N-Q 1 a_intlgrowth.htm PUTNAM INVESTMENT FUNDS a_intlgrowth.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: (811-07237)
Exact name of registrant as specified in charter: Putnam Investment Funds
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109
Name and address of agent for service: Beth S. Mazor, 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: September 30, 2011
Date of reporting period: June 30, 2011



Item 1. Schedule of Investments:













Putnam International Growth Fund

The fund's portfolio
6/30/11 (Unaudited)
COMMON STOCKS (98.1%)(a)
Shares Value
Aerospace and defense (0.5%)
MTU Aero Engines Holding AG (Germany) 28,130 $2,249,729
2,249,729
Airlines (0.9%)
Deutsche Lufthansa AG (Germany) 116,483 2,541,228
Turk Hava Yollari (Turkey)(NON) 607,803 1,590,275
4,131,503
Auto components (0.6%)
Faurecia (France) 68,110 2,920,885
2,920,885
Automobiles (4.6%)
Bayerische Motoren Werke (BMW) AG (Germany) 47,574 4,753,219
Dongfeng Motor Group Co., Ltd. (China) 1,344,000 2,561,788
Fiat SpA (Italy) 413,841 4,548,791
Nissan Motor Co., Ltd. (Japan) 517,000 5,429,448
Porsche Automobil Holding SE (Preference) (Germany) 40,713 3,233,606
20,526,852
Beverages (2.3%)
Anheuser-Busch InBev NV (Belgium) 142,312 8,265,481
Synergy Co. (Russia)(NON) 64,143 2,186,994
10,452,475
Biotechnology (1.3%)
Biotest AG (Preference) (Germany) 32,539 2,356,662
Dendreon Corp.(NON) 19,300 761,192
Grifols SA (Spain) 121,880 2,449,261
5,567,115
Building products (0.8%)
Compagnie de Saint-Goban (France) 42,444 2,752,029
JS Group Corp. (Japan) 37,000 953,859
3,705,888
Capital markets (1.0%)
Julius Baer Group, Ltd. (Switzerland)(NON) 50,236 2,076,401
Macquarie Group, Ltd. (Australia) 73,482 2,475,467
4,551,868
Chemicals (4.3%)
Arkema (France) 12,239 1,261,565
BASF SE (Germany) 64,818 6,359,400
Huabao International Holdings, Ltd. (China) 797,000 725,104
JSR Corp. (Japan) 111,500 2,164,259
Petronas Chemicals Group Bhd (Malaysia)(NON) 769,000 1,807,611
Syngenta AG (Switzerland)(NON) 14,044 4,743,454
Uralkali (Russia)(NON)(FWC) 209,381 1,886,523
18,947,916
Commercial banks (8.8%)
Banco Bradesco SA ADR (Brazil) 223,949 4,588,715
Barclays PLC (United Kingdom) 979,929 4,037,933
BNP Paribas SA (France) 42,528 3,286,987
China Construction Bank Corp. (China) 6,374,000 5,305,024
HSBC Holdings PLC (London Exchange) (United Kingdom) 273,529 2,717,908
Mitsubishi UFJ Financial Group, Inc. (Japan) 570,700 2,779,532
National Australia Bank, Ltd. (Australia) 75,354 2,080,008
Sberbank OJSC (Russia)(FWC) 1,684,804 6,200,079
Shinhan Financial Group Co., Ltd. (South Korea) 41,830 1,998,034
Standard Chartered PLC (United Kingdom) 230,862 6,076,146
39,070,366
Communications equipment (0.8%)
Telefonaktiebolaget LM Ericsson AB Class B (Sweden) 234,500 3,386,845
3,386,845
Computers and peripherals (0.4%)
SanDisk Corp.(NON) 44,300 1,838,450
1,838,450
Construction and engineering (0.5%)
Carillion PLC (United Kingdom) 353,501 2,136,268
2,136,268
Construction materials (1.8%)
BBMG Corp. (China) 3,906,000 5,860,670
China Shanshui Cement Group, Ltd. (China) 1,648,000 1,915,499
7,776,169
Diversified financial services (1.9%)
