Putnam
Vista
Fund
Item 1. Report to Stockholders:
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The following is a copy of the report transmitted to stockholders pursuant
to Rule 30e-1 under the Investment Company Act of 1940:
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
7-31-04
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From the Trustees
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John A. Hill and
George Putnam, III
Dear Fellow Shareholder:
Over the past several months, Putnam has introduced a number of reforms
for the benefit of shareholders, including increasing the amount of
disclosure for our funds. We would like to call your attention to new
information now being included in shareholder reports. Following the
performance tables in the Performance Summary, you can find expense and
risk comparisons as well as portfolio turnover information for your
fund. The expense information lets you estimate the amount you have paid
for ongoing expenses such as management fees and distribution (or 12b-1)
fees and lets you compare these expenses with the average expense level
for your fund's peer group, as tracked by Lipper, an independent
fund-rating company. The risk comparison information illustrates your
fund's risk relative to similar funds as tracked by Morningstar, another
independent fund-rating company. The portfolio turnover information
explains how the rate at which a fund buys and sells portfolio
securities might affect its return and its taxable distributions to
shareholders. It also compares your fund's turnover rate with that of
its industry peers, as measured by Lipper. We believe all of this
information can be valuable to you and your financial advisor when you
make decisions about your financial program.
The period covered by this report was generally positive for the stock
market, although mixed signals from the economy caused volatility in
recent months. There were also significant variations in stock
performance, with small companies and value-style stocks leading large
companies and growth-style stocks. We believe the gradual repositioning
strategy that your fund's managers implemented toward the beginning of
the fiscal year is now beginning to make a substantial contribution to
the fund's performance, as it delivered solid returns for the year. In
the following report, the team discusses the fund's performance, their
strategies over the period, and their outlook for fiscal 2005.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
September 15, 2004
Report from Fund Management
Fund highlights
* For the fiscal year ended July 31, 2004, Putnam Vista Fund's class A
shares had a total return of 12.92% at net asset value (NAV) and 6.49%
at public offering price (POP).
* The fund's performance lagged the Russell Midcap Growth Index's return
of 14.79% for the 12-month period. We attribute this underperformance to
certain stock selections that detracted slightly from returns.
* Based on results at NAV, the fund outperformed the average return for
its Lipper category, Mid-Cap Growth Funds, which was 9.63%.
* See the Performance Summary beginning on page 7 for additional fund
performance, comparative performance, and Lipper data.
Performance commentary
Higher oil prices, slowed consumer spending, and moderating job growth
appear to have tempered the stock market's rally in the final months of
Putnam Vista Fund's 2004 fiscal year. However, strong performance by
mid-cap stocks in the first half of the fund's fiscal year helped it to
post positive returns for the 12 months ended July 31, 2004. The fund's
performance at NAV placed it in the top third of its peer group for the
12-month period, surpassing more than two-thirds of the 482 funds
tracked by Lipper. The fund underperformed the Russell Midcap Growth
Index for the same 12 months, largely because of disappointing earnings
announcements by several companies held in the portfolio. Nevertheless,
we believe our efforts to reposition the fund in the first six months of
the fiscal year are now bearing fruit, since the fund declined less than
its benchmark during the stock market's retreat in the second half of
the fund's fiscal year.
FUND PROFILE
Putnam Vista Fund seeks capital appreciation by investing in midsize
companies across a wide range of industry sectors. The fund targets
relatively well-established companies that may have higher growth rates
than larger, mature companies, but offer a greater degree of stability
than smaller, less mature companies. The fund may be appropriate for
investors seeking growth of capital and exposure to growth-oriented
companies.
Market overview
During the first half of the fund's fiscal year, significant improvement
in economic growth, consumer confidence, and rising business spending
helped the equity markets post strong gains. This past spring, the
Federal Reserve Board (the Fed) began signaling that it would have to
raise its benchmark federal funds rate if the economy continued to
improve. Anticipating a summer increase, the financial markets began
pricing in the likelihood that the Fed would raise interest rates at its
June meeting. In our opinion, the markets were anticipating the Fed
tightening too aggressively, since the market consensus was overly
optimistic about the strength of economic growth. Nevertheless, on June
30 the Fed raised the federal funds rate by one-quarter of a percentage
point -- the first time in more than four years. Another one-quarter
percentage point increase took place shortly after the end of the fund's
fiscal year.
We anticipate a moderate slowing in economic growth over the next year,
based on fading fiscal and monetary stimulus, significantly higher oil
prices, and higher interest rates. Key economic indicators, including
retail sales, automobile sales, and payroll growth have been softening.
We believe a slowing economy should temper the Federal Reserve Board's
pace of interest-rate increases, as the central bank would not want to
endanger the fragile expansion. The markets seem to reflect this
thinking, as bond yields began to fall in late June.
U.S. companies have experienced a recovery in profits, leading to
substantial sums of cash flowing into corporate balance sheets. We think
a key determinant of a stock's relative performance will be how well the
company uses its cash to enhance shareholder value -- retiring debt,
investing sensibly in the business or strategic acquisitions, or
returning it to shareholders in the form of dividends. With such
enormous sums of corporate cash looking for productive use, we think the
U.S. economy and capital markets will likely be long-term beneficiaries.
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MARKET SECTOR PERFORMANCE 12 MONTHS ENDED 7/31/04
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Equities
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Russell Midcap Growth Index (midsize-company growth stocks) 14.79%
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S&P 500 Index (broad stock market) 13.17%
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Russell 2000 Index (stocks of small and midsize companies) 17.06%
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MSCI EAFE Index (international stocks) 25.05%
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Bonds
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Lehman Municipal Bond Index (tax-exempt bonds) 5.78%
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Lehman Aggregate Bond Index (broad bond market) 4.84%
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Lehman Global Aggregate Bond Index (international bonds) 7.72%
These indexes provide an overview of performance in different market
sectors for the 12 months ended 7/31/04.
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Strategy overview
During the first half of the fiscal year, we continued our repositioning
of the portfolio, seeking to capture what we consider the best
investment opportunities among the 1,400 companies that make up the
mid-cap universe. Drawing on the expertise of the fund's dedicated team
of mid-cap equity research analysts, we whittled the portfolio down from
some 204 holdings to approximately 125 companies that we believe offer
an attractive balance of growth potential, quality, and valuation. The
fund's buy and sell decisions continue to be guided by a disciplined,
systematic investment process, which takes a bottom-up,
company-by-company approach to structuring the portfolio, rather than a
top-down, sector or investment theme approach.
Given their ability to blend some of the advantages of both small- and
large-cap stocks, we think mid-cap stocks provide a dynamic way for
investors to pursue growth opportunities in the stock market. Midsize
companies offer the superior growth prospects and flexibility of
small-cap companies and the diverse markets and experienced management
of mature, larger-cap companies. We accept some risk when we believe we
have identified high return potential balanced with conviction. Each
company is regularly assessed to ensure that the criteria evaluated in
the initial purchase decision remains viable. If a company's outlook has
changed, or if a stock price has appreciated too rapidly or has fallen
below what we consider a top-quartile ranking, the stock is eliminated
from the portfolio.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY WEIGHTINGS COMPARED]
TOP INDUSTRY WEIGHTINGS COMPARED
as of 1/31/04 as of 7/31/04
Retail 10.4% 11.3%
Software 9.4% 10.6%
Oil and gas 2.8% 9.2%
Electronics 9.7% 8.3%
Medical technology 6.6% 6.4%
Footnote reads:
This chart shows how the fund's top weightings have changed over the
last six months. Weightings are shown as a percentage of net assets.
Holdings will vary over time.
How fund holdings affected performance
Our decision to emphasize the fund's exposure to the energy sector with
a greater-than-benchmark weighting, particularly its overweighted
position in Amerada Hess, proved to be a plus given higher energy
prices. When we bought Amerada Hess last January, investors were
avoiding the stock, because of a questionable acquisition the company
made back in 2000. Recently, new management has reinvigorated the
company with plans to broaden its retail strategy by adding new gas
stations. The stock, which represented one of the largest holdings on
July 31, was one of the best performers for the fiscal year.
C.R. Bard, which is a hospital supplier of surgical specialty items such
as catheters and peripheral angioplasty stents, is a good example of a
high-quality growth stock that has been overlooked by investors and,
therefore, offers strong appreciation potential. The company has
steadily reinvested profits in the research and development of new
products. We think its recent introduction of meshes for hernia repair
bodes well for future earnings growth.
Starbucks, which owns 7,500 stores worldwide, is experiencing dramatic
growth as a result of consumer demand for premium coffee. New specialty
drinks, extended hours, and wireless Internet connections are
contributing to an increasing same-store growth at a rate that is well
ahead of its peers. Mall-based jewelry retailer Claire's Stores, which
offers both growth and valuation potential, did well in the second half
of the reporting period after turning in disappointing performance in
the first half. Same-store sales are very high compared to other retail
stores, especially given the introduction of a new product line that
caters to teens in the 16-17 year range.
TOP HOLDINGS
(Percent of fund's net assets as of 7/31/04)
1 SanDisk Corp. (2.7%)
Electronics
2 Adobe Systems, Inc. (2.4%)
Software
3 EOG Resources, Inc. (2.2%)
Oil and gas
4 Lexmark International, Inc. (2.1%)
Computers
5 Claire's Stores, Inc. (2.1%)
Retail
6 Amerada Hess Corp. (2.1%)
Oil and gas
7 Symantec Corp. (2.1%)
Software
8 BMC Software, Inc. (2.0%)
Software
9 C.R. Bard, Inc. (1.6%)
Medical technology
10 Starbucks Corp. (1.6%)
Restaurants
Footnote reads:
The fund's holdings will change over time.
Software maker Siebel Systems fell short of our expectations during the
reporting period. We thought that the company's high market share would
help it to maintain its competitive advantage, but earnings growth has
not been as robust as we'd hoped. Its stock price remains compelling,
and we'll be watching for improvement in the coming months. We remain
confident about prospects for Veritas Software, but its stock price fell
sharply in early July when it preannounced that second-quarter earnings
would not meet expectations. We remain confident that this high-quality
software storage provider will regain its footing.
Finally, we sold Health Net, a provider of managed health-care services,
after it became clear that it was losing market share to larger
health-care providers with more competitively priced services.
Initially, we thought the company offered strong valuation potential,
but higher labor costs and competition had decidedly altered the
company's prospects in our opinion.
Please note that all holdings discussed in this report are subject to
review in accordance with the fund's investment strategy and may vary in
the future.
OF SPECIAL INTEREST
For the 12 months ended July 31, 2004, Lipper ranked Putnam Vista Fund
in the 27th percentile of Mid-Cap Growth Funds.
Lipper ranked Putnam Vista Fund's class A shares 130/482, 192/251, and
46/95 for the 1-, 5-, and 10-year periods as of July 31, 2004 in the
Mid-Cap Growth category. Lipper ranks funds (without sales charges) with
similar current investment styles or objectives as determined by Lipper.
The fund's management team
The fund is managed by the Putnam Mid-Cap Growth Team. The members of
the team are Kevin Divney (Portfolio Member) and Paul Marrkand
(Portfolio Member).
The outlook for your fund
The following commentary reflects anticipated developments that could
affect your fund over the next six months, as well as your management
team's plans for responding to them.
The recent decline in job growth, rising food and energy prices, and the
upcoming presidential election are creating uncertainty in the minds of
investors, who appear to be pulling back from the equity markets. This
softening demand has contributed to falling stock prices. We think the
uncertainty and the ensuing reaction of investors is understandable, but
it creates investment opportunities, which vigilant investors can seize.
In our opinion, mid-cap stocks remain a very attractive asset class
given their strong growth and quality characteristics and attractive
reward/risk profile. These stocks are less speculative than small-cap
stocks and offer faster growth potential than large-cap stocks. We think
the portfolio's holdings, which offer an attractively balanced
combination of growth, quality, and valuation, are key to its improved
performance results of the past year as well as its potential going
forward.
The views expressed in this report are exclusively those of Putnam
Management. They are not meant as investment advice. The fund invests
some or all of its assets in small to midsize companies. Such
investments increase the risk of greater price fluctuations.
