N-Q 1 a_growthincome.htm THE PUTNAM FUND FOR GROWTH AND INCOME a_growthincome.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:         Bryan Chegwidden, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
Registrant’s telephone number, including area code: (617) 292-1000
Date of fiscal year end: October 31, 2014
Date of reporting period: July 31, 2014



Item 1. Schedule of Investments:













The Putnam Fund for Growth and Income

The fund's portfolio
7/31/14 (Unaudited)
COMMON STOCKS (95.1%)(a)
Shares Value
Aerospace and defense (5.1%)
Airbus Group NV (France) 452,874 $26,189,737
Embraer SA ADR (Brazil)(S) 227,300 8,646,492
General Dynamics Corp. 382,000 44,606,140
Honeywell International, Inc. 565,900 51,966,597
L-3 Communications Holdings, Inc. 284,100 29,819,136
Northrop Grumman Corp. 464,100 57,209,607
Raytheon Co. 329,100 29,872,407
Rockwell Collins, Inc. 144,000 10,550,880
United Technologies Corp. 211,400 22,228,710
281,089,706
Airlines (1.4%)
American Airlines Group, Inc.(NON) 573,600 22,284,360
Delta Air Lines, Inc. 1,012,900 37,943,234
Japan Airlines Co., Ltd. (Japan)(UR) 289,500 16,021,993
76,249,587
Auto components (0.4%)
Dana Holding Corp.(S) 372,600 8,338,788
Johnson Controls, Inc. 265,200 12,528,048
20,866,836
Automobiles (0.8%)
Ford Motor Co. 710,200 12,087,604
General Motors Co. 981,000 33,177,420
45,265,024
Banks (9.5%)
Bank of America Corp. 6,022,794 91,847,609
Citigroup, Inc. 2,435,780 119,134,000
Fifth Third Bancorp 541,400 11,087,872
JPMorgan Chase & Co. 2,870,846 165,561,689
SVB Financial Group(NON) 80,465 8,772,294
UniCredit SpA (Italy) 1,151,234 8,969,601
Wells Fargo & Co. 2,435,679 123,976,061
529,349,126
Beverages (1.1%)
Coca-Cola Enterprises, Inc. 310,800 14,125,860
Dr. Pepper Snapple Group, Inc. 189,800 11,152,648
PepsiCo, Inc. 382,300 33,680,630
58,959,138
Biotechnology (0.3%)
Gilead Sciences, Inc.(NON) 181,200 16,588,860
16,588,860
Building products (0.1%)
Allegion PLC (Ireland) 154,200 7,930,506
7,930,506
Capital markets (4.3%)
Carlyle Group LP (The) 845,000 28,206,100
Charles Schwab Corp. (The) 1,427,700 39,618,675
E*Trade Financial Corp.(NON) 268,900 5,652,278
Goldman Sachs Group, Inc. (The) 171,193 29,594,134
Greenhill & Co., Inc. 380,100 17,397,177
KKR & Co. LP 1,128,577 25,866,985
Morgan Stanley 1,375,100 44,470,734
State Street Corp. 551,800 38,868,792
WisdomTree Investments, Inc.(NON)(S) 867,600 8,901,576
238,576,451
Chemicals (1.9%)
Axiall Corp.(S) 318,700 13,649,921
Dow Chemical Co. (The) 1,068,100 54,547,867
Huntsman Corp. 679,900 17,711,395
Linde AG (Germany) 69,691 14,268,518
Symrise AG (Germany) 163,149 8,539,309
108,717,010
Commercial services and supplies (0.8%)
ADT Corp. (The)(S) 303,821 10,572,971
Tyco International, Ltd. 762,742 32,912,317
43,485,288
Communications equipment (0.9%)
Cisco Systems, Inc. 2,099,757 52,976,869
52,976,869
Consumer finance (0.6%)
