N-Q 1 a_putnamfundgwthinc.htm THE PUTNAM FUND FOR GROWTH AND INCOME a_putnamfundgwthinc.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY



Investment Company Act file number: (811-00781)
Exact name of registrant as specified in charter: The Putnam Fund for Growth and Income
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109
Name and address of agent for service: Robert T. Burns, Vice President
One Post Office Square
Boston, Massachusetts 02109
Copy to:         John W. Gerstmayr, Esq.
Ropes & Gray LLP
800 Boylston Street
Boston, Massachusetts 02199-3600
Registrant’s telephone number, including area code: (617) 292-1000
Date of fiscal year end: October 31, 2014
Date of reporting period: January 31, 2014



Item 1. Schedule of Investments:













The Putnam Fund for Growth and Income

The fund's portfolio
1/31/14 (Unaudited)
COMMON STOCKS (98.4%)(a)
Shares Value
Aerospace and defense (6.0%)
Airbus Group NV (France) 590,366 $41,889,468
Embraer SA ADR (Brazil)(S) 403,000 12,368,070
General Dynamics Corp.(S) 431,900 43,755,789
Honeywell International, Inc. 724,500 66,096,135
L-3 Communications Holdings, Inc. 333,800 37,075,166
Northrop Grumman Corp. 388,700 44,914,285
Raytheon Co. 330,800 31,449,156
United Technologies Corp. 362,800 41,366,456
318,914,525
Airlines (1.1%)
Delta Air Lines, Inc. 1,347,800 41,256,158
Japan Airlines Co., Ltd. (Japan)(UR) 291,000 14,696,682
55,952,840
Auto components (0.5%)
Johnson Controls, Inc. 266,600 12,295,592
TRW Automotive Holdings Corp.(NON) 183,800 13,628,770
25,924,362
Automobiles (0.9%)
Ford Motor Co. 902,200 13,496,912
General Motors Co.(NON) 919,400 33,171,952
46,668,864
Beverages (1.6%)
Beam, Inc. 204,600 17,043,180
Coca-Cola Enterprises, Inc. 554,300 23,995,647
Dr. Pepper Snapple Group, Inc.(S) 519,500 24,873,660
PepsiCo, Inc. 197,100 15,838,956
81,751,443
Building products (0.2%)
Allegion PLC (Ireland)(NON) 244,700 12,075,945
12,075,945
Capital markets (4.5%)
Blackstone Group LP (The) 461,200 15,104,300
Carlyle Group LP (The) (Partnership shares) 767,800 26,727,118
Charles Schwab Corp. (The) 1,435,000 35,616,700
Goldman Sachs Group, Inc. (The) 192,493 31,591,951
Greenhill & Co., Inc.(S) 255,800 13,288,810
KKR & Co. LP 1,134,377 27,349,829
Morgan Stanley(S) 1,571,000 46,360,210
State Street Corp. 591,900 39,627,705
235,666,623
Chemicals (3.0%)
Agrium, Inc. (Canada)(S) 277,800 24,196,380
Dow Chemical Co. (The) 1,100,300 50,074,653
HB Fuller Co. 102,771 4,787,073
Huntsman Corp. 868,100 19,028,752
LyondellBasell Industries NV Class A 499,800 39,364,248
Potash Corp. of Saskatchewan, Inc. (Canada)(S) 652,200 20,426,904
157,878,010
Commercial banks (2.8%)
Barclays PLC (United Kingdom) 2,591,078 11,607,055
Commerzbank AG (Germany)(NON) 505,335 8,604,507
Fifth Third Bancorp 544,200 11,439,084
UniCredit SpA (Italy) 1,138,142 8,565,365
Wells Fargo & Co. 2,381,979 107,998,928
148,214,939
Commercial services and supplies (0.7%)
ADT Corp. (The)(S) 305,421 9,174,847
Tyco International, Ltd. 664,142 26,891,110
36,065,957
Communications equipment (2.1%)