Performance summary
This section shows your fund's performance during its fiscal year, which
ended July 31, 2004. In accordance with regulatory requirements, we also
include performance for the most current calendar quarter-end.
Performance should always be considered in light of a fund's investment
strategy. Data represents past performance. Past performance does not
guarantee future results. More recent returns may be less or more than
those shown. Investment return and principal value will fluctuate and
you may have a gain or a loss when you sell your shares. For the most
recent month-end performance, please visit www.putnaminvestments.com.
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TOTAL RETURN FOR PERIODS ENDED 7/31/04
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Class A Class B Class C Class M Class R
(inception dates) (6/3/68) (3/1/93) (7/26/99) (12/8/94) (1/21/03)
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NAV POP NAV CDSC NAV CDSC NAV POP NAV
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1 year 12.92% 6.49% 12.03% 7.02% 12.05% 11.05% 12.26% 8.37% 12.64%
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5 years -16.99 -21.75 -20.08 -21.12 -20.02 -20.02 -19.08 -21.89 -17.91
Annual average -3.66 -4.79 -4.38 -4.63 -4.37 -4.37 -4.15 -4.82 -3.87
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10 years 132.86 119.55 116.09 116.09 116.12 116.12 121.65 113.82 127.40
Annual average 8.82 8.18 8.01 8.01 8.01 8.01 8.28 7.90 8.56
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Annual average
(life of fund) 9.51 9.33 8.52 8.52 8.68 8.68 8.79 8.68 9.24
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Performance assumes reinvestment of distributions and does not account
for taxes. Returns at public offering price (POP) for class A and M
shares reflect a sales charge of 5.75% and 3.50%, respectively (which
for class A shares does not reflect a reduction in sales charges that
went into effect on January 28, 2004; if this reduction had been in
place for all periods indicated, returns would have been higher). Class
B share returns reflect the applicable contingent deferred sales charge
(CDSC), which is 5% in the first year, declining to 1% in the sixth
year, and is eliminated thereafter. Class C shares reflect a 1% CDSC the
first year that is eliminated thereafter. Class R share returns have no
initial sales charge or CDSC. Performance for class B, C, M, and R
shares before their inception is derived from the historical performance
of class A shares, adjusted for the applicable sales charge (or CDSC)
and higher operating expenses for such shares.
A 2% short-term trading fee will be applied to shares exchanged or sold
within 5 days of purchase.
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COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 7/31/04
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Lipper Mid-Cap
Russell Midcap Growth Funds
Growth Index* category average+
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1 year 14.79% 9.63%
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5 years -1.17 3.12
Annual average -0.23 -0.01
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10 years 155.24 139.39
Annual average 9.82 8.64
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Annual average
(life of fund) -- 8.58
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Index and Lipper results should be compared to fund performance at net
asset value.
* The inception date of the Russell Midcap Growth Index was December 31,
1985.
+ Over the 1-, 5-, and 10-year periods ended 7/31/04, there were 482,
251, and 95 funds, respectively, in this Lipper category.
[GRAPHIC OMITTED: worm chart CHANGE IN THE VALUE OF A $10,000 INVESTMENT]
CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment, 7/31/94 to 7/31/04
Fund's class A Russell Midcap
Date shares at POP Growth Index
7/31/94 9,425 10,000
7/31/95 12,371 13,076
7/31/96 14,429 14,023
7/31/97 19,660 19,590
7/31/98 22,982 21,222
7/31/99 26,447 25,826
7/31/00 40,514 37,128
7/31/01 25,177 25,317
7/31/02 17,203 18,055
7/31/03 19,442 22,235
7/31/04 $21,955 $25,524
Footnote reads:
Past performance does not indicate future results. At the end of the
same time period, a $10,000 investment in the fund's class B and class C
shares would have been valued at $21,609 and $21,612, respectively, and
no contingent deferred sales charges would apply. A $10,000 investment
in the fund's class M shares would have been valued at $22,165 ($21,382
at public offering price). A $10,000 investment in the fund's class R
shares would have been valued at $22,740. See first page of performance
section for performance calculation method.
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PRICE AND DISTRIBUTION* INFORMATION 12 MONTHS ENDED 7/31/04
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Class A Class B Class C Class M Class R
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Share value: NAV POP NAV NAV NAV POP NAV
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7/31/03 $7.12 $7.55 $6.32 $6.89 $6.69 $6.93 $7.12
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7/31/04 8.04 8.49+ 7.08 7.72 7.51 7.78 8.02
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* The fund made no distributions during the period.
+ Reflects a reduction in sales charges that took effect on January 28, 2004.
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TOTAL RETURN FOR PERIODS ENDED 6/30/04 (MOST RECENT CALENDAR QUARTER)
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Class A Class B Class C Class M Class R
(inception dates) (6/3/68) (3/1/93) (7/26/99) (12/8/94) (1/21/03)
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NAV POP NAV CDSC NAV CDSC NAV POP NAV
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1 year 24.49% 17.35% 23.33% 18.33% 23.50% 22.50% 23.73% 19.32% 24.20%
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5 years -13.72 -18.70 -16.99 -18.08 -16.91 -16.91 -15.84 -18.79 -14.66
Annual average -2.91 -4.06 -3.66 -3.91 -3.64 -3.64 -3.39 -4.08 -3.12
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10 years 156.76 141.97 138.19 138.19 138.04 138.04 144.22 135.67 150.53
Annual average 9.89 9.24 9.07 9.07 9.06 9.06 9.34 8.95 9.62
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Annual average
(life of fund) 9.73 9.55 8.74 8.74 8.91 8.91 9.01 8.91 9.46
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Understanding your
fund's expenses
As a mutual fund investor, you pay ongoing expenses, such as management
fees, distribution fees (12b-1 fees), and other expenses. Using the
information below, you can estimate how these expenses affect your
investment and compare them with the expenses of other funds. You may
also pay one-time transaction expenses, including sales charges (loads)
and redemption fees, which are not shown in this section and would have
resulted in higher total expenses. For more information, see your fund's
prospectus or talk to your financial advisor.
Review your fund's expenses
The table below shows the expenses you would have paid on a $1,000
investment in Putnam Vista Fund from February 1, 2004, to July 31, 2004.
It also shows how much a $1,000 investment would be worth at the close
of the period, assuming actual returns and expenses.
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EXPENSES AND VALUE OF A $1,000 INVESTMENT
assuming actual returns for the 6 months ended 7/31/04
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Class A Class B Class C Class M Class R
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Expenses paid per
$1,000* $5.35 $9.02 $9.02 $7.79 $6.57
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Ending value (after
expenses) $974.50 $971.20 $971.10 $971.50 $973.30
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* Expenses for each share class are calculated using the fund's
annualized expense ratio for each class, which represents the ongoing
expenses as a percentage of net assets for the six months ended 7/31/04.
The expense ratio may differ for each share class (see the table at the
bottom of the next page). Expenses are calculated by multiplying the
expense ratio by the average account value for the period; then
multiplying the result by the number of days in the period; and then
dividing that result by the number of days in the year.
Estimate the expenses you paid
To estimate the ongoing expenses you paid for the six months ended July
31, 2004, use the calculation method below. To find the value of your
investment on February 1, 2004, go to www.putnaminvestments.com and log
on to your account. Click on the "Transaction History" tab in your Daily
Statement and enter 02/01/2004 in both the "from" and "to" fields.
Alternatively, call Putnam at 1-800-225-1581.
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HOW TO CALCULATE THE EXPENSES YOU PAID
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Total
Value of your Expenses paid expenses
investment on 2/1/04 [DIV] $1,000 X per $1,000 = paid
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Example Based on a $10,000 investment in class A shares of your fund.
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$10,00 [DIV] $1,000 X $5.35 (see table above) = $53.50
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Comparing your fund's expenses with those of other funds
Using the SEC's method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines
to help investors assess fund expenses. Per these guidelines, the table
below shows your fund's expenses based on a $1,000 investment, assuming
a hypothetical 5% annualized return. You can use this information to
compare the ongoing expenses (but not transaction expenses or total
costs) of investing in the fund with those of other funds. All mutual
fund shareholder reports will provide this information to help you make
this comparison. Please note that you cannot use this information to
estimate your actual ending account balance and expenses paid during the
period.
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EXPENSES AND VALUE OF A $1,000 INVESTMENT
assuming a hypothetical 5% annualized return for the 6 months ended 7/31/04
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Class A Class B Class C Class M Class R
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Expenses paid per
$1,000* $5.47 $9.22 $9.22 $7.97 $6.72
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Ending value (after
expenses) $1,019.44 $1,015.71 $1,015.71 $1,016.96 $1,018.20
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* Expenses for each share class are calculated using the fund's
annualized expense ratio for each class, which represents the ongoing
expenses as a percentage of net assets for the six months ended 7/31/04.
The expense ratio may differ for each share class (see the table at the
bottom of this page). Expenses are calculated by multiplying the expense
ratio by the average account value for the period; then multiplying the
result by the number of days in the period; and then dividing that
result by the number of days in the year.
Using industry averages to compare expenses
You can also compare your fund's expenses with industry averages, as
determined by Lipper, an independent fund-rating agency that ranks funds
relative to others that Lipper considers to have similar investment
styles or objectives. The expense ratio for each share class shown below
indicates how much of your fund's net assets have been used to pay
ongoing expenses during the period.
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EXPENSE RATIO COMPARISONS USING ANNUALIZED DATA
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Class A Class B Class C Class M Class R
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Your fund's annualized
expense ratio+ 1.09% 1.84% 1.84% 1.59% 1.34%
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Average annualized expense
ratio for Lipper peer
group++ 1.57% 2.32% 2.32% 2.07% 1.82%
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+ For the fund's most recent fiscal half year; may differ from expense ratios
based on one-year data in the financial highlights.
++ For class A shares, expenses shown represent the average of the expenses
of front-end load funds viewed by Lipper as having the same investment
classification or objective as the fund, calculated in accordance with
Lipper's standard reporting methodology for comparing expenses within a
given universe. All Lipper data is for the most recent fiscal periods
available as of 6/30/04. For class B, C, M and R shares, Putnam has
adjusted the Lipper total expense average to reflect higher 12b-1 fees
incurred by these classes of shares. The peer group may include funds
that are significantly larger or smaller than the fund, which may limit
the comparability of the fund's expenses to the Lipper average.
Understanding your fund's
portfolio turnover
Putnam funds are actively managed by teams of experts who buy and sell
securities based on intensive analysis of companies, industries,
economies, and markets. Portfolio turnover is a measure of how often a
fund's managers buy and sell securities for your fund. A portfolio
turnover of 100%, for example, means that the managers sold and replaced
securities valued at 100% of a fund's assets within a one-year period.
Funds with high turnover may be more likely to generate capital gains
and dividends that must be distributed to shareholders as taxable
income. High turnover may also cause a fund to pay more brokerage
commissions and other transaction costs, which may detract from
performance. You can use the table below to compare your fund's turnover
with the average turnover for funds in its Lipper category.
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TURNOVER COMPARISONS
percentage of holdings that change every year
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2004 2003 2002 2001 2000
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Putnam Vista Fund 78% 65% 89% 109% 115%
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Lipper Mid-Cap Growth
Funds category
average 150% 165% 180% 171% 151%
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Turnover data for the fund is calculated based on the fund's fiscal-year
period, which ends on July 31. Turnover data for the fund's Lipper
category is calculated based on the average of the turnover of each fund
in the category for its fiscal year ended during the indicated calendar
year, with the exception of 2004 data. Lipper data for 2004 represents
the average turnover for each fund in the category for its most recent
fiscal year and for which data is available as of 6/30/04.
Risk comparison
As part of new initiatives to enhance disclosure, we are including a
risk comparison to help you understand how your fund compares with other
funds. The comparison utilizes a risk measure developed by Morningstar,
an independent fund-rating agency. This risk measure is referred to as
the fund's Overall Morningstar Risk.