Capital One Financial Corp. 403,938 32,129,229
32,129,229
Containers and packaging (0.3%)
MeadWestvaco Corp.(S) 384,900 16,088,820
16,088,820
Diversified consumer services (0.2%)
ITT Educational Services, Inc.(NON)(S) 616,249 8,769,223
8,769,223
Diversified financial services (0.7%)
CBOE Holdings, Inc. 225,100 10,910,597
CME Group, Inc. 405,700 29,997,458
40,908,055
Diversified telecommunication services (1.2%)
AT&T, Inc.(S) 547,200 19,474,848
Verizon Communications, Inc. 940,214 47,405,590
66,880,438
Electric utilities (1.4%)
American Electric Power Co., Inc. 225,400 11,718,546
Edison International 376,100 20,610,280
Exelon Corp. 493,564 15,339,969
FirstEnergy Corp. 537,000 16,759,770
NextEra Energy, Inc. 172,500 16,196,025
80,624,590
Electrical equipment (0.5%)
Eaton Corp PLC 371,700 25,245,864
25,245,864
Electronic equipment, instruments, and components (0.5%)
Anixter International, Inc. 128,000 11,004,160
Corning, Inc. 848,200 16,667,130
27,671,290
Energy equipment and services (2.1%)
Aker Solutions ASA (Norway) 524,355 7,703,241
Ezion Holdings, Ltd. (Singapore) 3,471,600 5,957,945
Halliburton Co. 800,800 55,247,192
Oil States International, Inc.(NON) 148,200 9,083,178
Schlumberger, Ltd. 282,939 30,667,758
Transocean, Ltd. (Switzerland)(S) 262,100 10,573,114
119,232,428
Food and staples retail (1.4%)
CVS Caremark Corp. 1,033,700 78,933,332
78,933,332
Food products (1.9%)
Hershey Co. (The) 188,100 16,581,015
Kellogg Co. 488,900 29,250,887
Kraft Foods Group, Inc. 287,900 15,427,122
Mead Johnson Nutrition Co. 166,600 15,233,904
Mondelez International, Inc. Class A 757,000 27,252,000
103,744,928
Health-care equipment and supplies (2.6%)
Abbott Laboratories 410,600 17,294,472
Baxter International, Inc. 708,500 52,917,865
Covidien PLC 155,472 13,449,883
St. Jude Medical, Inc. 519,000 33,833,610
Zimmer Holdings, Inc. 261,100 26,128,277
143,624,107
Health-care providers and services (1.7%)
Aetna, Inc. 284,200 22,034,026
Catamaran Corp.(NON) 241,300 10,976,737
CIGNA Corp. 181,800 16,369,272
Community Health Systems, Inc.(NON) 252,800 12,058,560
HCA Holdings, Inc.(NON) 255,500 16,686,705
UnitedHealth Group, Inc. 201,900 16,363,995
94,489,295
Hotels, restaurants, and leisure (1.0%)
Hilton Worldwide Holdings, Inc.(NON) 1,143,400 27,681,714
Intrawest Resorts Holdings, Inc.(NON) 507,099 5,715,006
Penn National Gaming, Inc.(NON) 764,436 8,011,289
Vail Resorts, Inc. 156,300 11,800,650
53,208,659
Household durables (0.8%)
PulteGroup, Inc. 928,900 16,395,085
Whirlpool Corp. 180,000 25,675,200
42,070,285
Household products (1.1%)
Colgate-Palmolive Co. 451,300 28,612,420
Energizer Holdings, Inc. 78,655 9,026,448
Procter & Gamble Co. (The) 272,900 21,100,628
58,739,496
Independent power and renewable electricity producers (1.3%)
Calpine Corp.(NON) 1,649,417 36,353,151
NextEra Energy Partners LP(NON) 103,526 3,524,025
NRG Energy, Inc. 1,047,700 32,436,792