Cisco Systems, Inc. 4,155,557 91,048,254
Qualcomm, Inc. 261,300 19,393,686
110,441,940
Computers and peripherals (1.9%)
Apple, Inc. 85,300 42,701,180
Hewlett-Packard Co. 783,300 22,715,700
NetApp, Inc. 245,700 10,402,938
SanDisk Corp. 127,900 8,895,445
Western Digital Corp. 179,900 15,501,983
100,217,246
Construction and engineering (0.1%)
KBR, Inc. 226,900 7,101,970
7,101,970
Construction materials (0.2%)
Buzzi Unicem SpA (Italy) 475,647 8,692,391
8,692,391
Consumer finance (0.6%)
Capital One Financial Corp. 406,038 28,670,343
28,670,343
Containers and packaging (0.2%)
MeadWestvaco Corp. 303,500 10,947,245
10,947,245
Diversified consumer services (0.4%)
ITT Educational Services, Inc.(NON)(S) 528,300 15,532,020
Weight Watchers International, Inc.(S) 251,600 6,800,748
22,332,768
Diversified financial services (6.9%)
Bank of America Corp. 5,392,394 90,322,600
Citigroup, Inc. 1,977,380 93,787,133
CME Group, Inc. 407,800 30,487,128
JPMorgan Chase & Co. 2,744,046 151,910,387
366,507,248
Diversified telecommunication services (0.6%)
AT&T, Inc. 643,800 21,451,416
Verizon Communications, Inc. 262,459 12,603,281
34,054,697
Electric utilities (1.5%)
American Electric Power Co., Inc. 226,500 11,055,465
Edison International 378,000 18,204,480
FirstEnergy Corp. 833,200 26,237,468
NextEra Energy, Inc.(S) 194,700 17,898,771
PPL Corp. 254,800 7,789,236
81,185,420
Electrical equipment (0.5%)
Eaton Corp PLC 252,300 18,440,607
Schneider Electric SA (France) 63,496 5,128,801
23,569,408
Electronic equipment, instruments, and components (0.3%)
Corning, Inc. 852,500 14,671,525
14,671,525
Energy equipment and services (2.8%)
Ezion Holdings, Ltd. (Singapore) 3,489,600 6,149,677
FMC Technologies, Inc.(NON) 211,000 10,431,840
Halliburton Co. 1,169,600 57,322,096
Nabors Industries, Ltd. 829,000 14,159,320
Oil States International, Inc.(NON) 149,000 13,998,550
Petrofac, Ltd. (United Kingdom) 581,607 11,042,989
Rowan Cos. PLC Class A(NON) 287,400 9,015,738
Schlumberger, Ltd. 284,339 24,899,566
147,019,776
Food and staples retail (1.4%)
CVS Caremark Corp. 1,084,400 73,435,568
73,435,568
Food products (1.7%)
Hillshire Brands Co. 438,620 15,623,644
Kellogg Co. 360,100 20,878,598
Kraft Foods Group, Inc. 257,600 13,485,360
Mead Johnson Nutrition Co. 167,400 12,871,386
Mondelez International, Inc. Class A(S) 760,900 24,919,475
87,778,463
Health-care equipment and supplies (2.0%)
Baxter International, Inc. 805,600 55,022,480
Covidien PLC 322,072 21,978,193
St. Jude Medical, Inc. 501,600 30,462,168
107,462,841
Health-care providers and services (2.3%)
Aetna, Inc. 609,200 41,626,636
Catamaran Corp.(NON) 432,800 21,042,736
Emeritus Corp.(NON) 350,100 7,719,705
Express Scripts Holding Co.(NON) 239,800 17,910,662
LifePoint Hospitals, Inc.(NON) 159,100 8,433,891
UnitedHealth Group, Inc. 372,500 26,924,300
123,657,930
Hotels, restaurants, and leisure (0.8%)
Carnival Corp. 522,200 20,465,018
Intrawest Resorts Holdings, Inc.(NON) 509,699 6,065,418
Marriott International, Inc. Class A 333,800 16,456,340
42,986,776
Household durables (0.8%)