[GRAPHIC OMITTED: chart MORNINGSTAR [REGISTRATION MARK] RISK]
MORNINGSTAR [REGISTRATION MARK] RISK
Fund's Overall
Morningstar Risk 7.06
U.S. stock
fund average 3.75
0% INCREASING RISK 100%
Your fund's Overall Morningstar Risk is shown alongside that of the
average fund in its broad asset class, as determined by Morningstar. The
risk bar broadens the comparison by translating the fund's Overall
Morningstar Risk into a percentile, which is based on the fund's ranking
among all funds rated by Morningstar as of 6/30/04. A higher Overall
Morningstar Risk generally indicates that a fund's monthly returns have
varied more widely.
Morningstar determines a fund's Overall Morningstar Risk by assessing
variations in the fund's monthly returns -- with an emphasis on downside
variations -- over 3-, 5-, and 10-year periods, if available. Those
measures are weighted and averaged to produce the fund's Overall
Morningstar Risk. The information shown is provided for the fund's class
A shares only; information for other classes may vary. Overall
Morningstar Risk is based on historical data and does not indicate
future results. Morningstar does not purport to measure the risk
associated with a current investment in a fund, either on an absolute
basis or on a relative basis. Low Overall Morningstar Risk does not mean
that you cannot lose money on an investment in a fund. Copyright 2004
Morningstar, Inc. All Rights Reserved. The information contained herein
(1) is proprietary to Morningstar and/or its content providers; (2) may
not be copied or distributed; and (3) is not warranted to be accurate,
complete, or timely. Neither Morningstar nor its content providers are
responsible for any damages or losses arising from any use of this
information.
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested
all distributions in the fund.
Net asset value (NAV) is the price, or value, of one share of a mutual
fund, without a sales charge. NAVs fluctuate with market conditions. NAV
is calculated by dividing the net assets of each class of shares by the
number of outstanding shares in the class.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the 5.75% maximum sales charge for class A
shares (since reduced to 5.25%) and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time
of the redemption of class B or C shares and assumes redemption at the
end of the period. Your fund's class B CDSC declines from a 5% maximum
during the first year to 1% during the sixth year. After the sixth year,
the CDSC no longer applies. The CDSC for class C shares is 1% for one
year after purchase.
Class A shares are generally subject to an initial sales charge and no
sales charge on redemption (except on certain redemptions of shares
bought without an initial sales charge).
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are
subject to a contingent deferred sales charge only if the shares are
redeemed during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption (except on certain
redemptions of shares bought without an initial sales charge).
Class R shares are not subject to an initial sales charge or CDSC and
are available only to certain defined contribution plans.
Comparative indexes
Lehman Aggregate Bond Index is an unmanaged index used as a general
measure of U.S. fixed-income securities.
Lehman Global Aggregate Bond Index is an unmanaged index used as a broad
measure of international investment-grade bonds.
Lehman Municipal Bond Index is an unmanaged index of long-term
fixed-rate investment-grade tax-exempt bonds.
Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged
index of international stocks from Europe, Australasia, and the Far
East.
Russell 2000 Index is an unmanaged index of common stocks that generally
measure performance of small to midsize companies within the Russell
3000 Index.
Russell Midcap Growth Index is an unmanaged index of all medium and
medium/small companies in the Russell 1000 Index chosen for their growth
orientation.
S&P 500 Index is an unmanaged index of common stock performance.
Indexes assume reinvestment of all distributions and do not account for
fees. Securities and performance of a fund and an index will differ. You
cannot invest directly in an index.
Lipper is a third-party industry ranking entity that ranks funds
(without sales charges) with similar current investment styles or
objectives as determined by Lipper. Lipper category averages reflect
performance trends for funds within a category and are based on results
at net asset value.
Putnam's policy on confidentiality
In order to conduct business with our shareholders, we must obtain
certain personal information such as account holders' addresses,
telephone numbers, Social Security numbers, and the names of their
financial advisors. We use this information to assign an account number
and to help us maintain accurate records of transactions and account
balances.
It is our policy to protect the confidentiality of your information,
whether or not you currently own shares of our funds, and in particular,
not to sell information about you or your accounts to outside marketing
firms. We have safeguards in place designed to prevent unauthorized
access to our computer systems and procedures to protect personal
information from unauthorized use.
Under certain circumstances, we share this information with outside
vendors who provide services to us, such as mailing and proxy
solicitation. In those cases, the service providers enter into
confidentiality agreements with us, and we provide only the information
necessary to process transactions and perform other services related to
your account. We may also share this information with our Putnam
affiliates to service your account or provide you with information about
other Putnam products or services. It is also our policy to share
account information with your financial advisor, if you've listed one on
your Putnam account.
If you would like clarification about our confidentiality policies or
have any questions or concerns, please don't hesitate to contact us at
1-800-225-1581, Monday through Friday, 8:30 a.m. to 7:00 p.m., or
Saturdays from 9:00 a.m. to 5:00 p.m. Eastern Time.
Proxy voting
Putnam is committed to managing our mutual funds in the best interests
of our shareholders. The Putnam funds' proxy voting guidelines and
procedures, as well as information regarding how your fund voted proxies
relating to portfolio securities during the 12-month period ended June
30, 2004, are available on the Putnam Individual Investor Web site,
www.putnaminvestments.com/individual, and on the SEC's Web site,
www.sec.gov. If you have questions about finding forms on the SEC's Web
site, you may call the SEC at 1-800-SEC-0330. You may also obtain the
Putnam funds' proxy voting guidelines and procedures by calling Putnam's
Shareholder Services at 1-800-225-1581.
Fund portfolio holdings
For periods ending on or after July 9, 2004, the fund will file a
complete schedule of its portfolio holdings with the SEC for the first
and third quarters of each fiscal year on Form N-Q. Shareholders may
obtain the fund's Forms N-Q on the SEC's Web site at www.sec.gov. In
addition, the fund's Forms N-Q may be reviewed and copied at the SEC's
public reference room in Washington, D.C. You may call the SEC at
1-800-SEC-0330 for information about the SEC's Web site or the operation
of the public reference room.
A guide to the financial statements
These sections of the report, as well as the accompanying Notes,
preceded by the Report of Independent Registered Public Accounting Firm,
constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values
as of the last day of the reporting period. Holdings are organized by
asset type and industry sector, country, or state to show areas of
concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and 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 year.
Statement of changes in net assets shows how the fund's net assets were
affected by the fund's net investment gain or loss, by distributions to
shareholders, and by changes in the number of the fund's shares. It
lists distributions and their sources (net investment income or realized
capital gains) over the current reporting period and the most recent
fiscal year-end. The distributions listed here may not match the sources
listed in the Statement of operations because the distributions are
determined on a tax basis and may be paid in a different period from the
one in which they were earned.
Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment
income ratios, and portfolio turnover in one summary table, reflecting
the five most recent reporting periods. In a semiannual report, the
highlight table also includes the current reporting period. For open-end
funds, a separate table is provided for each share class.
Report of Independent Registered Public Accounting Firm
The Board of Trustees and Shareholders
Putnam Vista Fund
We have audited the accompanying statement of assets and liabilities of
Putnam Vista Fund, including the fund's portfolio, as of July 31, 2004,
and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the five
years in the period then ended. These financial statements and financial
highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform our audit to obtain reasonable
assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of July 31, 2004 by correspondence
with the custodian and brokers or by other appropriate auditing
procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Putnam Vista Fund as of July 31, 2004, the results
of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended in
conformity with accounting principles generally accepted in the United
States of America.
KPMG LLP
Boston, Massachusetts
September 9, 2004
The fund's portfolio
July 31, 2004
Common stocks (99.8%) (a)
Number of shares Value
Advertising and Marketing Services (0.4%)
- -------------------------------------------------------------------------------
982,000 Interpublic Group of Cos., Inc.
(The) (NON) (S) $12,559,780
Aerospace and Defense (0.9%)
- -------------------------------------------------------------------------------
30,200 Precision Castparts Corp. (S) 1,701,166
697,100 United Defense Industries, Inc.
(NON) 24,154,515
--------------
25,855,681
Automotive (1.3%)
- -------------------------------------------------------------------------------
855,000 Autoliv, Inc. 35,986,950
Banking (0.9%)
- -------------------------------------------------------------------------------
139,200 Commerce Bancorp, Inc. (S) 7,007,328
494,600 Doral Financial Corp. (S) 19,413,050
--------------
26,420,378
Biotechnology (3.7%)
- -------------------------------------------------------------------------------
191,600 Amylin Pharmaceuticals, Inc. (NON)
(S) 3,946,960
696,500 Biogen Idec, Inc. (NON) (S) 41,790,000
56,100 Celgene Corp. (NON) 2,991,813
340,300 Genzyme Corp. (NON) (S) 17,450,584
306,800 IDEXX Laboratories, Inc. (NON) (S) 15,459,652
372,400 Invitrogen Corp. (NON) (S) 19,543,552
90,000 Neurocrine Biosciences, Inc. (NON) (S) 4,191,300
--------------
105,373,861
Broadcasting (0.4%)
- -------------------------------------------------------------------------------
423,300 XM Satellite Radio Holdings, Inc.
Class A (NON) (S) 11,170,887
Building Materials (1.8%)
- -------------------------------------------------------------------------------
767,200 American Standard Cos., Inc. (NON) (S) 29,069,208
433,600 Vulcan Materials Co. (S) 20,648,032
--------------
49,717,240
Commercial and Consumer Services (0.8%)
- -------------------------------------------------------------------------------
170,800 CDW Corp. (S) 10,982,440
185,100 Corporate Executive Board Co. (The) (S) 10,495,170
--------------
21,477,610
Communications Equipment (1.9%)
- -------------------------------------------------------------------------------
1,197,200 Foundry Networks, Inc. (NON) (S) 12,283,272
658,400 Harris Corp. (S) 31,260,832
1,005,200 Tellabs, Inc. (NON) (S) 8,956,332
--------------
52,500,436
Computers (3.6%)
- -------------------------------------------------------------------------------
674,700 Lexmark International, Inc. (NON) 59,710,950
2,146,400 Network Appliance, Inc. (NON) (S) 41,446,984
--------------
101,157,934
Conglomerates (2.4%)
- -------------------------------------------------------------------------------
261,800 AMETEK, Inc. (S) 8,073,912
334,000 Harman International Industries,
Inc. (S) 28,633,820
369,700 ITT Industries, Inc. 29,557,515
--------------
66,265,247
Consumer Finance (2.9%)
- -------------------------------------------------------------------------------
515,400 Capital One Financial Corp. 35,727,528
1,074,400 Nelnet, Inc. (NON) (S) 23,883,912
1,544,200 Providian Financial Corp. (NON) (S) 21,371,728
--------------
80,983,168
Consumer Goods (2.8%)
- -------------------------------------------------------------------------------
592,950 Alberto-Culver Co. Class B (S) 27,643,329
223,500 Energizer Holdings, Inc. (NON) (S) 8,515,350
282,100 Scotts Co. (The) Class A (NON) (S) 17,208,100
878,700 Yankee Candle Co., Inc. (The) (NON) (S) 25,499,874
--------------
78,866,653
Consumer Services (1.1%)
- -------------------------------------------------------------------------------
234,000 Alliance Data Systems Corp. (NON) (S) 9,292,140
414,300 Getty Images, Inc. (Canada) (NON) (S) 22,629,066
--------------
31,921,206
Containers (0.6%)
- -------------------------------------------------------------------------------
218,600 Ball Corp. (S) 15,778,548
Distribution (0.7%)
- -------------------------------------------------------------------------------
154,200 Hughes Supply, Inc. (S) 9,393,864
230,700 SCP Pool Corp. (S) 9,511,761
--------------
18,905,625
Electronics (8.3%)
- -------------------------------------------------------------------------------
9,254,800 Agere Systems, Inc. Class A (NON) 11,475,952
444,900 Altera Corp. (NON) (S) 9,262,818
327,600 ATI Technologies, Inc. (Canada)
(NON) 5,274,360
246,500 Benchmark Electronics, Inc. (NON) 7,044,970
809,900 Integrated Device Technology, Inc.