ING Groep NV GDR (Netherlands)(NON) 216,126 2,663,975
ORIX Corp. (Japan) 43,940 4,276,339
Warsaw Stock Exchange (Poland)(NON) 73,220 1,389,323
8,329,637
Diversified telecommunication services (0.8%)
Telenet Group Holding NV (Belgium)(NON) 72,451 3,451,574
3,451,574
Electric utilities (0.6%)
Fortum OYJ (Finland) 89,330 2,590,252
2,590,252
Electrical equipment (2.4%)
Mitsubishi Electric Corp. (Japan) 486,000 5,646,694
Schneider Electric SA (France) 28,983 4,847,998
10,494,692
Electronic equipment, instruments, and components (4.2%)
Hitachi, Ltd. (Japan) 594,000 3,512,825
Hollysys Automation Technologies, Ltd. (China)(NON)(S) 105,200 980,464
Hon Hai Precision Industry Co., Ltd. (Taiwan) 1,126,000 3,884,034
Kyocera Corp. (Japan) 31,800 3,236,372
LG Display Co., Ltd. (South Korea) 57,270 1,593,498
Murata Manufacturing Co., Ltd. (Japan) 47,400 3,167,754
Unimicron Technology Corp. (Taiwan) 1,117,000 1,997,897
18,372,844
Energy equipment and services (1.2%)
Technip SA (France) 48,410 5,196,637
5,196,637
Food and staples retail (1.3%)
Olam International, Ltd. (Rights) (Singapore)(NON)(F) 44,409 5,789
Olam International, Ltd. (Singapore) 977,000 2,174,320
WM Morrison Supermarkets PLC (United Kingdom) 753,767 3,605,602
5,785,711
Food products (4.9%)
Danone (France) 67,868 5,070,106
Kerry Group PLC Class A (Ireland) 126,881 5,253,353
Nestle SA (Switzerland) 161,353 10,033,555
Zhongpin, Inc. (China)(NON)(S) 129,800 1,360,304
21,717,318
Health-care equipment and supplies (1.3%)
BioMerieux (France) 37,899 4,405,650
Covidien PLC (Ireland) 27,135 1,444,396
5,850,046
Hotels, restaurants, and leisure (1.7%)
Compass Group PLC (United Kingdom) 354,530 3,423,649
Kuoni Reisen Holding AG (Cat B) (Switzerland)(NON) 3,379 1,306,962
TUI Travel PLC (United Kingdom) 745,448 2,687,831
7,418,442
Household durables (1.7%)
Barratt Developments PLC (United Kingdom)(NON) 1,091,325 2,002,544
LG Electronics, Inc. (South Korea) 10,897 850,504
Persimmon PLC (United Kingdom) 212,228 1,644,681
Rossi Residencial SA (Brazil) 379,200 3,099,774
7,597,503
Household products (2.2%)
Henkel AG & Co. KGaA (Germany) 55,598 3,864,464
Reckitt Benckiser Group PLC (United Kingdom) 101,966 5,636,061
9,500,525
Independent power producers and energy traders (1.1%)
China Resources Power Holdings Co., Ltd. (China) 1,112,000 2,173,209
China WindPower Group, Ltd. (China)(NON) 15,030,000 1,316,310
Electric Power Development Co. (Japan) 44,900 1,213,264
4,702,783
Industrial conglomerates (2.4%)
Cookson Group PLC (United Kingdom) 189,702 2,049,869
Rheinmetall AG (Germany) 29,953 2,655,172
Siemens AG (Germany) 42,610 5,859,062
10,564,103
Insurance (3.3%)
AIA Group, Ltd. (Hong Kong)(NON) 368,600 1,282,820
AXA SA (France) 222,798 5,069,287
Ping An Insurance (Group) Co. of China, Ltd. (China) 328,000 3,420,407
Prudential PLC (United Kingdom) 414,533 4,795,716
14,568,230
Internet and catalog retail (0.5%)
Rakuten, Inc. (Japan) 2,039 2,114,175
2,114,175
Internet software and services (1.5%)
Baidu, Inc. ADR (China)(NON) 9,800 1,373,274
DeNA Co., Ltd. (Japan) 95,400 4,116,118
Open Text Corp. (Canada)(NON)(S) 21,100 1,350,822