PulteGroup, Inc. 933,600 18,970,752
Whirlpool Corp. 180,900 24,113,970
43,084,722
Household products (0.2%)
Procter & Gamble Co. (The) 130,300 9,983,586
9,983,586
Independent power producers and energy traders (1.1%)
Calpine Corp.(NON) 1,757,517 33,357,673
NRG Energy, Inc.(S) 948,600 26,418,510
59,776,183
Industrial conglomerates (2.5%)
General Electric Co. 3,160,820 79,431,407
Siemens AG (Germany)(S) 403,382 51,118,103
130,549,510
Insurance (5.5%)
ACE, Ltd. 197,000 18,480,570
Allstate Corp. (The) 262,200 13,424,640
American International Group, Inc. 1,148,225 55,068,871
Assured Guaranty, Ltd. 357,580 7,562,817
Chubb Corp. (The) 87,275 7,378,228
Everest Re Group, Ltd.(S) 56,020 8,109,455
Hartford Financial Services Group, Inc. (The) 1,314,100 43,693,825
Lincoln National Corp.(S) 606,400 29,125,392
MetLife, Inc. 1,397,187 68,532,022
Prudential Financial, Inc. 244,900 20,667,111
Prudential PLC (United Kingdom) 984,988 19,884,027
291,926,958
Internet and catalog retail (0.1%)
Bigfoot GmbH (acquired 8/2/13, cost $2,571,898) (Private) (Brazil)(F)(RES)(NON) 117 1,958,327
Zalando AG (acquired 9/30/13, cost $5,246,296) (Private) (Germany)(F)(RES)(NON) 117 4,445,669
6,403,996
Internet software and services (0.6%)
Google, Inc. Class A(NON) 11,791 13,924,817
Yahoo!, Inc.(NON) 452,000 16,281,040
30,205,857
IT Services (0.8%)
Computer Sciences Corp. 307,500 18,576,075
Fidelity National Information Services, Inc. 150,500 7,630,350
Xerox Corp. 1,227,600 13,319,460
39,525,885
Machinery (0.8%)
Caterpillar, Inc.(S) 181,300 17,025,883
Ingersoll-Rand PLC 49,610 2,916,572
Joy Global, Inc.(S) 328,400 17,336,236
TriMas Corp.(NON) 94,931 3,303,599
40,582,290
Media (3.7%)
CBS Corp. Class B (non-voting shares) 814,700 47,839,184
Comcast Corp. Class A 719,600 39,182,220
DISH Network Corp. Class A(NON) 376,900 21,249,622
Liberty Global PLC Class A (United Kingdom)(NON)(S) 295,200 23,595,336
Time Warner Cable, Inc. 117,680 15,683,214
Time Warner, Inc. 440,500 27,676,615
Viacom, Inc. Class B 162,000 13,300,200
WPP PLC (United Kingdom) 415,230 8,716,751
197,243,142
Metals and mining (1.2%)
Barrick Gold Corp. (Canada) 781,500 15,067,320
BHP Billiton, Ltd. (Australia) 424,362 13,581,384
Freeport-McMoRan Copper & Gold, Inc. (Indonesia) 851,238 27,588,624
Goldcorp, Inc. (Toronto Exchange) (Canada) 168,700 4,198,943
Newmont Mining Corp. 106,000 2,289,600
62,725,871
Multi-utilities (1.0%)
Ameren Corp. 437,600 16,558,784
CMS Energy Corp.(S) 271,100 7,533,869
National Grid PLC (United Kingdom) 812,784 10,542,101
PG&E Corp. 413,400 17,424,810
52,059,564
Multiline retail (0.6%)
Macy's, Inc. 421,300 22,413,160
Target Corp. 175,600 9,945,984
32,359,144
Oil, gas, and consumable fuels (11.7%)
Anadarko Petroleum Corp. 304,600 24,578,174
Cabot Oil & Gas Corp. 716,300 28,637,674
Cameco Corp. (Canada)(S) 256,300 5,447,022
Chevron Corp. 559,300 62,434,659
CONSOL Energy, Inc. 210,400 7,858,440
EnCana Corp. (Canada) 434,471 7,809,750
Energen Corp. 95,500 6,753,760
Energy Transfer Equity LP 391,000 16,312,520
EP Energy Corp. Class A(NON)(S) 595,810 10,247,932