(NON) (S) 9,257,157
631,700 International Rectifier Corp. (NON) (S) 24,762,640
926,000 Linear Technology Corp. (S) 36,206,600
121,600 Marvell Technology Group, Ltd.
(Bermuda) (NON) 2,823,552
446,900 Omnivision Technologies, Inc. (NON) (S) 5,264,482
3,092,900 SanDisk Corp. (NON) (S) 75,219,328
303,000 Silicon Laboratories, Inc. (NON) (S) 10,692,870
1,433,500 Storage Technology Corp. (NON) 35,765,825
--------------
233,050,554
Energy (0.4%)
- -------------------------------------------------------------------------------
234,300 BJ Services Co. 11,635,338
Financial (0.2%)
- -------------------------------------------------------------------------------
86,400 Moody's Corp. 5,883,840
Health Care Services (2.6%)
- -------------------------------------------------------------------------------
201,600 Anthem, Inc. (NON) (S) 16,625,952
442,500 Laboratory Corp. of America Holdings
(NON) (S) 17,328,300
535,200 PacifiCare Health Systems, Inc.
(NON) (S) 16,361,064
226,100 WellPoint Health Networks, Inc.
(NON) 22,858,710
--------------
73,174,026
Homebuilding (1.0%)
- -------------------------------------------------------------------------------
61,600 NVR, Inc. (NON) (S) 28,705,600
Household Furniture and Appliances (0.9%)
- -------------------------------------------------------------------------------
408,200 Whirlpool Corp. (S) 25,488,008
Insurance (1.8%)
- -------------------------------------------------------------------------------
249,600 Everest Re Group, Ltd. (Barbados) 18,340,608
778,800 W.R. Berkley Corp. (S) 31,884,072
--------------
50,224,680
Investment Banking/Brokerage (2.8%)
- -------------------------------------------------------------------------------
1,096,800 Ameritrade Holding Corp. Class A
(NON) 12,163,512
431,500 Bear Stearns Co., Inc. (The) (S) 35,995,730
375,084 Legg Mason, Inc. (S) 29,459,097
--------------
77,618,339
Leisure (0.5%)
- -------------------------------------------------------------------------------
232,000 Harley-Davidson, Inc. (S) 13,889,840
Machinery (3.8%)
- -------------------------------------------------------------------------------
420,300 Briggs & Stratton Corp. 35,095,050
704,100 Terex Corp. (NON) (S) 27,396,531
677,100 Toro Co. (The) 44,350,050
--------------
106,841,631
Manufacturing (1.4%)
- -------------------------------------------------------------------------------
281,800 Graco, Inc. 8,871,064
940,050 IDEX Corp. (S) 30,166,205
--------------
39,037,269
Medical Technology (6.4%)
- -------------------------------------------------------------------------------
581,400 Biomet, Inc. (S) 25,575,786
814,000 C.R. Bard, Inc. (S) 44,932,800
371,100 Charles River Laboratories
International, Inc. (NON) (S) 16,725,477
123,600 Dade Behring Holdings, Inc. (NON) 6,141,684
500,139 Gen-Probe, Inc. (NON) (S) 18,715,201
178,850 Inamed Corp. (NON) 9,690,093
98,540 Kinetic Concepts, Inc. (NON) 4,426,417
279,500 Respironics, Inc. (NON) (S) 15,573,740
286,300 St. Jude Medical, Inc. (NON) 19,505,619
188,000 Varian Medical Systems, Inc. (NON) 12,973,880
209,500 Wright Medical Group, Inc. (NON) (S) 5,788,485
--------------
180,049,182
Office Equipment & Supplies (0.8%)
- -------------------------------------------------------------------------------
586,800 HNI Corp. 23,736,060
Oil & Gas (9.2%)
- -------------------------------------------------------------------------------
704,700 Amerada Hess Corp. (S) 58,736,745
1,080,500 Burlington Resources, Inc. (S) 41,242,685
788,600 Chesapeake Energy Corp. (S) 12,105,010
955,100 EOG Resources, Inc. (S) 60,696,605
622,700 Newfield Exploration Co. (NON) (S) 36,782,889
415,000 Pogo Producing Co. (S) 18,417,700
391,200 Sunoco, Inc. (S) 26,668,104
254,300 Vintage Petroleum, Inc. 4,348,530
--------------
258,998,268
Pharmaceuticals (4.8%)
- -------------------------------------------------------------------------------
87,400 Allergan, Inc. 6,610,936
1,063,600 Andrx Group (NON) (S) 27,589,784
425,300 Barr Pharmaceuticals, Inc. (NON) 14,609,055
950,100 Endo Pharmaceuticals Holdings, Inc.
(NON) (S) 18,241,920
901,084 Eon Labs, Inc. (NON) 26,239,566
1,390,300 King Pharmaceuticals, Inc. (NON) 15,696,487
764,700 Medicis Pharmaceutical Corp. Class A (S) 27,353,319
--------------
136,341,067
Photography/Imaging (0.2%)
- -------------------------------------------------------------------------------
858,938 Lexar Media, Inc. (NON) (S) 4,629,676
Restaurants (1.6%)
- -------------------------------------------------------------------------------
944,500 Starbucks Corp. (NON) (S) 44,353,720
Retail (11.3%)
- -------------------------------------------------------------------------------
891,500 Abercrombie & Fitch Co. Class A 32,878,520
585,900 Advance Auto Parts, Inc. (NON) 21,748,608
944,650 Aeropostale, Inc. (NON) (S) 28,792,932
228,000 American Eagle Outfitters, Inc. (NON) 7,471,560
273,000 Chico's FAS, Inc. (NON) (S) 11,430,510
2,566,200 Claire's Stores, Inc. 59,150,910
853,200 Coach, Inc. (NON) (S) 36,508,428
608,200 Fossil, Inc. (NON) (S) 14,712,358
603,800 Michaels Stores, Inc. 32,623,314
778,700 RadioShack Corp. (S) 21,764,665
1,476,800 Staples, Inc. 42,649,984
99,400 Whole Foods Market, Inc. (S) 8,182,608
--------------
317,914,397
Schools (1.4%)
- -------------------------------------------------------------------------------
326,500 Apollo Group, Inc. Class A (NON) 27,279,075
383,000 Career Education Corp. (NON) (S) 12,949,230
--------------
40,228,305
Semiconductor (0.4%)
- -------------------------------------------------------------------------------
780,600 Sigmatel, Inc. (NON) (S) 11,919,762
Shipping (1.0%)
- -------------------------------------------------------------------------------
657,100 CNF Transportation, Inc. 27,111,946
Software (10.6%)
- -------------------------------------------------------------------------------
1,573,100 Adobe Systems, Inc. 66,353,368
428,600 Autodesk, Inc. (S) 17,229,720
3,589,000 BMC Software, Inc. (NON) (S) 56,275,520
1,865,300 Citrix Systems, Inc. (NON) (S) 32,866,586
459,500 Mercury Interactive Corp. (NON) (S) 16,799,320
3,293,100 Siebel Systems, Inc. (NON) 26,542,386
1,237,600 Symantec Corp. (NON) (S) 57,870,176
1,296,100 Veritas Software Corp. (NON) 24,703,666
--------------
298,640,742
Technology (0.1%)
- -------------------------------------------------------------------------------
41,700 CACI International, Inc. Class A
(NON) (S) 1,714,287
Technology Services (1.2%)
- -------------------------------------------------------------------------------
403,640 Cognizant Technology Solutions Corp.
(NON) 11,120,282
1,309,800 VeriSign, Inc. (NON) (S) 22,934,598
--------------
34,054,880
Waste Management (0.9%)
- -------------------------------------------------------------------------------
532,800 Stericycle, Inc. (NON) (S) 26,107,200
--------------
Total Common stocks
(cost $2,648,506,647) $2,806,289,821
Short-term investments (20.1%) (a)
Principal amount Value
- -------------------------------------------------------------------------------
$534,543,771 Short-term investments held as
collateral for loaned securities
with yields ranging from 1.28% to
1.52% and due dates ranging from
August 2, 2004 to August 23, 2004 (d) $534,351,761
29,724,290 Putnam Prime Money Market Fund (e) 29,724,290
--------------
Total Short-term investments
(cost $564,076,051) $564,076,051
- -------------------------------------------------------------------------------
Total Investments
(cost $3,212,582,698) $3,370,365,872
- -------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $2,811,969,610.
(NON) Non-income-producing security.
(S) Securities on loan, in part or in entirety, at July 31, 2004.
(d) See Note 1 to the financial statements.
(e) See Note 5 to the financial statements regarding investments in the
Putnam Prime Money Market Fund.
The accompanying notes are an integral part of these financial
statements.
Statement of assets and liabilities
July 31, 2004
Assets
- -------------------------------------------------------------------------------
Investment in securities, at value, including $522,099,531 of securities
on loan (Note 1):
- -------------------------------------------------------------------------------
Unaffiliated issuers (identified cost $3,182,858,408) $3,340,641,582
- -------------------------------------------------------------------------------
Affiliated issuers (identified cost $29,724,290) (Note 5) 29,724,290
- -------------------------------------------------------------------------------
Cash 1,449,621
- -------------------------------------------------------------------------------
Dividends, interest and other receivables 450,396
- -------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,800,454
- -------------------------------------------------------------------------------
Receivable for securities sold 55,399,516
- -------------------------------------------------------------------------------
Receivable for variation margin (Note 1) 59,566
- -------------------------------------------------------------------------------
Total assets 3,429,525,425
Liabilities
- -------------------------------------------------------------------------------
Payable for securities purchased 33,348,614
- -------------------------------------------------------------------------------
Payable for shares of the fund repurchased 42,856,475
- -------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 3,840,836
- -------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 1,340,413
- -------------------------------------------------------------------------------
Payable for Trustee compensation and expenses (Note 2) 326,556
- -------------------------------------------------------------------------------
Payable for administrative services (Note 2) 3,930
- -------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 1,032,309
- -------------------------------------------------------------------------------
Collateral on securities loaned, at value (Note 1) 534,351,761
- -------------------------------------------------------------------------------
Other accrued expenses 454,921
- -------------------------------------------------------------------------------
Total liabilities 617,555,815
- -------------------------------------------------------------------------------
Net assets $2,811,969,610
Represented by
- -------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $6,916,041,587
- -------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (4,261,855,151)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments 157,783,174
- -------------------------------------------------------------------------------
Total -- Representing net assets applicable to capital
shares outstanding $2,811,969,610
Computation of net asset value and offering price
- -------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,798,905,712 divided by 223,828,231 shares) $8.04
- -------------------------------------------------------------------------------
Offering price per class A share (100/94.75 of $8.04)* $8.49
- -------------------------------------------------------------------------------
Net asset value and offering price per class B share
($674,172,493 divided by 95,266,350 shares)** $7.08
- -------------------------------------------------------------------------------
Net asset value and offering price per class C share
($36,770,205 divided by 4,764,638 shares)** $7.72
- -------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($44,374,779 divided by 5,909,296 shares) $7.51
- -------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $7.51)* $7.78
- -------------------------------------------------------------------------------
Net asset value, offering price and redemption price per
class R share ($37,257 divided by 4,646 shares) $8.02
- -------------------------------------------------------------------------------
Net asset value, offering price and redemption price per
class Y share ($257,709,164 divided by 30,943,250 shares) $8.33
- -------------------------------------------------------------------------------
* 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
Year ended July 31, 2004
Investment income:
- -------------------------------------------------------------------------------
Dividends (net of foreign tax of $15,796) $14,320,818
- -------------------------------------------------------------------------------
Interest (including interest income of $50,530 from
- -------------------------------------------------------------------------------
investments in affiliated issuers) (Note 5) 250,101
- -------------------------------------------------------------------------------
Securities lending 457,484
- -------------------------------------------------------------------------------
Total investment income 15,028,403
Expenses:
- -------------------------------------------------------------------------------
Compensation of Manager (Note 2) 17,576,355
- -------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 10,794,485
- -------------------------------------------------------------------------------
Trustee compensation and expenses (Note 2) 91,206
- -------------------------------------------------------------------------------
Administrative services (Note 2) 43,379
- -------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 5,266,955
- -------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 8,090,568
- -------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 441,192
- -------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 399,366
- -------------------------------------------------------------------------------
Distribution fees -- Class R (Note 2) 26
- -------------------------------------------------------------------------------
Other 715,244
- -------------------------------------------------------------------------------
Non-recurring costs (Note 6) 95,552
- -------------------------------------------------------------------------------
Costs assumed by Manager (Note 6) (95,552)
- -------------------------------------------------------------------------------
Fees waived and reimbursed by Manager (Note 5) (8,805)
- -------------------------------------------------------------------------------
Total expenses 43,409,971
- -------------------------------------------------------------------------------
Expense reduction (Note 2) (1,772,735)
- -------------------------------------------------------------------------------
Net expenses 41,637,236
- -------------------------------------------------------------------------------
Net investment loss (26,608,833)
- -------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 703,441,908
- -------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 1,323,994
- -------------------------------------------------------------------------------
Net unrealized depreciation of investments and futures
contracts during the year (186,848,425)
- -------------------------------------------------------------------------------
Net gain on investments 517,917,477
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations $491,308,644
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Statement of changes in net assets
Year ended July 31
Decrease in net assets 2004 2003
- -------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------
Net investment loss $(26,608,833) $(25,283,833)
- -------------------------------------------------------------------------------
Net realized gain (loss) on investments 704,765,902 (720,655,943)
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments (186,848,425) 1,137,530,132
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 491,308,644 391,590,356
- -------------------------------------------------------------------------------
Decrease from capital share transactions
(Note 4) (1,424,570,180) (850,746,890)
- -------------------------------------------------------------------------------
Total decrease in net assets (933,261,536) (459,156,534)
Net assets
- -------------------------------------------------------------------------------
Beginning of year 3,745,231,146 4,204,387,680
- -------------------------------------------------------------------------------
End of year $2,811,969,610 $3,745,231,146
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Per-share Year ended July 31
operating performance 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $7.12 $6.30 $9.22 $19.10 $14.30
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (a) (.05) (d) (.03) (.04) (.06) (.09)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .97 .85 (2.88) (6.00) 7.18
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .92 .82 (2.92) (6.06) 7.09
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (3.81) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (3.82) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.04 $7.12 $6.30 $9.22 $19.10
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.92 13.02 (31.67) (37.86) 53.19
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,798,906 $2,238,709 $2,563,995 $4,614,523 $6,763,532
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.08 (d) 1.09 1.00 .89 .87
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.60) (d) (.54) (.56) (.47) (.51)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 77.95 64.83 89.19 109.13 115.31
- ---------------------------------------------------------------------------------------------------------------------------------
(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) Reflects waivers of certain fund expenses during the period. As a
result of such waivers, the expenses of the fund for the period ended
July 31, 2004 reflect a reduction of less than 0.01% of average net
assets for class A shares (Note 5).
