymarket, London,
England
Donald E. Mullin Corporate Representative and Board Member, Delta
Senior Vice President Dental Plan of Massachusetts, 10 Presidents Landing,
P.O. Box 94104, Medford, MA 02155
Terrence W. Norchi Prior to April 2002, Senior Vice President, Citigroup
Senior Vice President Asset Management, 100 First Stamford Place, Stamford,
CT 06902
Brian P. O'Toole Prior to June 2002, Managing Director, Citigroup
Managing Director Asset Management, 100 First Stamford Place, Stamford,
CT 06902
Walton D. Pearson Prior to February 2003, Senior Vice President and
Senior Vice President Senior Portfolio Manager, Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, NY 10105
Michael C. Petro Prior to October 2002, Senior Research Associate, RBC
Vice President Dain Rauscher, 60 S. 6th St., Minneapolis, MN 55402
Lauritz Ringdal Prior to August 2002, Research Analyst, Standard Bank
Vice President London, Cannon Bridge House, 25 Dowgate Hill, London,
England
Richard S. Robie III Prior to November 2001, Senior Vice President, Old
Managing Director Mutual (US) Asset Managers, One International Place,
Boston, MA 02110
David H. Schiff Prior to July 2002, Principal, State Street Global
Senior Vice President Advisors, Two International Place, Boston, MA 02110
Justin M. Scott Director, DSI Proprieties (Neja) Ltd., Epping Rd.,
Managing Director Reydon, Essex CM19 5RD
Anton D. Simon Prior to June 2002, Chief Investment Officer, New Flag
Senior Vice President Asset Management Limited, 8-10 Haymarket, London, England
Julian Wellesley Prior to November 2002, Senior Vice President, Schroder
Senior Vice President Investment Management Inc., 875 Third Avenue, New York,
NY 10020
Eric Wetlaufer President and Member of Board of Directors, The Boston
Managing Director Security Analysts Society, Inc., 100 Boylston St.,
Suite 1050, Boston, MA 02110
Fifield W. Whitman Prior to August 2002, Vice President and Portfolio
Vice President Manager, Credit Suisse Asset Management, 3 Exchange
Square, 44th Floor, Hong Kong
James Yu Prior to October 2002, Vice President and Portfolio
Vice President Manager, John Hancock Funds, 101 Huntington Ave.,
Boston, MA 02199
|
Item 27. Principal Underwriter
(a) Putnam Retail Management Limited Partnership is the principal underwriter for each of the following investment companies, including the Registrant:
Putnam American Government Income Fund, Putnam Arizona Tax Exempt Income Fund, Putnam Asset Allocation Funds, Putnam California Tax Exempt Income Fund, Putnam Capital Appreciation Fund, Putnam Classic Equity Fund, Putnam Convertible Income-Growth Trust, Putnam Discovery Growth Fund (formerly Putnam Voyager Fund II), Putnam Diversified Income Trust, Putnam Equity Income Fund, Putnam Europe Equity Fund (formerly Putnam Europe Growth Fund), Putnam Florida Tax Exempt Income Fund, Putnam Funds Trust, The George Putnam Fund of Boston, Putnam Global Equity Fund, Putnam Global Income Trust, Putnam Global Natural Resources Fund, The Putnam Fund for Growth and Income, Putnam Health Sciences Trust, Putnam High Yield Trust, Putnam High Yield Advantage Fund, Putnam Income Fund, Putnam Intermediate U.S. Government Income Fund, Putnam International Equity Fund (formerly Putnam International Growth Fund), Putnam Investment Funds, Putnam Investors Fund, Putnam Massachusetts Tax Exempt Income Fund, Putnam Michigan Tax Exempt Income Fund, Putnam Minnesota Tax Exempt Income Fund, Putnam Money Market Fund, Putnam Municipal Income Fund, Putnam New Jersey Tax Exempt Income Fund, Putnam New Opportunities Fund, Putnam New York Tax Exempt Income Fund, Putnam Ohio Tax Exempt Income Fund, Putnam OTC & Emerging Growth Fund, Putnam Pennsylvania Tax Exempt Income Fund, Putnam Tax Exempt Income Fund, Putnam Tax Exempt Money Market Fund, Putnam Tax-Free Income Trust, Putnam Tax Smart Funds Trust, Putnam U.S. Government Income Trust, Putnam Utilities Growth and Income Fund, Putnam Variable Trust, Putnam Vista Fund, Putnam Voyager Fund.