6,840,214
Machinery (3.7%)
Asahi Diamond Industrial Co., Ltd. (Japan) 204,000 4,466,249
Invensys PLC (United Kingdom) 334,618 1,730,741
Metso Corp. OYJ (Finland) 39,810 2,264,187
Tata Motors, Ltd. (India) 62,697 1,404,235
Vallourec SA (France)(NON) 29,527 3,600,920
Volvo AB Class B (Sweden) 173,939 3,043,805
16,510,137
Media (1.0%)
Kabel Deutschland Holding AG (Germany)(NON) 25,800 1,588,372
WPP PLC (Ireland) 235,972 2,957,447
4,545,819
Metals and mining (6.5%)
BHP Billiton, Ltd. (Australia) 37,422 1,769,511
First Quantum Minerals, Ltd. (Canada) 25,200 3,677,675
Fortescue Metals Group, Ltd. (Australia) 365,808 2,510,299
Hidili Industry International Development, Ltd. (China) 2,189,000 1,908,430
Rio Tinto, Ltd. (Australia) 148,518 13,284,637
Vedanta Resources PLC (United Kingdom) 44,552 1,499,014
Xstrata PLC (United Kingdom) 185,413 4,085,995
28,735,561
Multiline retail (1.2%)
Myer Holdings, Ltd. (Australia) 600,524 1,704,025
PPR SA (France) 19,764 3,524,032
5,228,057
Multi-utilities (0.6%)
Centrica PLC (United Kingdom) 500,805 2,601,574
2,601,574
Oil, gas, and consumable fuels (7.1%)
BG Group PLC (United Kingdom) 467,280 10,616,673
Cairn Energy PLC (United Kingdom)(NON) 126,791 845,063
Canadian Natural Resources, Ltd. (Canada) 76,500 3,209,896
Gazprom OAO ADR (Russia) 185,200 2,694,660
Inpex Corp. (Japan) 807 5,960,455
Petroleo Brasileiro SA ADR (Preference) (Brazil)(S) 80,500 2,469,740
Tullow Oil PLC (United Kingdom) 273,039 5,440,116
31,236,603
Pharmaceuticals (4.9%)
Astellas Pharma, Inc. (Japan) 161,300 6,239,733
Mitsubishi Tanabe Pharma (Japan) 259,600 4,357,522
Nippon Shinyaku Co., Ltd. (Japan) 177,000 2,263,390
Sanofi (France) 30,807 2,479,929
Sanofi CVR (France)(NON) 972,700 2,344,207
Teva Pharmaceutical Industries, Ltd. ADR (Israel) 83,700 4,036,014
21,720,795
Road and rail (0.4%)
Hitachi Transport System, Ltd. (Japan) 106,500 1,821,927
1,821,927
Semiconductors and semiconductor equipment (2.1%)
ASML Holding NV (Netherlands) 53,288 1,965,304
Elpida Memory, Inc. (Japan)(NON) 77,500 912,778
First Solar, Inc.(NON)(S) 27,502 3,637,690
Samsung Electronics Co., Ltd. (South Korea) 3,585 2,786,403
9,302,175
Software (0.8%)
Longtop Financial Technologies Ltd. ADR (Hong Kong)(F)(NON)(S) 146,261 438,783
SAP AG (Germany) 48,447 2,936,906
3,375,689
Specialty retail (1.1%)
GOME Electrical Appliances Holdings, Ltd. (China) 5,588,000 2,238,982
Kingfisher PLC (United Kingdom) 569,936 2,446,946
4,685,928
Textiles, apparel, and luxury goods (1.9%)
Christian Dior SA (France) 40,996 6,458,592
Pandora A/S (Denmark)(S) 65,687 2,066,405
8,524,997
Tobacco (2.4%)
British American Tobacco (BAT) PLC (United Kingdom) 132,990 5,835,828
Imperial Tobacco Group PLC (United Kingdom) 56,193 1,869,925
Japan Tobacco, Inc. (Japan) 694 2,679,470
10,385,223
Trading companies and distributors (1.7%)
Mitsui & Co., Ltd. (Japan) 323,700 5,600,210
Wolseley PLC (Switzerland) 53,911 1,760,204
7,360,414
Wireless telecommunication services (1.1%)
NTT DoCoMo, Inc. (Japan) 2,106 3,758,618
Vodafone Group PLC (United Kingdom) 392,243 1,041,811
4,800,429
Total common stocks (cost $402,894,460) $433,192,343