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
Per-share Year ended July 31
operating performance 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $6.32 $5.63 $8.30 $17.73 $13.51
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (a) (.10) (d) (.07) (.09) (.15) (.21)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .86 .76 (2.58) (5.46) 6.72
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .76 .69 (2.67) (5.61) 6.51
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (3.81) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (3.82) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $7.08 $6.32 $5.63 $8.30 $17.73
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.03 12.26 (32.17) (38.31) 51.89
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $674,172 $842,635 $913,467 $1,776,848 $2,880,568
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.83 (d) 1.84 1.75 1.64 1.62
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (1.35) (d) (1.29) (1.31) (1.22) (1.26)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 77.95 64.83 89.19 109.13 115.31
- ---------------------------------------------------------------------------------------------------------------------------------
(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) Reflects waivers of certain fund expenses during the period. As a
result of such waivers, the expenses of the fund for the period ended
July 31, 2004 reflect a reduction of less than 0.01% of average net
assets for class B shares (Note 5).
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Per-share Year ended July 31
operating performance 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $6.89 $6.14 $9.05 $18.95 $14.30
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (a) (.10) (d) (.08) (.10) (.15) (.24)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .93 .83 (2.81) (5.93) 7.18
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .83 .75 (2.91) (6.08) 6.94
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (3.81) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (3.82) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $7.72 $6.89 $6.14 $9.05 $18.95
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.05 12.22 (32.15) (38.33) 52.03
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $36,770 $48,585 $52,939 $115,495 $91,914
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.83 (d) 1.84 1.75 1.64 1.62
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (1.35) (d) (1.29) (1.31) (1.20) (1.24)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 77.95 64.83 89.19 109.13 115.31
- ---------------------------------------------------------------------------------------------------------------------------------
(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) Reflects waivers of certain fund expenses during the period. As a
result of such waivers, the expenses of the fund for the period ended
July 31, 2004 reflect a reduction of less than 0.01% of average net
assets for class C shares (Note 5).
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS M
- ---------------------------------------------------------------------------------------------------------------------------------
Per-share Year ended July 31
operating performance 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $6.69 $5.95 $8.74 $18.40 $13.92
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (a) (.08) (d) (.06) (.08) (.13) (.17)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .90 .80 (2.71) (5.71) 6.94
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .82 .74 (2.79) (5.84) 6.77
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (3.81) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (3.82) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $7.51 $6.69 $5.95 $8.74 $18.40
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.26 12.44 (31.92) (38.15) 52.26
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $44,375 $60,957 $73,816 $142,887 $241,432
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.58 (d) 1.59 1.50 1.39 1.37
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (1.10) (d) (1.04) (1.06) (.97) (1.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 77.95 64.83 89.19 109.13 115.31
- ---------------------------------------------------------------------------------------------------------------------------------
(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) Reflects waivers of certain fund expenses during the period. As a
result of such waivers, the expenses of the fund for the period ended
July 31, 2004 reflect a reduction of less than 0.01% of average net
assets for class M shares (Note 5).
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS R
- ---------------------------------------------------------------------------------------------------------------------
For the period
Year January 21,
ended 2003+
Per-share July 31 to July 31
operating performance 2004 2003
- ---------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $7.12 $6.14
- ---------------------------------------------------------------------------------------------------------------------
Investment operations:
- ---------------------------------------------------------------------------------------------------------------------
Net investment loss (a) (.06) (d) (.03)
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments .96 1.01
- ---------------------------------------------------------------------------------------------------------------------
Total from
investment operations .90 .98
- ---------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.02 $7.12
- ---------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 12.64 15.96*
- ---------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $37 $1
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.33 (d) .71*
- ---------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.88) (d) (.42)*
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 77.95 64.83
- ---------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(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.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Reflects waivers of certain fund expenses during the period. As a
result of such waivers, the expenses of the fund for the period ended
July 31, 2004 reflect a reduction of less than 0.01% of average net
assets for class R shares (Note 5).
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS Y
- ---------------------------------------------------------------------------------------------------------------------------------
Per-share Year ended July 31
operating performance 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $7.36 $6.50 $9.48 $19.48 $14.52
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss (a) (.03) (d) (.02) (.03) (.03) (.05)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1.00 .88 (2.95) (6.15) 7.30
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations .97 .86 (2.98) (6.18) 7.25
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (3.81) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
From return of capital -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- -- -- (3.82) (2.29)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.33 $7.36 $6.50 $9.48 $19.48
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) 13.18 13.23 (31.43) (37.71) 53.51
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $257,709 $554,344 $600,170 $877,950 $1,027,892
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .83 (d) .84 .75 .64 .62
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment
loss to average net assets (%) (.35) (d) (.28) (.32) (.21) (.26)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 77.95 64.83 89.19 109.13 115.31
- ---------------------------------------------------------------------------------------------------------------------------------
(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.
(c) Includes amounts paid through expense offset and brokerage service
arrangements (Note 2).
(d) Reflects waivers of certain fund expenses during the period. As a
result of such waivers, the expenses of the fund for the period ended
July 31, 2004 reflect a reduction of less than 0.01% of average net
assets for class Y shares (Note 5).
The accompanying notes are an integral part of these financial
statements.
Notes to financial statements
July 31, 2004
Note 1
Significant accounting policies
Putnam Vista Fund (the "fund"), a Massachusetts business trust, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The fund seeks
capital appreciation by investing primarily in common stocks selected
for above-average growth potential. The fund may also trade securities
for short-term profits.
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 (May 3, 2004 for defined contribution plans
administered by Putnam) 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. The redemption fee is accounted for as an
addition to paid-in-capital. Total redemption fees received by the fund
for the year ended July 31, 2004 were $16,602.
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) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the
market value of which at the time of purchase is required to be an
amount at least equal to the resale price, including accrued interest.
Collateral for certain tri-party repurchase agreements is held at the
counterparty's custodian in a segregated account for the benefit of the
fund and the counterparty. Putnam Management is responsible for
determining that the value of these underlying securities is at all
times at least equal to the resale price, including accrued interest.
D) 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, net
of applicable withholding taxes, 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.
E) 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.
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. Risks may exceed amounts recognized on the statement
of assets and liabilities. 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 July 31, 2004, the value of
securities loaned amounted to $522,099,531. The fund received cash
collateral of $534,351,761, which is pooled with collateral of other
Putnam funds into 29 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 (the "Code"), 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, 2004, the fund had a capital loss carryover of
$4,259,952,470 available to the extent allowed by the Code to offset
future net capital gain, if any. The amount of the carryover and the
expiration dates are:
Loss Carryover Expiration
- -------------------------------
$2,809,978,708 July 31, 2010
1,449,973,762 July 31, 2011
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. These differences include temporary and permanent
differences of losses on wash sale transactions, realized gains and
losses on certain futures contracts and net operating loss.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations. For the year ended July 31,
2004, the fund reclassified $26,608,833 to decrease accumulated net
investment loss and $26,608,833 to decrease paid-in-capital.
The tax basis components of distributable earnings and the federal tax
cost as of period end were as follows:
Unrealized appreciation $368,462,756
Unrealized depreciation (212,582,261)
------------
Net unrealized appreciation 155,880,495
Capital loss carryforward (4,259,952,470)
Cost for federal income
tax purposes $3,214,485,377
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 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 year ended July 31, 2004, the fund
paid PFTC $8,707,291 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 year ended, July 31, 2004, the
fund's expenses were reduced by $1,772,735 under these arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $3,924, as a quarterly retainer, 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 Trustees have terminated the Pension Plan with
respect to any Trustee first elected after 2003.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B, class C, class M and class R shares pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The purpose of the
Plans is to compensate Putnam Retail Management, a wholly-owned
subsidiary of Putnam, LLC and Putnam Retail Management GP, Inc., for
services provided and expenses incurred in distributing shares of the
fund. The Plans provide for payments by the fund to Putnam Retail
Management at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and
1.00% of the average net assets attributable to class A, class B, class
C, class M and class R shares, respectively. The Trustees have approved
payment by the fund at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and
0.50% of the average net assets attributable to class A, class B, class
C, class M and class R shares, respectively.
For the year ended July 31, 2004, Putnam Retail Management, acting as
underwriter, received net commissions of $155,922 and $5,151 from the
sale of class A and class M shares, respectively, and received
$1,864,875 and $5,286 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 year ended July 31,
2004, Putnam Retail Management, acting as underwriter, received $9,789
and no monies on class A and class M redemptions, respectively.
Note 3
Purchases and sales of securities
During the year ended July 31, 2004, cost of purchases and proceeds from
sales of investment securities other than short-term investments
aggregated $2,711,675,902 and $4,110,986,914, respectively. There were
no purchases or sales of U.S. government securities.