Exxon Mobil Corp. 1,242,992 114,554,143
Gulfport Energy Corp.(NON) 334,400 20,381,680
HRT Participacoes em Petroleo SA (Brazil)(NON) 1,107,000 532,112
Kodiak Oil & Gas Corp.(NON) 2,057,800 21,833,258
Marathon Oil Corp. 1,684,800 55,244,592
MPLX LP (Partnership shares) 74,782 3,440,720
Nordic American Tankers, Ltd. (Norway)(S) 870,800 9,526,552
Occidental Petroleum Corp. 380,814 33,347,882
QEP Resources, Inc. 1,194,200 36,888,838
Royal Dutch Shell PLC ADR (United Kingdom) 1,540,032 106,416,211
Southwestern Energy Co.(NON) 415,700 16,914,833
Suncor Energy, Inc. (Canada) 868,868 28,544,898
617,705,650
Paper and forest products (0.5%)
International Paper Co. 544,000 25,970,560
25,970,560
Personal products (0.4%)
Coty, Inc. Class A 1,689,145 22,786,566
22,786,566
Pharmaceuticals (9.8%)
AbbVie, Inc. 504,900 24,856,227
Actavis PLC(NON) 182,600 34,507,748
AstraZeneca PLC ADR (United Kingdom)(S) 936,900 59,493,150
Bristol-Myers Squibb Co. 425,000 21,237,250
Eli Lilly & Co. 752,300 40,631,723
Johnson & Johnson 763,600 67,555,692
Merck & Co., Inc. 1,560,991 82,685,693
Pfizer, Inc. 2,902,434 88,233,994
Sanofi ADR (France)(S) 563,400 27,550,260
Shire PLC ADR (United Kingdom) 130,700 19,555,334
Teva Pharmaceutical Industries, Ltd. ADR (Israel)(S) 620,300 27,683,989
Zoetis, Inc. 813,938 24,711,158
518,702,218
Real estate investment trusts (REITs) (1.2%)
Altisource Residential Corp. (Virgin Islands) 420,000 12,600,000
American Homes 4 Rent Class A 322,800 5,384,304
American Tower Corp. 242,900 19,645,752
Equity Lifestyle Properties, Inc. 374,600 14,725,526
HCP, Inc. 217,400 8,511,210
60,866,792
Semiconductors and semiconductor equipment (2.2%)
Fairchild Semiconductor International, Inc.(NON) 768,400 9,804,784
Intel Corp. 909,500 22,319,130
Lam Research Corp.(NON) 400,950 20,292,080
Magnachip Semiconductor Corp. (South Korea)(NON) 97,174 1,536,321
Maxim Integrated Products, Inc. 266,500 8,064,290
Micron Technology, Inc.(NON) 1,508,700 34,760,448
Samsung Electronics Co., Ltd. (South Korea) 15,636 18,698,631
115,475,684
Software (1.3%)
Microsoft Corp. 877,200 33,202,020
Oracle Corp. 1,013,400 37,394,460
70,596,480
Specialty retail (2.2%)
American Eagle Outfitters, Inc.(S) 614,100 8,308,773
Bed Bath & Beyond, Inc.(NON)(S) 410,900 26,235,965
Best Buy Co., Inc. 185,600 4,369,024
Home Depot, Inc. (The) 339,500 26,090,575
Office Depot, Inc.(NON) 5,475,400 26,774,706
Select Comfort Corp.(NON)(S) 258,900 4,238,193
Tile Shop Holdings, Inc.(NON) 774,700 10,946,511
WH Smith PLC (United Kingdom) 407,520 6,987,282
113,951,029
Thrifts and mortgage finance (0.3%)
Radian Group, Inc.(S) 1,223,900 18,211,632
18,211,632
Tobacco (1.2%)
Altria Group, Inc. 1,013,200 35,684,904
Philip Morris International, Inc. 379,400 29,646,316
65,331,220
Trading companies and distributors (0.3%)
WESCO International, Inc.(NON)(S) 217,200 18,018,912
18,018,912
Wireless telecommunication services (0.8%)
Vodafone Group PLC ADR (United Kingdom) 1,119,600 41,492,376
41,492,376
Total common stocks (cost $4,337,671,380) $5,195,382,890