(b) The directors and officers of the Registrant's principal underwriter are listed below. None of the officers are officers of the Registrant except:
Name Position and Offices with Registrant Richard Monaghan Vice President Gordon Silver Vice President |
The principal business address of each person is One Post Office Square, Boston, MA 02109:
Name Position and Office with the Underwriter ----------------------------------------------------------------------------- Aaron III, Jefferson F. Senior Vice President Ahearn, Paul D. Assistant Vice President Ahonen, Jennifer D. Vice President Alpaugh, Christopher S. Senior Vice President Amisano, Paulette C. Vice President Arends, Michael K. Senior Vice President Asher, Steven E. Senior Vice President Avery, Scott A. Senior Vice President Ayala-Macey, Ann C. Assistant Vice President Aymond, Christian E. Senior Vice President Babcock III, Warren W. Senior Vice President Baker, Christopher H. Vice President Baker, Erin L. Assistant Vice President Barker, Andrew R. Senior Vice President Barnett, William E. Vice President Barrett, Thomas Senior Vice President Bartony, Paul A. Assistant Vice President Beatty, Elizabeth A. Vice President Beatty, Steven M. Senior Vice President Bergeron, Christopher E. Vice President Beringer, Thomas C. Senior Vice President Blackall, William B. Vice President Borden, Richard S. Vice President Bosinger, Paul C. Vice President Bouchard, Keith R. Senior Vice President Bradford Jr., Linwood E. Managing Director Brady, Jeremy V. Assistant Vice President Brandt, Sarah J. Assistant Vice President Brennan, Sean M. Assistant Vice President Bromberger, Steven L. Assistant Vice President Buckner, Gail D. Senior Vice President Bumpus, James F. Managing Director Bunker, Christopher M. Senior Vice President Burns, Robert J. Assistant Vice President Bush, Jessica Scoon Assistant Vice President Cabana, Susan D. Senior Vice President Call, Timothy W. Senior Vice President Callinan, Richard E. Vice President Campbell, Christopher F. Assistant Vice President Caramazza, Pierre C. Vice President Card, Victoria R. Assistant Vice President Carey, Christopher P. Vice President Carlson, Erik C. Assistant Vice President Caruso, Robert M. Vice President Casey, David M. Senior Vice President Cass, William D. Senior Vice President Caswell, Kendra L. Assistant Vice President Ceruolo, Christopher Vice President Chang, America J. Assistant Vice President Chapman, Frederick Vice President Church, Brian T. Vice President Clark, James F. Assistant Vice President Colman, Donald M. Vice President Condon, Meagan L. Vice President Condron, Brett P. Vice President Coneeny, Mark L. Managing Director Connelly, Donald A. Senior Vice President Connolly, William T. Managing Director Cooley, Jonathan A. Vice President Corbett, Dennis T. Senior Vice President Corvinus, F. Nicholas Managing Director Corwin, Kathleen K. Vice President Cosentino, Joseph D. Assistant Vice President Coveney, Anne M. Senior Vice President Covington, Ryan R. Vice President Crean, Jeremy P. Assistant Vice President Cristo, Chad H. Senior Vice President Croft, Ariane D. Assistant Vice President Crotty, Kenneth Brian Assistant Vice President Curry, John D. Senior Vice President Dabney, Richard W. Senior Vice President Dahill, Jessica E. Vice President Damon, James G. Vice President Davidian, Raymond A. Vice President Days, Nancy M. Assistant Vice President