Note 4
Capital shares
At July 31, 2004, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended July 31, 2004
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 52,144,719 $416,231,238
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
52,144,719 416,231,238
Shares repurchased (142,569,699) (1,144,772,918)
- ----------------------------------------------------------------
Net decrease (90,424,980) $(728,541,680)
- ----------------------------------------------------------------
Year ended July 31, 2003
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 75,877,055 $474,088,284
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
75,877,055 474,088,284
Shares repurchased (168,379,521) (1,046,048,714)
- ----------------------------------------------------------------
Net decrease (92,502,466) $(571,960,430)
- ----------------------------------------------------------------
Year ended July 31, 2004
- ----------------------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------------------
Shares sold 10,824,391 $76,300,674
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
10,824,391 76,300,674
Shares repurchased (48,880,377) (347,469,092)
- ----------------------------------------------------------------
Net decrease (38,055,986) $(271,168,418)
- ----------------------------------------------------------------
Year ended July 31, 2003
- ----------------------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------------------
Shares sold 12,333,720 $68,942,791
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
12,333,720 68,942,791
Shares repurchased (41,126,720) (224,436,568)
- ----------------------------------------------------------------
Net decrease (28,793,000) $(155,493,777)
- ----------------------------------------------------------------
Year ended July 31, 2004
- ----------------------------------------------------------------
Class C Shares Amount
- ----------------------------------------------------------------
Shares sold 1,135,519 $8,737,982
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
1,135,519 8,737,982
Shares repurchased (3,420,412) (26,426,629)
- ----------------------------------------------------------------
Net decrease (2,284,893) $(17,688,647)
- ----------------------------------------------------------------
Year ended July 31, 2003
- ----------------------------------------------------------------
Class C Shares Amount
- ----------------------------------------------------------------
Shares sold 1,608,766 $9,758,427
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
1,608,766 9,758,427
Shares repurchased (3,174,446) (18,991,642)
- ----------------------------------------------------------------
Net decrease (1,565,680) $(9,233,215)
- ----------------------------------------------------------------
Year ended July 31, 2004
- ----------------------------------------------------------------
Class M Shares Amount
- ----------------------------------------------------------------
Shares sold 1,363,679 $10,215,828
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
1,363,679 10,215,828
Shares repurchased (4,566,185) (33,951,154)
- ----------------------------------------------------------------
Net decrease (3,202,506) $(23,735,326)
- ----------------------------------------------------------------
Year ended July 31, 2003
- ----------------------------------------------------------------
Class M Shares Amount
- ----------------------------------------------------------------
Shares sold 2,402,812 $14,150,563
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
2,402,812 14,150,563
Shares repurchased (5,699,095) (32,973,607)
- ----------------------------------------------------------------
Net decrease (3,296,283) $(18,823,044)
- ----------------------------------------------------------------
Year ended July 31, 2004
- ----------------------------------------------------------------
Class R Shares Amount
- ----------------------------------------------------------------
Shares sold 4,485 $35,969
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
4,485 35,969
Shares repurchased (2) (15)
- ----------------------------------------------------------------
Net increase 4,483 $35,954
- ----------------------------------------------------------------
For the period January 21, 2003
(commencement of operations)
to July 31, 2003
- ----------------------------------------------------------------
Class R Shares Amount
- ----------------------------------------------------------------
Shares sold 163 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
163 1,000
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 163 $1,000
- ----------------------------------------------------------------
Year ended July 31, 2004
- ----------------------------------------------------------------
Class Y Shares Amount
- ----------------------------------------------------------------
Shares sold 20,502,623 $168,426,276
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
20,502,623 168,426,276
Shares repurchased (64,838,577) (551,898,339)
- ----------------------------------------------------------------
Net decrease (44,335,954) $(383,472,063)
- ----------------------------------------------------------------
Year ended July 31, 2003
- ----------------------------------------------------------------
Class Y Shares Amount
- ----------------------------------------------------------------
Shares sold 35,408,061 $231,850,897
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions -- --
- ----------------------------------------------------------------
35,408,061 231,850,897
Shares repurchased (52,472,281) (327,088,321)
- ----------------------------------------------------------------
Net decrease (17,064,220) $(95,237,424)
- ----------------------------------------------------------------
At July 31, 2004, Putnam, LLC owned 163 class R shares of the fund (3.5%
of class R shares outstanding), valued at $1,307.
Note 5
Investment in Putnam
Prime Money Market Fund
The fund invests in the Putnam Prime Money Market Fund, an open-end
management investment company managed by Putnam Management. Management
fees paid by the fund are reduced by an amount equal to the management
fees paid by Putnam Prime Money Market Fund with respect to assets
invested by the fund in Putnam Prime Money Market Fund. Income
distributions earned by the fund are recorded as income in the statement
of operations and totaled $50,530 for the period ended July 31, 2004.
Note 6
Regulatory matters and litigation
On April 8, 2004, Putnam Management entered into agreements with the
Securities and Exchange Commission and the Massachusetts Securities
Division representing a final settlement of all charges brought against
Putnam Management by those agencies on October 28, 2003 in connection
with excessive short-term trading by Putnam employees and, in the case
of the charges brought by the Massachusetts Securities Division, by
participants in some Putnam-administered 401(k) plans. The settlement
with the SEC requires Putnam Management to pay $5 million in
disgorgement plus a civil monetary penalty of $50 million, and the
settlement with the Massachusetts Securities Division requires Putnam
Management to pay $5 million in restitution and an administrative fine
of $50 million. The settlements also leave intact the process
established under an earlier partial settlement with the SEC under which
Putnam Management agreed to pay the amount of restitution determined by
an independent consultant, which may exceed the disgorgement and
restitution amounts specified above, pursuant to a plan to be developed
by the independent consultant.
Putnam Management, and not the investors in any Putnam fund, will bear
all costs, including restitution, civil penalties and associated legal
fees stemming from both of these proceedings. The SEC's and
Massachusetts Securities Division's allegations and related matters also
serve as the general basis for numerous lawsuits, including purported
class-action lawsuits filed against Putnam Management and certain
related parties, including certain Putnam funds. Putnam Management 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 July 31, 2004, Putnam Management has assumed
$95,552 of 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. The fund may experience increased redemptions as a result
of these matters, which could result in increased transaction costs and
operating expenses.
Federal tax information
(Unaudited)
The Form 1099 you receive in January 2005 will show the tax status of
all distributions paid to your account in calendar 2004.
About the Trustees
Jameson A. Baxter (9/6/43), Trustee since 1994
Ms. Baxter is the President of Baxter Associates, Inc., a private
investment firm that she founded in 1986.
Ms. Baxter serves as a Director of ASHTA Chemicals, Inc., Banta
Corporation (a printing and digital imaging firm), Ryerson Tull, Inc. (a
steel service corporation), Advocate Health Care and BoardSource,
formerly the National Center for Nonprofit Boards. She is Chairman
Emeritus of the Board of Trustees, Mount Holyoke College, having served
as Chairman for five years and as a board member for thirteen years.
Until 2002, Ms. Baxter was a Director of Intermatic Corporation (a
manufacturer of energy control products).
Ms. Baxter has held various positions in investment banking and
corporate finance, including Vice President and Principal of the Regency
Group, and Vice President of and Consultant to First Boston Corporation.
She is a graduate of Mount Holyoke College.
Charles B. Curtis (4/27/40), Trustee since 2001
Mr. Curtis is President and Chief Operating Officer of the Nuclear
Threat Initiative (a private foundation dealing with national security
issues) and serves as Senior Advisor to the United Nations Foundation.
Mr. Curtis is a member of the Council on Foreign Relations and the
Trustee Advisory Council of the Applied Physics Laboratory, Johns
Hopkins University. Until 2003, Mr. Curtis was a member of the Electric
Power Research Institute Advisory Council and the University of Chicago
Board of Governors for Argonne National Laboratory. Prior to 2002, Mr.
Curtis was a Member of the Board of Directors of the Gas Technology
Institute and the Board of Directors of the Environment and Natural
Resources Program Steering Committee, John F. Kennedy School of
Government, Harvard University. Until 2001, Mr. Curtis was a member of
the Department of Defense Policy Board and Director of EG&G Technical
Services, Inc. (a fossil energy research and development support
company).
From August 1997 to December 1999, Mr. Curtis was a Partner at Hogan &
Hartson L.L.P., a Washington, D.C. law firm. Prior to May 1997, Mr.
Curtis was Deputy Secretary of Energy. He served as Chairman of the
Federal Energy Regulatory Commission from 1977 to 1981 and has held
positions on the staff of the U.S. House of Representatives, the U.S.
Treasury Department, and the SEC.
John A. Hill (1/31/42), Trustee since 1985 and Chairman since 2000
Mr. Hill is Vice Chairman of First Reserve Corporation, a private equity
buyout firm that specializes in energy investments in the diversified
worldwide energy industry.
Mr. Hill is a Director of Devon Energy Corporation, TransMontaigne Oil
Company, Continuum Health Partners of New York and various private
companies controlled by First Reserve Corporation, as well as a Trustee
of TH Lee, Putnam Investment Trust (a closed-end investment company
advised by an affiliate of Putnam Management). He is also a Trustee of
Sarah Lawrence College.
Prior to acquiring First Reserve Corporation in 1983, Mr. Hill held
executive positions in investment banking and investment management with
several firms and with the federal government, including Deputy
Associate Director of the Office of Management and Budget and Deputy
Director of the Federal Energy Administration. He is active in various
business associations, including the Economic Club of New York, and
lectures on energy issues in the United States and Europe. Mr. Hill
holds a B.A. degree in Economics from Southern Methodist University and
pursued graduate studies there as a Woodrow Wilson Fellow.
Ronald J. Jackson (12/17/43), Trustee since 1996
Mr. Jackson is a private investor.
Mr. Jackson is President of the Kathleen and Ronald J. Jackson
Foundation (a charitable trust). He is also a member of the Board of
Overseers of WGBH (a public television and radio station) as well as a
member of the Board of Overseers of the Peabody Essex Museum.
Mr. Jackson is the former Chairman, President and Chief Executive
Officer of Fisher-Price, Inc. (a major toy manufacturer), from which he
retired in 1993. He previously served as President and Chief Executive
Officer of Stride-Rite, Inc. (a manufacturer and distributor of
footwear) and of Kenner Parker Toys, Inc. (a major toy and game
manufacturer). Mr. Jackson was President of Talbots, Inc. (a distributor
of women's apparel) and has held financial and marketing positions with
General Mills, Inc. and Parker Brothers (a toy and game company). Mr.
Jackson is a graduate of the University of Michigan Business School.
Paul L. Joskow (6/30/47), Trustee since 1997
Dr. Joskow is the Elizabeth and James Killian Professor of Economics and
Management, and Director of the Center for Energy and Environmental
Policy Research at the Massachusetts Institute of Technology.
Dr. Joskow serves as a Director of National Grid Transco (a UK-based
holding company with interests in electric and gas transmission and
distribution and telecommunications infrastructure) and TransCanada
Corporation (an energy company focused on natural gas transmission and
power services). He also serves on the board of the Whitehead Institute
for Biomedical Research (a non-profit research institution) and has been
President of the Yale University Council since 1993. Prior to February
2002, he was a Director of State Farm Indemnity Company (an automobile
insurance company), and, prior to March 2000, he was a Director of New
England Electric System (a public utility holding company).
Dr. Joskow has published five books and numerous articles on topics in
industrial organization, government regulation of industry, and
competition policy. He is active in industry restructuring,
environmental, energy, competition and privatization policies -- serving
as an advisor to governments and corporations worldwide. Dr. Joskow
holds a Ph.D. and M. Phil from Yale University and B.A. from Cornell
University.
Elizabeth T. Kennan (2/25/38), Trustee since 1992
Dr. Kennan is a Partner of Cambus-Kenneth Farm (thoroughbred horse and
cattle breeding). She is President Emeritus of Mount Holyoke College.
Dr. Kennan served as Chairman and is now Lead Director of Northeast
Utilities and is a Director of Talbots, Inc. She has served as Director
on a number of other boards, including Bell Atlantic, Chastain Real
Estate, Shawmut Bank, Berkshire Life Insurance and Kentucky Home Life
Insurance. She is a Trustee of the National Trust for Historic
Preservation, of Centre College and of Midway College in Midway,
Kentucky. She is also a member of The Trustees of Reservations. Dr.
Kennan has served on the oversight committee of the Folger Shakespeare
Library, as President of Five Colleges Incorporated, as a Trustee of
Notre Dame University and is active in various educational and civic
associations.
As a member of the faculty of Catholic University for twelve years,
until 1978, Dr. Kennan directed the post-doctoral program in Patristic
and Medieval Studies, taught history and published numerous articles.