WARRANTS (—%)(a)(NON)
Expiration date Strike Price Warrants Value
HRT Participacoes EM Petroleo SA 144A (Brazil) 4/4/16 BRL 0.00001 2,098,210 $1,005,005
Total warrants (cost $4,199,669) $1,005,005

SHORT-TERM INVESTMENTS (8.7%)(a)
Principal amount/shares Value
Putnam Cash Collateral Pool, LLC 0.15%(d) 359,006,389 $359,006,389
Putnam Short Term Investment Fund 0.07%(AFF) 99,015,755 99,015,755
U.S. Treasury Bills with an effective yield of 0.13%, May 29, 2014(SEGSF) $1,141,000 1,140,881
U.S. Treasury Bills with an effective yield of 0.10%, January 8, 2015(SEGSF) 545,000 544,538
U.S. Treasury Bills with effective yields ranging from 0.10% to 0.11%, April 3, 2014(SEGSF) 958,000 957,972
Total short-term investments (cost $460,664,975) $460,665,535

TOTAL INVESTMENTS
Total investments (cost $4,802,536,024)(b) $5,657,053,430














OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 1/31/14 (Unaudited)
Upfront     Payments Total return
Swap counterparty/ premium     Termination received (paid) by received by Unrealized
Notional amount received (paid)     date fund per annum or paid by fund depreciation
Bank of America N.A.
shares 67,134 $—      5/6/14 (3 month USD-LIBOR-BBA plus 0.48%) BofA MLTR GOLD Index $(343,072)
shares 59,546 —      5/6/14 (3 month USD-LIBOR-BBA plus 0.48%) BofA MLTR GOLD Index (304,295)
Deutsche Bank AG
baskets 247,988 —      10/20/14 (1 month USD-LIBOR-BBA plus 0.82%) A basket (DBVODSTB) of common stocks (500,592)
baskets 505,570 —      10/20/14 (1 month USD-LIBOR-BBA plus 0.82%) A basket (DBVODSTB) of common stocks (1,125,739)
Total$—     $(2,273,698)