DeAngelis, Adam Vice President DeFao, Michael E. Vice President DeGregorio Jr., Richard A. Assistant Vice President DeNitto, James P. Vice President Demmler, Joseph L. Managing Director Dempsey, Thomas F. Vice President Dence, Mark A. Vice President Derbyshire, Ralph C. Managing Director Dewey Jr., Paul S. Senior Vice President DiBuono, Jeffrey P. Assistant Vice President DiGiacomo, Jill M. Assistant Vice President Donadio, Joyce M. Vice President Doyle, Michelle Anne Assistant Vice President Economou, Stefan G. Assistant Vice President Eidelberg, Kathleen E. Assistant Vice President Elder, Michael D. Managing Director Emhof, Joseph R. Senior Vice President Esteves, Irene M. Sr Managing Director Ethington, Robert H. Assistant Vice President Fanning, Virginia A. Senior Vice President Fardy, Michael S. Vice President Favaloro, Beth A. Senior Vice President Felan III, Catarino Vice President Feldman, Susan H. Senior Vice President Fiedler, Stephen J. Vice President Fishman, Mitchell B. Managing Director Fleming, Robert A. Assistant Vice President Flynn, Kevin M. Vice President Foley, Timothy P. Senior Vice President Forrester, Gordon M. Managing Director Foster, Laura G. Vice President Fronc, Richard Joseph Assistant Vice President Gaudette, Marjorie B. Vice President Gelinas, Christopher S. Assistant Vice President Giessler, Todd C. Vice President Gipson, Zachary A. Vice President Graham, Trevor C. Assistant Vice President Grant, Lisa M. Vice President Grant, Mitchell T. Managing Director Greenwood, Julie M. Assistant Vice President Greenwood, Todd M. Assistant Vice President Gundersen, Jan S. Vice President Hachey, Andrew J. Senior Vice President Hagan IV, J. Addison Vice President Haines, James B. Vice President Halloran, James E. Senior Vice President Halloran, Thomas W. Managing Director Hartigan, Craig W. Senior Vice President Hartigan, Maureen A. Vice President Hassinger, Aaron D. Assistant Vice President Herman, C. Christopher Senior Vice President Herold, Karen Assistant Vice President Hess Jr., William C. Vice President Hill, Kelli K. Senior Vice President Holland, Jeffrey K. Vice President Holmes, Maureen A. Senior Vice President Holt, Michael A. Assistant Vice President Hooley Jr., Daniel F. Vice President Howe, Denise M. Assistant Vice President Howley, Sean J. Senior Vice President Hoyt, Paula J. Vice President Hughes, Carolyn Senior Vice President Hyland, John P. Vice President Iglesias, Louis X. Senior Vice President Iris, Stefan K. Assistant Vice President Jean, Ellen F. Assistant Vice President Jeans, Kathleen A. Assistant Vice President Jones, Thomas A. Senior Vice President Jordan, Stephen R. Assistant Vice President Kapinos, Peter J. Senior Vice President Kay, Karen R. Senior Vice President Kelley, Brian J. Senior Vice President Kelly, A. Siobhan Senior Vice President Kelly, David Managing Director Kennedy, Daniel J. Senior Vice President Kerivan, John R. Senior Vice President Kersten, Charles N. Vice President King, Brian Francis Vice President Kinsman, Anne M. Senior Vice President Kircher, Richard T. Assistant Vice President Kirk Kahn, Deborah H. Senior Vice President Kline, Bonnie S. Assistant Vice President Knutzen, Erik L. Managing Director Kokos, Casey T. Assistant Vice President Komodromos, Costas G. Senior Vice President Kotsiras, Steven Vice President Kringdon, Joseph D. Managing Director LaGreca, Jennifer J. Assistant