Dr. Kennan holds a Ph.D. from the University of Washington in Seattle,
an M.S. from St. Hilda's College at Oxford University and an A.B. from
Mount Holyoke College. She holds several honorary doctorates.
John H. Mullin, III (6/15/41), Trustee since 1997
Mr. Mullin is the Chairman and CEO of Ridgeway Farm (a limited liability
company engaged in timber and farming).
Mr. Mullin serves as a Director of The Liberty Corporation (a
broadcasting company), Progress Energy, Inc. (a utility company,
formerly known as Carolina Power & Light) and Sonoco Products, Inc. (a
packaging company). Mr. Mullin is Trustee Emeritus of The National
Humanities Center and Washington & Lee University, where he served as
Chairman of the Investment Committee. Prior to May 2001, he was a
Director of Graphic Packaging International Corp. Prior to February
2004, he was a Director of Alex Brown Realty, Inc.
Mr. Mullin is also a past Director of Adolph Coors Company; ACX
Technologies, Inc.; Crystal Brands, Inc.; Dillon, Read & Co., Inc.;
Fisher-Price, Inc.; and The Ryland Group, Inc. Mr. Mullin is a graduate
of Washington & Lee University and The Wharton Graduate School,
University of Pennsylvania.
Robert E. Patterson (3/15/45), Trustee since 1984
Mr. Patterson is Senior Partner of Cabot Properties, L.P. and Chairman
of Cabot Properties, Inc.
Mr. Patterson serves as Chairman of the Joslin Diabetes Center and as a
Director of Brandywine Trust Company. Prior to June 2003, he was a
Trustee of Sea Education Association. Prior to December 2001, he was
President and Trustee of Cabot Industrial Trust (a publicly traded real
estate investment trust). Prior to February 1998, he was Executive Vice
President and Director of Acquisitions of Cabot Partners Limited
Partnership (a registered investment adviser involved in institutional
real estate investments). And, prior to 1990, he served as Executive
Vice President of Cabot, Cabot & Forbes Realty Advisors, Inc. (the
predecessor company of Cabot Partners) and as a Senior Vice President of
the Beal Companies (a real estate management, investment and development
firm).
Mr. Patterson practiced law and held various positions in state
government and was the founding Executive Director of the Massachusetts
Industrial Finance Agency. Mr. Patterson is a graduate of Harvard
College and Harvard Law School.
W. Thomas Stephens (9/2/42), Trustee since 1997
Mr. Stephens serves on a number of corporate boards.
Effective November 2004, Mr. Stephens is expected to become Chief
Executive Officer of Boise Cascade, L.L.C. (a paper, forest products and
timberland assets company). Mr. Stephens serves as a Director of Xcel
Energy Incorporated (a public utility company) and TransCanada Pipelines
Limited. Until 2004, Mr. Stephens was a Director of Qwest Communications
and Norske Canada, Inc. (a paper manufacturer). Until 2003, Mr. Stephens
was a Director of Mail-Well, Inc. (a diversified printing company). He
served as Chairman of Mail-Well until 2001 and as CEO of
MacMillan-Bloedel, Ltd. (a forest products company) until 1999.
Prior to 1996, Mr. Stephens was Chairman and Chief Executive Officer of
Johns Manville Corporation. He holds B.S. and M.S. degrees from the
University of Arkansas.
George Putnam, III* (8/10/51), Trustee since 1984 and President
since 2000
Mr. Putnam is President of New Generation Research, Inc. (a publisher of
financial advisory and other research services), and of New Generation
Advisers, Inc. (a registered investment advisor to private funds). Mr.
Putnam founded the New Generation companies in 1986.
Mr. Putnam is a Director of The Boston Family Office, LLC (a registered
investment adviser). He is a Trustee of St. Mark's School, Shore Country
Day School, and until 2002 was a Trustee of the Sea Education
Association.
Mr. Putnam previously worked as an attorney with the law firm of Dechert
LLP (formerly known as Dechert Price & Rhoads) in Philadelphia. He is a
graduate of Harvard College, Harvard Business School and Harvard Law
School.
A.J.C. Smith* (4/13/34), Trustee since 1986
Mr. Smith is the Chairman of Putnam Investments and Director of and
Consultant to Marsh & McLennan Companies, Inc.
Mr. Smith is also a Director of Trident Corp. (a limited partnership
with over thirty institutional investors). He is also a Trustee of the
Carnegie Hall Society, the Educational Broadcasting Corporation, and the
National Museums of Scotland. He is Chairman of the Central Park
Conservancy and a Member of the Board of Overseers of the Joan and
Sanford I. Weill Graduate School of Medical Sciences of Cornell
University. Prior to May 2000 and November 1999, Mr. Smith was Chairman
and CEO, respectively, of Marsh & McLennan Companies, Inc.
The address of each Trustee is One Post Office Square, Boston, MA 02109.
As of July 31, 2004, there were 102 Putnam Funds.
Each Trustee serves for an indefinite term, until his or her
resignation, retirement at age 72, death, or removal.
* Trustees who are or may be deemed to be "interested persons" (as
defined in the Investment Company Act of 1940) of the fund, Putnam
Management, Putnam Retail Management, or Marsh & McLennan Companies,
Inc., the parent company of Putnam, LLC and its affiliated companies.
Messrs. Putnam, III, and Smith are deemed "interested persons" by virtue
of their positions as officers of the fund, Putnam Management, Putnam
Retail Management or Marsh & McLennan Companies, Inc. and as
shareholders of Marsh & McLennan Companies, Inc. George Putnam, III is
the President of your fund and each of the other Putnam funds. Mr. Smith
serves as a Director of and Consultant to Marsh & McLennan Companies,
Inc. and as Chairman of Putnam Investments.
Officers
In addition to George Putnam, III, the other officers of the
fund are shown below:
Charles E. Porter (7/26/38)
Executive Vice President, Associate Treasurer and Principal
Executive Officer
Since 1989
Managing Director, Putnam Investments
and Putnam Management
Jonathan S. Horwitz (6/4/55)
Senior Vice President and Treasurer
Since 2004
Managing Director, Putnam Investments
Steven D. Krichmar (6/27/58)
Vice President and Principal Financial Officer
Since 2002
Senior Managing Director, Putnam Investments. Prior to July
2001, Partner, PricewaterhouseCoopers LLP
Michael T. Healy (1/24/58)
Assistant Treasurer and Principal
Accounting Officer
Since 2000
Managing Director, Putnam Investments
Beth S. Mazor (4/6/58)
Vice President
Since 2002
Senior Vice President, Putnam Investments
Daniel T. Gallagher (2/27/62)
Vice President and Legal and Compliance Liaison Officer
Since 2004
Vice President, Putnam Investments. Prior to 2004,
Associate, Ropes & Gray LLP; prior to 2000, Law Clerk,
Massachusetts Supreme Judicial Court
Francis J. McNamara, III (8/19/55)
Vice President and Chief Legal Officer
Since 2004
Senior Managing Director, Putnam
Investments, Putnam Management and
Putnam Retail Management. Prior to 2004, General Counsel,
State Street Research & Management Company
James P. Pappas (2/24/53)
Vice President
Since 2004
Managing Director, Putnam Investments and Putnam Management.
From 2001 to 2002, Chief Operating Officer, Atalanta/Sosnoff
Management Corporation; prior to 2001, President and Chief
Executive Officer, UAM Investment Services, Inc.
Richard S. Robie, III (3/30/60)
Vice President
Since 2004
Senior Managing Director, Putnam
Investments, Putnam Management and
Putnam Retail Management. Prior to 2003, Senior Vice
President, United Asset Management Corporation
Mark C. Trenchard (6/5/62)
Vice President and BSA Compliance Officer
Since 2002
Senior Vice President, Putnam Investments
Judith Cohen (6/7/45)
Clerk and Assistant Treasurer
Since 1993
Clerk and Assistant Treasurer, The Putnam Funds
The address of each Officer is One Post Office Square,
Boston, MA 02109.
The Putnam family of funds
The following is a complete list of Putnam's open-end mutual funds.
Investors should carefully consider the investment objective, risks,
charges, and expenses of a fund before investing. For a prospectus
containing this and other information for any Putnam fund or product,
call your financial advisor at 1-800-225-1581 and ask for a prospectus.
Please read the prospectus carefully before investing.
Growth Funds
Discovery Growth Fund
Growth Opportunities Fund
Health Sciences Trust
International New Opportunities Fund*
New Opportunities Fund
OTC & Emerging Growth Fund
Small Cap Growth Fund
Vista Fund
Voyager Fund
Blend Funds
Capital Appreciation Fund
Capital Opportunities Fund
Europe Equity Fund*
Global Equity Fund*
Global Natural Resources Fund*
International Capital Opportunities Fund*
International Equity Fund*
Investors Fund
Research Fund
Tax Smart Equity Fund
Utilities Growth and Income Fund
Value Funds
Classic Equity Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
International Growth and Income Fund*
Mid Cap Value Fund
New Value Fund
Small Cap Value Fund+
Income Funds
American Government Income Fund
Putnam Floating Rate Income Fund
Diversified Income Trust
Global Income Trust*
High Yield Advantage Fund*+
High Yield Trust*
Income Fund
Intermediate U.S. Government
Income Fund
Money Market Fund++
U.S. Government Income Trust
Tax-free Income Funds
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund++
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds
Arizona, California, Florida, Massachusetts, Michigan,
Minnesota, New Jersey, New York, Ohio and Pennsylvania
Asset Allocation Funds
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* A 1% redemption fee on total assets redeemed or exchanged between 6 and 90
days of purchase may be imposed for all share classes of these funds.
+ Closed to new investors.
++ An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the fund seeks to preserve your investment at $1.00 per share,
it is possible to lose money by investing in the fund.
With the exception of money market funds, a 2% redemption fee will be
applied to shares exchanged or sold within 5 days of purchase.
Check your account balances and the most recent month-end
performance at www.putnaminvestments.com.
Services for shareholders
Investor services
Help your investment grow Set up a program for systematic investing with
as little as $25 a month from a Putnam fund or from your own savings or
checking account. (Regular investing does not guarantee a profit or
protect against loss in a declining market.)
Switch funds easily* You can move money from one Putnam fund to another
within the same class of shares without a service charge.
Access your money easily You can have checks sent regularly or redeem
shares any business day at the then-current net asset value, which may
be more or less than the original cost of the shares. Class B and class
C shares carry a sales charge that is applied to certain withdrawals.
How to buy additional shares You may buy shares through your financial
advisor or directly from Putnam. To open an account by mail, send a
check made payable to the name of the fund along with a completed fund
application. To add to an existing account, complete the investment
slip found at the top of your Confirmation of Activity statement and
return it with a check payable to your fund.
For more information
Visit www.putnaminvestments.com
A secure section of our Web site contains complete information on your
account, including balances and transactions, updated daily. You may
also conduct transactions, such as exchanges, additional investments,
and address changes. Log on today to get your password.
Use our toll-free number 1-800-225-1581 Ask a helpful Putnam
representative or your financial advisor for details about any of these
or other services, or see your prospectus.
* This privilege is subject to change or termination. An exchange of funds
may result in a taxable event. In addition, a 2% redemption fee will be
applied to shares exchanged or sold within 5 days of purchase, and certain
funds have imposed a 1% redemption fee on total assets redeemed or
exchanged between 6 and 90 days of purchase.
Putnam puts your interests first
In January, Putnam announced a number of voluntary initiatives designed
to reduce fund expenses, provide investors with more useful information,
and help safeguard the interests of all Putnam investors. For details,
visit www.putnaminvestments.com.
Cost-cutting initiatives
Reduced sales charges
Effective immediately, the maximum sales charge for class A shares has
been reduced to 5.25% for equity funds (formerly 5.75%) and 4.50% for
most income funds (formerly 4.75%).*
Lower class B purchase limit
To help ensure that investors are in the most cost-effective share
class, the maximum amount that can be invested in class B shares has
been reduced to $100,000. (Larger trades or accumulated amounts will be
directed to class A shares.)