72,313,968
Industrial conglomerates (2.3%)
General Electric Co. 3,075,720 77,354,358
Siemens AG (Germany) 401,334 49,650,390
127,004,748
Insurance (4.5%)
ACE, Ltd. 166,900 16,706,690
Allstate Corp. (The) 199,200 11,643,240
American International Group, Inc. 1,199,325 62,340,914
Assured Guaranty, Ltd. 866,780 19,346,530
Chubb Corp. (The) 86,875 7,532,931
Everest Re Group, Ltd. 55,720 8,687,305
Hartford Financial Services Group, Inc. (The) 1,488,100 50,833,496
MetLife, Inc. 712,687 37,487,336
Prudential Financial, Inc. 159,300 13,854,321
Prudential PLC (United Kingdom) 979,986 22,566,074
250,998,837
Internet and catalog retail (0.1%)
Bigfoot GmbH (acquired 8/2/13, cost $2,571,898) (Private) (Brazil)(F)(RES)(NON) 117 1,685,722
Zalando AG (acquired 9/30/13, cost $5,246,296) (Private) (Germany)(F)(RES)(NON) 234 5,196,706
6,882,428
Internet software and services (0.6%)
Google, Inc. Class C(NON) 35,391 20,229,496
Yahoo!, Inc.(NON) 395,000 14,144,950
34,374,446
IT Services (0.5%)
Computer Sciences Corp. 305,900 19,085,101
Fidelity National Information Services, Inc. 149,700 8,443,080
27,528,181
Machinery (0.1%)
TriMas Corp.(NON) 166,031 5,259,862
5,259,862
Media (3.0%)
CBS Corp. Class B (non-voting shares) 638,100 36,263,223
Comcast Corp. Class A 806,700 43,343,991
DISH Network Corp. Class A(NON) 375,000 23,197,500
Liberty Global PLC Ser. C (United Kingdom)(S) 914,900 36,586,851
Time Warner, Inc. 262,600 21,801,052
WPP PLC (United Kingdom) 390,545 7,770,343
168,962,960
Metals and mining (1.3%)
Barrick Gold Corp. (Canada) 889,300 16,078,544
BHP Billiton, Ltd. (Australia) 422,207 15,010,896
Freeport-McMoRan, Inc. (Indonesia) 846,938 31,523,032
Goldcorp, Inc. (Toronto Exchange) (Canada) 167,800 4,597,720
Hi-Crush Partners LP (Units) 88,100 5,389,077
72,599,269
Multi-utilities (0.8%)
Ameren Corp. 435,400 16,741,130
CMS Energy Corp. 269,700 7,802,421
PG&E Corp.(S) 411,300 18,372,771
42,916,322
Multiline retail (0.8%)
Macy's, Inc. 362,000 20,919,980
Target Corp. 433,100 25,808,429
46,728,409
Oil, gas, and consumable fuels (11.7%)
Anadarko Petroleum Corp. 159,700 17,063,945
Cabot Oil & Gas Corp. 837,100 27,582,445
Cheniere Energy, Inc.(NON) 150,400 10,642,304
Chevron Corp. 526,200 68,006,088
CONSOL Energy, Inc. 355,200 13,788,864
EnCana Corp. (Canada) 808,026 17,400,331
Energen Corp. 95,000 7,754,850
EOG Resources, Inc. 158,100 17,302,464
EP Energy Corp. Class A(NON)(S) 843,410 16,868,200
Exxon Mobil Corp. 1,190,392 117,777,384
Gulfport Energy Corp.(NON) 370,400 19,783,064
Kodiak Oil & Gas Corp.(NON) 2,026,300 31,488,702
Marathon Oil Corp. 1,173,600 45,477,000
MPLX LP 189,100 10,731,425
Noble Energy, Inc. 115,200 7,659,648
Nordic American Offshore, Ltd. (Norway) 7,507 137,378
Nordic American Tankers, Ltd. (Norway)(S) 866,400 7,459,704
Occidental Petroleum Corp. 224,814 21,966,576
QEP Resources, Inc. 1,188,100 39,266,705