Vice President Lacascia, Charles M. Senior Vice President Lacour, Jayme J. Assistant Vice President Landers, Michael J. Vice President Larson, John R. Vice President Lathrop, James D. Senior Vice President Lawson, Louise A. Vice President Legge, Deirdre M. Vice President Levy, Eric S. Managing Director Levy, Norman S. Senior Vice President Lewandowski Jr., Edward V. Senior Vice President Lighty, Brian C. Assistant Vice President Link, Christopher H. Vice President Lohmeier, Andrew Vice President Loomis, Marcy R. Assistant Vice President Lukens, James W. Senior Vice President Mackey, Paul Stuart Assistant Vice President Maglio, Nancy T. Assistant Vice President Mahoney, Julie M. Vice President Malonson, Michelle T. Assistant Vice President Mansfield, Scott D. Vice President Martin, David M. Vice President Martin, Kevin J. Assistant Vice President Massey, Shannon M. Assistant Vice President McCafferty, Karen A. Senior Vice President McCarthy, Anne B. Assistant Vice President McCarthy, Conor W. Senior Vice President McCollough, Martha J. Assistant Vice President McConville, Paul D. Senior Vice President McCullough, Ronald L. Senior Vice President McCutcheon, Bruce A. Senior Vice President McDermott, Robert J. Vice President McDonough, Timothy M. Assistant Vice President McInis, Brian S. Vice President McKenna, Mark J. Managing Director Mehta, Ashok Senior Vice President Metelmann, Claye A. Senior Vice President Michejda, Marek A. Senior Vice President Mikami, Darryl K. Managing Director Miller, Bart D. Senior Vice President Mills, Ronald K. Vice President Minsk, Judith Vice President Mintzer, Matthew P. Senior Vice President Moffitt, Kevin L. Vice President Molesky, Kevin P. Vice President Monaghan, Richard A. Director Monahan, Kimberly A. Vice President Moody, Paul R. Senior Vice President Moret, Mitchell L. Senior Vice President Nadherny, Robert Charles Managing Director Nakamura, Denise-Marie Senior Vice President Nardone, Laura E. Assistant Vice President Nelson, Brian W. Vice President Nickodemus, John P. Managing Director Nickolini, Michael A. Assistant Vice President Nickse, Gail A. Assistant Vice President Nicolazzo, Jon C. Senior Vice President Nielson, James D. Assistant Vice President Noble, John D. Senior Vice President Nowak, Kristin M. Assistant Vice President O'Callaghan, John Senior Vice President O'Connell Jr., Paul P. Vice President O'Connor, Brian P. Senior Vice President O'Connor, Matthew P. Senior Vice President O'Sullivan, Shawn M. Vice President Olsen, Stephen Assistant Vice President Olson, Christopher W. Vice President Otsuka, Fumihiko Senior Vice President Palmer, Patrick J. Senior Vice President Patton, Robert J. Senior Vice President Perkins, Erin M. Vice President Phoenix, Joseph T. Managing Director Piersol, Willow B. Vice President Platt, Thomas R. Senior Vice President Prina, Paul Senior Vice President Pulkrabek, Scott M. Senior Vice President Puzzangara, John C. Vice President Quinn, Brian J. Vice President Reed, Frank C. Vice President Regner, Thomas M. Managing Director Reid, Sandra L. Vice President Reilly, Michael A. Vice President Rickenbach, Christian R. Assistant Vice President Rider, Wendy A. Senior Vice President Riley, Megan G. Assistant Vice President Ritter, Jesse D. Assistant Vice President Rodammer, Kris Senior Vice President Rosalanko, Thomas J. Managing Director Rose, Laura Assistant Vice President