Ongoing expenses will be limited
During calendar 2004, total ongoing expenses, including management fees
for all funds, will be maintained at or below the average of each fund's
industry peers in its Lipper load-fund universe. For more information,
please see the Statement of Additional information.
Additional measures are being taken to reduce expenses for shareholders
in the six global and international funds that had short-term trading
issues.
Improved disclosure
Putnam fund prospectuses and shareholder reports are being revised to
disclose additional information that will help shareholders compare
funds and weigh their costs and risks along with their potential
benefits. Shareholders will find easy-to-understand information about
fund expense ratios, portfolio manager compensation, risk comparisons,
brokerage commissions, and employee and trustee ownership of Putnam
funds. Disclosure of breakpoint discounts is also being enhanced to
alert investors to potential cost savings.
Protecting investors' interests
New short-term trading fee introduced To discourage short-term trading,
which can interfere with a fund's long-term strategy, a 2% short-term
trading fee will be imposed on any Putnam fund shares redeemed or
exchanged within five calendar days of purchase.
* The maximum sales charge for class A shares of Putnam
U.S. Intermediate Government Income Fund remains 3.25%.
Fund information
One of the largest mutual fund families in the United States, Putnam
Investments has a heritage of investment leadership dating back to Judge
Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition
and practice since 1830. Founded over 65 years ago, Putnam Investments
was built around the concept that a balance between risk and reward is
the hallmark of a well-rounded financial program. We presently manage
over 100 mutual funds in growth, value, blend, fixed income, and
international.
Investment Manager
Putnam Investment
Management, LLC
One Post Office Square
Boston, MA 02109
Marketing Services
Putnam Retail Management
One Post Office Square
Boston, MA 02109
Custodian
Putnam Fiduciary Trust Company
Legal Counsel
Ropes & Gray LLP
Independent Registered Public Accounting Firm
KPMG LLP
Trustees
John A. Hill, Chairman
Jameson Adkins Baxter
Charles B. Curtis
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin, III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
Officers
George Putnam, III
President
Charles E. Porter
Executive Vice President,
Associate Treasurer and Principal Executive
Officer
Jonathan S. Horwitz
Senior Vice President and Treasurer
Steven D. Krichmar
Vice President and
Principal Financial Officer
Michael T. Healy
Assistant Treasurer and
Principal Accounting Officer
Beth S. Mazor
Vice President
Daniel T. Gallagher
Vice President and
Legal and Compliance Liaison Officer
James P. Pappas
Vice President
Richard S. Robie, III
Vice President
Mark C. Trenchard
Vice President and BSA Compliance Officer
Francis J. McNamara, III
Vice President and Chief Legal Officer
Judith Cohen
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Vista Fund.
It may also be used as sales literature when preceded or accompanied by
the current prospectus, the most recent copy of Putnam's Quarterly
Performance Summary, and Putnam's Quarterly Ranking Summary. For more
recent performance, please visit www.putnaminvestments.com. Investors
should carefully consider the investment objective, risks, charges, and
expenses of a fund, which are described in its prospectus. For this and
other information or to request a prospectus, call 1-800-225-1581 toll
free. Please read the prospectus carefully before investing. The fund's
Statement of Additional Information contains additional information
about the fund's Trustees and is available without charge upon request
by calling 1-800-225-1581.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
Call 1-800-225-1581 or visit our Web site www.putnaminvestments.com.
AN015-216504 9/04
Not FDIC Insured May Lose Value No Bank Guarantee
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
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Putnam Vista Fund
Supplement to Annual Report dated 7/31/04
The following information has been prepared to provide class Y
shareholders with a performance overview specific to their holdings.
Class Y shares are offered exclusively to clients that meet the
eligibility requirements specified in the fund's prospectus for such
shares. Performance of class Y shares, which do not incur a front-end
load, a distribution fee, or a contingent deferred sales charge, will
differ from the performance of class A, B, C, M, and R shares, which are
discussed more extensively in the annual report.
RESULTS AT A GLANCE
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Total return for periods ended 7/31/04
NAV
1 year 13.18%
5 years -15.98
Annual average -3.42
10 years 138.73
Annual average 9.09
Life of fund (since class A inception, 06/03/68)
Annual average 9.58
Share value: NAV
7/31/03 $7.36
7/31/04 $8.33
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Distributions: No. Income Capital gains Total
-- -- -- --
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Please note that past performance is not indicative of future results.
More recent returns may be more or less than those shown. Returns shown
for class Y shares for periods prior to their inception are derived from
the historical performance of class A shares, and are not adjusted to
reflect the initial sales charge currently applicable to class A shares.
These returns have not been adjusted to reflect differences in operating
expenses which, for class Y shares, typically are lower than the
operating expenses applicable to class A shares. All returns assume
reinvestment of distributions at net asset value. Investment return and
principal value will fluctuate so your shares, when redeemed, may be
worth more or less than their original cost. See full report for
information on comparative benchmarks. If you have questions, please
consult your fund prospectus or call Putnam toll free at 1-800-752-9894.
Please see pages 9 - 10 of the accompanying shareholder report for a
discussion of the information appearing in the tables below:
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EXPENSES AND VALUE OF A $1,000 INVESTMENT
assuming actual returns for the 6 months ended 7/31/04
Class Y
Expenses paid per $1,000* $4.13
Ending value (after expenses) $975.40
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EXPENSES AND VALUE OF A $1,000 INVESTMENT
assuming a hypothetical 5% annualized return for the 6 months ended 7/31/04
Class Y
Expenses paid per $1,000* $4.22
Ending value (after expenses) $1,020.69
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EXPENSE RATIO COMPARISON USING ANNUALIZED DATA
Your fund's annualized expense ratio+ 0.84%
Average annualized expense ratio for Lipper peer group++ 1.32%
++ For class Y shares, Putnam has adjusted the Lipper total expense average
to reflect that class Y shares do not incur 12b-1 fees.
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Item 2. Code of Ethics:
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All officers of the Fund, including its principal executive, financial and
accounting officers, are employees of Putnam Investment Management, LLC,
the Fund's investment manager. As such they are subject to a comprehensive
Code of Ethics adopted and administered by Putnam Investments which is
designed to protect the interests of the firm and its clients. The Fund
has adopted a Code of Ethics which incorporates the Code of Ethics of
Putnam Investments with respect to all of its officers and Trustees who are
employees of Putnam Investment Management, LLC. For this reason, the Fund
has not adopted a separate code of ethics governing its principal
executive, financial and accounting officers.
Item 3. Audit Committee Financial Expert:
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The Funds' Audit and Pricing Committee is comprised solely of Trustees
who are "independent" (as such term has been defined by the Securities
and Exchange Commission ("SEC") in regulations implementing Section 407
of the Sarbanes-Oxley Act (the "Regulations")). The Trustees believe
that each of the members of the Audit and Pricing Committee also possess
a combination of knowledge and experience with respect to financial
accounting matters, as well as other attributes, that qualify them for
service on the Committee. In addition, the Trustees have determined
that all members of the Funds' Audit and Pricing Committee meet the
financial literacy requirements of the New York Stock Exchange's rules
and that Mr. Patterson and Mr. Stephens qualify as "audit committee
financial experts" (as such term has been defined by the Regulations)
based on their review of their pertinent experience and education.
Certain other Trustees, although not on the Audit and Pricing Committee,
would also qualify as "audit committee financial experts." The SEC has
stated that the designation or identification of a person as an audit
committee financial expert pursuant to this Item 3 of Form N-CSR does
not impose on such person any duties, obligations or liability that are
greater than the duties, obligations and liability imposed on such
person as a member of the Audit and Pricing Committee and the Board of
Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services:
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The following table presents fees billed in each of the last two fiscal
years for services rendered to the fund by the fund's independent
auditors:
Audit Audit-Related Tax All Other
Fiscal year ended Fees Fees Fees Fees
- ----------------- ---------- ------------- ------- ---------
July 31, 2004 $39,634* $-- $2,750 $693
July 31, 2003 $27,050 $-- $2,450 $1,731
* Includes fees of $ 8,384 billed by the fund's independent auditor to
the fund for audit procedures necessitated by regulatory and litigation
matters. These fees were reimbursed to the fund by Putnam.
For the fiscal years ended July 31, 2004 and July 31, 2003, the fund's
independent auditors billed aggregate non-audit fees in the amounts of $
3,443 and $ 4,181 , respectively, to the fund, Putnam Management and
any entity controlling, controlled by or under common control with
Putnam Management that provides ongoing services to the fund.
Audit Fees represents fees billed for the fund's last two fiscal years.
Audit-Related Fees represents fees billed in the fund's last two fiscal
years for services traditionally performed by the fund's auditor,
including accounting consultation for proposed transactions or
concerning financial accounting and reporting standards and other audit
or attest services not required by statute or regulation.
Tax Fees represent fees billed in the fund's last two fiscal years for
tax compliance, tax planning and tax advice services. Tax planning and
tax advice services include assistance with tax audits, employee benefit
plans and requests for rulings or technical advice from taxing
authorities.
All Other Fees Fees represent fees billed for services relating to
calculation of investment performance and interfund trading.
Pre-Approval Policies of the Audit and Pricing Committee. The Audit and
Pricing Committee of the Putnam funds has determined that, as a matter
of policy, all work performed for the funds by the funds' independent
auditors will be pre-approved by the Committee and will generally not be
subject to pre-approval procedures.
Under certain circumstances, the Audit and Pricing Committee believes
that it may be appropriate for Putnam Investment Management, LLC
("Putnam Management") and certain of its affiliates to engage the
services of the funds' independent auditors, but only after prior
approval by the Committee. Such requests are required to be submitted
in writing to the Committee and explain, among other things, the nature
of the proposed engagement, the estimated fees, and why this work must
be performed by that particular audit firm. The Committee will review
the proposed engagement at its next meeting.
Since May 6, 2003, all work performed by the independent auditors for
the funds, Putnam Management and any entity controlling, controlled by
or under common control with Putnam Management that provides ongoing
services to the fund was pre-approved by the Committee or a member of
the Committee pursuant to the pre-approval policies discussed above.
Prior to that date, the Committee had a general policy to pre-approve
the independent auditor's engagements for non-audit services with the
funds, Putnam Management and any entity controlling, controlled by or
under common control with Putnam Management that provides ongoing
services to the fund.
The following table presents fees billed by the fund's principal auditor
for services required to be approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X.
Audit-Related Tax All Other Total Non-
Fiscal year ended Fees Fees Fees Audit Fees
- ----------------- ------------- ---- --------- ----------
June 30, 2004 $-- $-- $-- $--
June 30, 2003 $-- $-- $-- $--
Item 5. Audit Committee: Not applicable
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Items 6. Schedule of Investments: Not applicable
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Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End
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Management Investment Companies: Not applicable
--------------------------------
Item 8. Purchases of Equity Securities by Closed-End Management Investment
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Companies and Affiliated Purchasers: Not applicable
------------------------------------
Item 9. Submission of Matters to a Vote of Security Holders:
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Not applicable
Item 10. Controls and Procedures:
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(a) The registrant's principal executive officer and principal
financial officer have concluded, based on their evaluation of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures as of a date within 90 days of
the filing date of this report, that the design and operation of
such procedures are generally effective to provide reasonable
assurance that information required to be disclosed by the
registrant in this report is recorded, processed, summarized
and reported within the time periods specified in the
Commission's rules and forms.
(b) Changes in internal control over financial reporting:
Not applicable
Item 11. Exhibits:
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(a) The Code of Ethics of The Putnam Funds, which incorporates the
Code of Ethics of Putnam Investments, is filed herewith.
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Investment Company Act of 1940, as amended, and the officer
certifications as required by Section 906 of the Sarbanes-Oxley Act
of 2002 are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NAME OF REGISTRANT
By (Signature and Title): /s/Michael T. Healy
--------------------------
Michael T. Healy
Principal Accounting Officer
Date: September 27, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By (Signature and Title): /s/Charles E. Porter
---------------------------
Charles E. Porter
Principal Executive Officer
Date: September 27, 2004
By (Signature and Title): /s/Steven D. Krichmar
---------------------------
Steven D. Krichmar
Principal Financial Officer
Date: September 27, 2004