Royal Dutch Shell PLC ADR (United Kingdom)(S) 1,113,728 91,136,362
Scorpio Tankers, Inc. 624,700 5,865,933
Southwestern Energy Co.(NON) 316,500 12,843,570
Suncor Energy, Inc. (Canada) 670,682 27,538,344
Valero Energy Corp. 232,700 11,821,160
647,362,446
Paper and forest products (0.6%)
International Paper Co. 471,800 22,410,500
Louisiana-Pacific Corp.(NON)(S) 814,800 11,032,392
33,442,892
Personal products (0.5%)
Coty, Inc. Class A(S) 1,680,545 28,754,125
28,754,125
Pharmaceuticals (9.9%)
AbbVie, Inc. 580,600 30,388,604
Actavis PLC(NON) 197,400 42,294,924
AstraZeneca PLC ADR (United Kingdom) 1,021,900 74,384,101
Bristol-Myers Squibb Co. 671,100 33,971,082
Eli Lilly & Co. 668,500 40,818,610
Johnson & Johnson 759,700 76,038,373
Merck & Co., Inc. 1,553,091 88,122,383
Pfizer, Inc. 2,887,734 82,877,966
Sanofi ADR (France) 560,500 29,297,335
Teva Pharmaceutical Industries, Ltd. ADR (Israel) 516,100 27,611,350
Zoetis, Inc. 809,838 26,651,769
552,456,497
Professional services (0.1%)
Nielsen Holdings NV 88,101 4,062,337
4,062,337
Real estate investment trusts (REITs) (0.8%)
Altisource Residential Corp. 489,934 11,361,569
American Tower Corp. 186,800 17,632,052
Equity Lifestyle Properties, Inc. 318,000 14,084,220
43,077,841
Semiconductors and semiconductor equipment (2.5%)
Fairchild Semiconductor International, Inc.(NON)(S) 551,400 8,392,308
Intel Corp.(S) 1,401,800 47,507,002
Lam Research Corp. 432,750 30,292,500
Micron Technology, Inc.(NON) 1,120,400 34,228,220
Samsung Electronics Co., Ltd. (South Korea) 15,571 20,288,292
140,708,322
Software (2.0%)
Microsoft Corp. 1,009,800 43,582,968
Oracle Corp. 1,339,400 54,098,366
TiVo, Inc.(NON) 862,100 11,603,866
109,285,200
Specialty retail (2.1%)
Bed Bath & Beyond, Inc.(NON)(S) 435,700 27,575,453
Gap, Inc. (The) 481,000 19,292,910
GNC Holdings, Inc. Class A 158,600 5,203,666
Home Depot, Inc. (The) 212,300 17,164,455
Office Depot, Inc.(NON) 3,575,100 17,911,251
Select Comfort Corp.(NON) 601,700 12,154,340
Tile Shop Holdings, Inc.(NON)(S) 1,188,500 12,015,735
WH Smith PLC (United Kingdom) 405,451 7,706,666
119,024,476
Technology hardware, storage, and peripherals (2.4%)
Apple, Inc. 721,600 68,963,312
Hewlett-Packard Co. 721,100 25,678,371
NetApp, Inc. 244,500 9,496,380
SanDisk Corp. 159,800 14,655,258
Western Digital Corp. 123,800 12,358,954
131,152,275
Textiles, apparel, and luxury goods (0.1%)
Coach, Inc. 170,200 5,882,112
5,882,112
Thrifts and mortgage finance (0.5%)
Radian Group, Inc.(S) 2,089,055 26,447,436
26,447,436
Tobacco (1.4%)
Altria Group, Inc. 671,000 27,242,600
Philip Morris International, Inc. 633,500 51,953,335
79,195,935
Trading companies and distributors (0.1%)
WESCO International, Inc.(NON) 105,300 8,264,997
8,264,997
Wireless telecommunication services (0.5%)
Vodafone Group PLC ADR (United Kingdom) 795,022 26,410,628
26,410,628
Total common stocks (cost $4,364,687,527) $5,283,511,389