Key to holding's abbreviations
ADR American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank
Notes to the fund's portfolio
Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from November 1, 2013 through January 31, 2014 (the reporting period). Within the following notes to the portfolio, references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures , references to “Putnam Management” represent Putnam Investment Management, LLC, the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter.
(a) Percentages indicated are based on net assets of $5,280,298,536.
(b) The aggregate identified cost on a tax basis is $4,853,010,798, resulting in gross unrealized appreciation and depreciation of $911,333,999 and $107,291,367, respectively, or net unrealized appreciation of $804,042,632.
(NON) Non-income-producing security.
(RES) Security is restricted with regard to public resale. The total fair value of this security and any other restricted securities (excluding 144A securities), if any, held at the close of the reporting period was $6,403,996, or 0.1% of net assets.
(AFF) Affiliated company. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. Transactions during the period with Putnam Short Term Investment Fund, which is under common ownership and control, were as follows:
Name of affiliate Fair value at the beginning of the reporting period Purchase cost Sale proceeds Investment income Fair value at the end of the reporting period
Putnam Short Term Investment Fund * $156,499,916 $201,420,067 $258,904,228 $35,108 $99,015,755
* Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management.
(SEGSF) This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivative contracts at the close of the reporting period.
(d) Affiliated company. The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. At the close of the reporting period, the value of securities loaned amounted to $348,174,937.
The fund received cash collateral of $359,006,389, which is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged to Putnam Cash Collateral Pool, LLC. The rate quoted in the security description is the annualized 7-day yield at the close of the reporting period.
(F) Security is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for ASC 820 based on the securities' valuation inputs.
(S) Security on loan, in part or in entirety, at the close of the reporting period.
(UR) At the reporting period end, 74,100 shares owned by the fund were not formally entered on the company’s shareholder register, due to local restrictions and foreign ownership. While the fund has full title to these unregistered shares, these shares do not carry voting rights and, until 2014, are not eligible for receipt of dividends.
At the close of the reporting period, the fund maintained liquid assets totaling $2,301,364 to cover certain derivatives contracts.
144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under ASC 820. If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.
Investments in open-end investment companies (excluding exchange traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.
Market quotations are not considered to be readily available for certain debt obligations and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value and are classified as Level 2 securities.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value and are classified as Level 2 securities.
To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.
Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.
Total return swap contracts: The fund entered into OTC total return swap contracts, which are arrangements to exchange a market linked return for a periodic payment, both based on a notional principal amount, to hedge risk in a security it owns.
To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. OTC total return swap contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain OTC total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty.
For the fund's average notional amount on OTC total return swap contracts, see the appropriate table at the end of these footnotes.
Master agreements: The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio.
Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.
Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity.
At the close of the reporting period, the fund had a net liability position of $2,273,698 on open derivative contracts subject to the Master Agreements. Collateral posted by the fund for these agreements totaled $1,863,483.












ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:
Level 1: Valuations based on quoted prices for identical securities in active markets.
Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.
The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:

 Valuation inputs
Investments in securities: Level 1 Level 2 Level 3
Common stocks *:
    Consumer discretionary $524,550,807 $— $6,403,996
    Consumer staples 341,066,846 — —
    Energy 764,725,426 — —
    Financials 1,150,064,535 — —
    Health care 749,822,989 — —
    Industrials 642,831,357 — —
    Information technology 481,134,617 — —
    Materials 266,214,077 — —
    Telecommunication services 75,547,073 — —
    Utilities 193,021,167 — —
Total common stocks 5,188,978,894 — 6,403,996
Warrants — 1,005,005 —
Short-term investments 99,015,755 361,649,780 —
Totals by level $5,287,994,649 $362,654,785 $6,403,996



Valuation inputs
Other financial instruments: Level 1 Level 2 Level 3
Total return swap contracts $— $(2,273,698) $—
Totals by level $— $(2,273,698) $—


* Common stock classifications are presented at the sector level, which may differ from the fund's portfolio presentation.
At the start and close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund's portfolio.

Fair Value of Derivative Instruments as of the close of the reporting period
Asset derivatives Liability derivatives
Derivatives not accounted for as hedging instruments under ASC 815 Fair value Fair value
Equity contracts $1,005,005 $2,273,698
Total $1,005,005 $2,273,698


The volume of activity for the reporting period for any derivative type that was held at the close of the period is listed below and was as follows based on an average of the holdings of that derivative at the end of each fiscal quarter in the reporting period:
OTC total return swap contracts (notional)$25,900,000
Warrants (number of warrants)2,100,000

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com



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

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.

The Putnam Fund for Growth and Income
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: March 28, 2014

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/ Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer
Date: March 28, 2014

By (Signature and Title):
/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: March 28, 2014