Rosmarin, Adam L. Vice President Rountree, G. Manning Senior Vice President Rowe, Robert B. Senior Vice President Ruys de Perez, Charles A. Managing Director Ryan, Deborah A. Vice President Ryan, William M. Senior Vice President Salsman, Elizabeth P. Assistant Vice President Saunders, Catherine A. Managing Director Saur, Karl W. Vice President Sawyer, Matthew A. Senior Vice President Schaub, Gerald D. Vice President Schultz, Susan L. Assistant Vice President Schwartz, Brian M. Assistant Vice President Segers, Elizabeth R. Managing Director Seward, Lindsay H. Assistant Vice President Shanahan, Christopher W. Vice President Short Jr., Harold P. Senior Vice President Short, Jonathan D. Senior Vice President Siebold, Mark J. Vice President Siemon Jr., Frank E. Vice President Silva, J. Paul Senior Vice President Silver, Gordon H. Sr Managing Director Sliney, Michael J. Vice President Sorenson, Carolyn L. Assistant Vice President Spiegel, Steven Sr Managing Director Spigelmeyer III, Carl M. Vice President Spooner, Andrew C. Assistant Vice President Squires, Melissa H. Vice President Stairs, Ben Senior Vice President Stark, Kerri A. Vice President Stickney, Paul R. Senior Vice President Storkerson, John K. Senior Vice President Stuart, James F. Vice President Sullivan, Brian L. Senior Vice President Sullivan, Elaine M. Senior Vice President Sweeney, Brian S. Vice President Sweeney, Janet C. Senior Vice President Taber, Rene B. Vice President Tanner, B. Iris Vice President Tassinari, Michael J. Assistant Vice President Tavares, April M. Vice President Telling, John R. Senior Vice President Terry, Kimberley A. Assistant Vice President Tierney, Tracy L. Assistant Vice President Totovian, James H. Assistant Vice President Tyrie, David C. Managing Director Urban, Elke R. Assistant Vice President Valentin, Carmen Assistant Vice President Vaughan, Lindsey G. Senior Vice President Wadera-Sandhu, Jyotsana Assistant Vice President Wallace, Stephen Vice President Walsh, Julia A. Vice President Weiss, Manuel Managing Director Werths, Beth K. Vice President Whitaker, J. Greg Senior Vice President Whiting, Amanda M. Vice President Wilde, Michael R. Assistant Vice President Williams, Christopher J. Assistant Vice President Williams, Jason M. Vice President Wolfson, Jane Senior Vice President Woolverton, William H. Managing Director Young, Kathleen M. Vice President Zechello, Steven R. Vice President Zografos, Laura J. Senior Vice President deMont, Lisa M. Senior Vice President |
Item 28. Location of Accounts and Records
Persons maintaining physical possession of accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder are Registrant's Clerk, Judith Cohen; Registrant's investment adviser, Putnam Investment Management LLC; Registrant's principal underwriter, Putnam Retail Management Limited Partnership; Registrant's custodian, Putnam Fiduciary Trust Company ("PFTC"); and Registrant's transfer and dividend disbursing agent, Putnam Investor Services, a division of PFTC. The address of the Clerk, investment adviser, principal underwriter, custodian and transfer and dividend disbursing agent is One Post Office Square, Boston, Massachusetts 02109.
Item 29. Management Services
None.
Item 30. Undertakings
None.
NOTICE
A copy of the Agreement and Declaration of Trust of Putnam Investment Funds is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the relevant series of the Registrant.