INVESTMENT COMPANIES (0.8%)(a)
Shares Value
Vanguard MSCI Emerging Markets ETF 983,400 $42,994,248
Total investment companies (cost $42,826,646) $42,994,248

CONVERTIBLE PREFERRED STOCKS (0.2%)(a)
Shares Value
American Tower Corp. Ser. A, $5.25 cv. pfd.(NON)(R) 57,258 $6,319,852
Tyson Foods, Inc. $2.375 cv. pfd.(NON) 133,493 6,594,554
Total convertible preferred stocks (cost $12,400,450) $12,914,406

SHORT-TERM INVESTMENTS (6.8%)(a)
Principal amount/shares Value
Putnam Cash Collateral Pool, LLC 0.18%(d) Shares 200,921,725 $200,921,725
Putnam Short Term Investment Fund 0.05%(AFF) Shares 172,820,604 172,820,604
SSgA Prime Money Market Fund 0.01%(P) Shares 1,120,000 1,120,000
U.S. Treasury Bills with an effective yield of 0.12%, February 5, 2015 $315,000 314,918
U.S. Treasury Bills with an effective yield of 0.10%, January 8, 2015 696,000 695,838
U.S. Treasury Bills with an effective yield of 0.04%, October 23, 2014 479,000 478,975
Total short-term investments (cost $376,351,773) $376,352,060

TOTAL INVESTMENTS
Total investments (cost $4,796,266,396)(b) $5,715,772,103














OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/14 (Unaudited)
Upfront     Payments Total return Unrealized
Swap counterparty/ premium     Termination received (paid) by received by appreciation/
Notional amount received (paid)     date fund per annum or paid by fund (depreciation)
Bank of America N.A.
shares 126,680 $—      5/6/15 (3 month USD-LIBOR-BBA plus 0.48%) BofA MLTR GOLD Index $598,014
Total$—     $598,014










Key to holding's abbreviations
ADR American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank
ETF Exchange Traded Fund
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 July 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 $5,554,261,637.
(b) The aggregate identified cost on a tax basis is $4,846,741,170, resulting in gross unrealized appreciation and depreciation of $969,582,538 and $100,551,605, respectively, or net unrealized appreciation of $869,030,933.
(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 $6,882,428, 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 $714,850,507 $698,529,819 $69,246 $172,820,604
* Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management.
(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.
The fund received cash collateral of $200,921,725, 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. At the close of the reporting period, the value of securities loaned amounted to $193,262,305.
(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. At the close of the reporting period, fair value pricing was also used for certain foreign securities in the portfolio.
(P) Security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
(R) Real Estate Investment Trust.
(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 $6,674,650 to cover settlement of certain securities.
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. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.
To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures 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 gain exposure to certain sectors or industries.
To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. OTC 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, is presented in the fund’s portfolio.
Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.
Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.
At the close of the reporting period, the fund did not have a net liability position on open derivative contracts subject to the Master Agreements.












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 $495,300,975 $15,477,009 $6,882,428
    Consumer staples 408,326,954 — —
    Energy 752,933,688 13,661,186 —
    Financials 1,129,951,300 31,535,675 —
    Health care 807,158,759 — —
    Industrials 486,730,775 91,862,120 —
    Information technology 503,408,291 20,288,292 —
    Materials 193,029,268 37,818,723 —
    Telecommunication services 93,291,066 — —
    Utilities 195,854,880 — —
Total common stocks 5,065,985,956 210,643,005 6,882,428
Convertible preferred stocks 6,594,554 6,319,852 —
Investment companies 42,994,248 — —
Short-term investments 173,940,604 202,411,456 —
Totals by level $5,289,515,362 $419,374,313 $6,882,428



Valuation inputs
Other financial instruments: Level 1 Level 2 Level 3
Total return swap contracts $— $598,014 $—
Totals by level $— $598,014 $—


* 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 $598,014 $—
Total $598,014 $—


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)$16,300,000
 
The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions, if applicable, see note "(d)" above, and for borrowing transactions associated with securities sold short, if applicable, see the "Short sales of securities" note above.
           
      Bank of America N.A.   Total
           
  Assets:        
  OTC Total return swap contracts*#    $598,014    $598,014
           
  Total Assets  $598,014  $598,014
           
  Liabilities:        
  OTC Total return swap contracts*#    —    —
           
  Total Liabilities  $—  $—
           
  Total Financial and Derivative Net Assets    $598,014    $598,014
  Total collateral received (pledged)##†    $598,014    
  Net amount    $—    
           
* Excludes premiums, if any.
           
†  Additional collateral may be required from certain brokers based on individual agreements.
           
# Covered by master netting agreement.
           
## Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.

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: September 26, 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: September 26, 2014

By (Signature and Title):
/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: September 26 2014