POWER OF ATTORNEY
I, the undersigned Officer of each of the funds listed on Schedule A hereto, hereby severally constitute and appoint John Hill, George Putnam III, Patricia Flaherty, John W. Gerstmayr and Bryan Chegwidden, and each of them singly, my true and lawful attorneys, with full power to them and each of them, to sign for me, and in my name and in the capacities indicated below, the Registration Statements on Form N-1A or Form N-14 of each of the funds listed on Schedule A hereto and any and all amendments (including post-effective amendments) to said Registration Statements and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto my said attorneys, and each of them acting alone, full power and authority to do and perform each and every act and thing requisite or necessary to be done in the premises, as fully to all intents and purposes as he might or could do in person, and hereby ratify and confirm all that said attorneys or any of them may lawfully do or cause to be done by virtue thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Charles E. Porter
--------------------------- Executive Vice President; March 19, 2004
Charles E. Porter Treasurer and Principal
Executive Officer
|
Schedule A
Putnam American Government Income Fund
Putnam Arizona Tax Exempt Income Fund
Putnam Asset Allocation Funds
Putnam California Tax Exempt Income Fund
Putnam Capital Appreciation Fund
Putnam Classic Equity Fund
Putnam Convertible Income-Growth Trust
Putnam Diversified Income Trust
Putnam Discovery Growth Fund
Putnam Equity Income Fund
Putnam Europe Equity Fund
Putnam Florida Tax Exempt Income Fund
Putnam Funds Trust
The George Putnam Fund of Boston
Putnam Global Equity Fund
Putnam Global Income Trust
Putnam Global Natural Resources Fund
The Putnam Fund for Growth and Income
Putnam Health Sciences Trust
Putnam High Yield Advantage Fund
Putnam High Yield Trust
Putnam Income Fund
Putnam Intermediate U.S. Government Income Fund
Putnam International Equity Fund
Putnam Investment Funds
Putnam Investors Fund
Putnam Massachusetts Tax Exempt Income Fund
Putnam Michigan Tax Exempt Income Fund
Putnam Minnesota Tax Exempt Income Fund
Putnam Money Market Fund
Putnam Municipal Income Fund
Putnam New Jersey Tax Exempt Income Fund
Putnam New Opportunities Fund
Putnam New York Tax Exempt Income Fund
Putnam Ohio Tax Exempt Income Fund
Putnam OTC & Emerging Growth Fund
Putnam Pennsylvania Tax Exempt Income Fund
Putnam Tax Exempt Income Fund
Putnam Tax Exempt Money Market Fund
Putnam Tax-Free Income Trust
Putnam Tax Smart Funds Trust
Putnam U.S. Government Income Trust
Putnam Utilities Growth and Income Fund
Putnam Variable Trust
Putnam Vista Fund
Putnam Voyager Fund
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the fund certifies that it has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Boston, and The Commonwealth of Massachusetts, on the 14th day of April, 2004.
Putnam Investment Funds
By: /s/ Charles E.Porter, Executive Vice President |
Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement of Putnam Investment Funds has been signed below by the following persons in the capacities and on the dates indicated:
Signature Title
John A. Hill Chairman of the Board; Trustee
George Putnam, III President; Trustee
Charles E. Porter Executive Vice President; Treasurer and
Principal Financial Officer
Steven D. Krichmar Vice President and Principal Financial Officer
Michael T. Healy Assistant Treasurer and
Principal Accounting Officer
Jameson A. Baxter Trustee
Charles B. Curtis Trustee
Ronald J. Jackson Trustee
Paul L. Joskow Trustee
Elizabeth T. Kennan Trustee
John H. Mullin, III Trustee
Robert E. Patterson Trustee
A.J.C. Smith Trustee
W. Thomas Stephens Trustee
W. Nicholas Thorndike Trustee
By: /s/ Charles E. Porter,
as Attorney-in-Fact
April 14, 2004
|
Exhibit Index
Item 23 Exhibit
(h)(2) Letter of Indemnity dated December 18, 2003 with Putnam Investment Management
(j) Consent of Independent Accountants.
CONSENT OF INDEPENDENT AUDITORS
Board of Trustees and Shareholders
Putnam Investment Funds
We consent to the use of our reports dated September 4, 2003, incorporated by reference in this Registration Statement to the Putnam Research Fund and to the reference of our firm under the captions "Financial Highlights" in the prospectuses and Independent Auditors and Financial Statements" in the Statement of Additional Information.
/s/KPMG LLP Boston, Massachusetts April 13, 2004 |
December 18, 2003
The Putnam Funds
One Post Office Square
Boston, MA 02109
Re: Letter of Indemnity
Ladies and Gentlemen:
Reference is made to the administrative proceedings (the "Administrative Proceedings") commenced on October 28, 2003 against Putnam Investment Management LLC ("Putnam") by the Securities and Exchange Commission and by the Massachusetts Securities Division alleging various matters related to market timing or other improper trading activity in Putnam Fund shares. Putnam serves as investment manager for each of the Putnam Funds (the "Funds") pursuant to Management Contracts which are subject to termination by the Funds on 60 days notice. Putnam is an indirect wholly-owned subsidiary of Putnam Investments LLC, which is in turn an indirect majority-owned subsidiary of March & McLennan Companies Inc.
Whereas the independent trustees of the Funds have undertaken various investigations of the matters alleged in the Administrative Proceedings; and
Whereas these matters and related matters (such as the fair valuation of portfolio holdings, the disclosure of portfolio holdings and prospectus disclosures related to the foregoing) may be the basis of further regulatory actions involving or potentially affecting the Funds or Putnam;
Whereas these matters and related matters are the basis in whole or in part for numerous private actions brought by shareholders of the Funds, in many cases as purported class actions or derivative actions, variously against the Funds, their Trustees and officers, Putnam and certain other parties (the "Private Litigation"); and
Whereas these matters and related matters may be the basis for further private actions against the Funds, their Trustees and officers;
In consideration of the continuation of the current Management Contract and other contractual and financial arrangements between each Fund and Putnam and its affiliates, Putnam hereby agrees to indemnify and hold harmless each of the Funds against any and all loss, damage, liability and expense, including reasonable fees and expenses of counsel, arising out of the matters alleged in the Administrative Proceedings, the Private Litigation or any proceedings or actions that may be threatened or commenced in the future by any person (including any regulatory authority) arising out of matters reasonably related to the foregoing matters, including without limitation:
(i) all legal and other expenses incurred by the Funds in connection with investigations undertaken by the independent Trustees;
(ii) all legal and other expenses incurred by the Funds in connection with any such proceedings or actions, including without limitation expenses related to the defense of any such proceedings or actions, compliance with disclosure requirements related to the foregoing and any special communications to Fund shareholders;
(iii) all liabilities and expenses incurred by the Funds in connection with any judgment resulting from, or settlement of, any such proceedings or actions; and
(iv) all liabilities and expenses incurred by the Funds under the provisions of the Agreement and Declaration of Trust of any Fund providing for indemnification of trustees and officers.
The Funds will use their best efforts to notify Putnam of any proceedings or actions commenced against them or against their Trustees or officers, but the failure to provide such notification shall not relieve Putnam of any liability or obligation hereunder. The Funds shall be entitled to defend any such proceedings or action against them using counsel of their choosing. Putnam shall be entitled, at its expense, to participate in the defense of any such proceedings or actions against the Funds and shall be entitled to defend any such proceedings or actions against Putnam, in each case using counsel of their choosing. The Funds will not enter into any settlement of any such proceeding or action without the consent of Putnam which consent shall not be unreasonably withheld.
In the event that the foregoing indemnification shall be unavailable to any Fund, then Putnam hereby agrees to contribute to the amount paid or payable by a Fund as a result of any loss, damage, liability or expense in such proportion as is appropriate to reflect the relative fault of Putnam and such Fund with respect to the matters which resulted in such loss, damage, liability or expense, as well as any other relevant equitable considerations.
To the extent Putnam or MMC makes a payment under this indemnity agreement, Putnam or MMC may seek reimbursement for such payment under any applicable policies of insurance.
The foregoing undertakings by Putnam shall survive the termination of any of the aforesaid Management Contracts.
Please acknowledge your receipt and acceptance of the foregoing by signing the enclosed copy of this letter in the space provided below.
Very truly yours,
Putnam Investment Management LLC
By -----------------------------
The foregoing undertakings are hereby accepted:
The Putnam Funds
By -----------------------------
GUARANTY
For good and valuable consideration, the receipt of which is hereby acknowledged, Marsh & McLennan Companies, Inc. hereby absolutely, unconditionally and irrevocably guarantees the payment by Putnam when due of all sums payable by it under this Agreement.
IN WITNESS WHEREOF, it has caused this Guaranty to be executed by its officers hereunto duly authorized as of the day and year first written above.
Marsh & McLennan Companies, Inc.
By -----------------------------