U.S. TREASURY OBLIGATIONS (—%)(a,i)
Principal amount Value
U.S. Treasury Notes 3 5/8s, February 15, 2020 $147,000 $156,733
Total U.S. treasury obligations (cost $156,733) $156,733

SHORT-TERM INVESTMENTS (4.1%)(a)
Principal amount/shares Value
Putnam Cash Collateral Pool, LLC 0.17%(d) 9,491,134 $9,491,134
Putnam Money Market Liquidity Fund 0.04%(e) 6,659,646 6,659,646
U.S. Treasury Bills with effective yields ranging from 0.12% to 0.16%, November 17, 2011(SEGSF) $1,990,000 1,989,270
Total short-term investments (cost $18,139,659) $18,140,050

TOTAL INVESTMENTS
Total investments (cost $421,190,852)(b) $451,489,126













FORWARD CURRENCY CONTRACTS at 6/30/11 (aggregate face value $321,188,323) (Unaudited)


Unrealized
Contract Delivery Aggregate appreciation/
Counterparty Currency type date Value face value (depreciation)
Bank of America, N.A.
Australian Dollar Sell 8/17/11 $9,014,417 $8,791,971 $(222,446)
British Pound Buy 8/17/11 3,840,817 3,820,860 19,957
Canadian Dollar Sell 8/17/11 5,615,505 5,485,089 (130,416)
Euro Buy 8/17/11 9,560,331 9,367,666 192,665
Norwegian Krone Sell 8/17/11 871,595 858,648 (12,947)
Swedish Krona Buy 8/17/11 262,307 257,130 5,177
Swiss Franc Buy 8/17/11 1,145,452 1,149,973 (4,521)
Barclays Bank PLC
Australian Dollar Buy 8/17/11 1,222,735 1,192,700 30,035
British Pound Sell 8/17/11 9,463,533 9,409,648 (53,885)
Canadian Dollar Buy 8/17/11 3,847,856 3,758,151 89,705
Euro Sell 8/17/11 6,492,272 6,368,130 (124,142)
Hong Kong Dollar Buy 8/17/11 465,062 464,824 238
Japanese Yen Buy 8/17/11 4,710,170 4,684,616 25,554
Norwegian Krone Buy 8/17/11 36,191 35,648 543
Swedish Krona Buy 8/17/11 191,115 187,184 3,931
Swiss Franc Sell 8/17/11 4,901,204 4,920,876 19,672
Citibank, N.A.
Australian Dollar Buy 8/17/11 836,389 815,632 20,757
British Pound Buy 8/17/11 7,641,004 7,602,968 38,036
Canadian Dollar Sell 8/17/11 1,688,964 1,649,355 (39,609)
Danish Krone Buy 7/21/11 5,588,543 5,625,078 (36,535)
Euro Sell 8/17/11 7,464,736 7,322,873 (141,863)
Hong Kong Dollar Sell 8/17/11 3,700,614 3,698,198 (2,416)
Norwegian Krone Buy 8/17/11 339,447 334,505 4,942
Singapore Dollar Buy 8/17/11 3,624,141 3,624,141 —
Swedish Krona Buy 8/17/11 553,679 543,149 10,530
Swiss Franc Buy 8/17/11 2,388,639 2,398,513 (9,874)
Credit Suisse AG
Australian Dollar Sell 8/17/11 244,974 238,694 (6,280)
British Pound Buy 8/17/11 5,792,299 5,762,275 30,024
Canadian Dollar Buy 8/17/11 5,785,417 5,645,396 140,021
Euro Sell 8/17/11 6,620,610 6,496,204 (124,406)
Japanese Yen Buy 8/17/11 8,531,772 8,488,700 43,072
Norwegian Krone Buy 8/17/11 1,023,955 1,008,965 14,990
Swedish Krona Buy 8/17/11 2,188,623 2,144,929 43,694
Swiss Franc Buy 8/17/11 3,288,144 3,299,074 (10,930)
Deutsche Bank AG
Australian Dollar Buy 8/17/11 2,705,275 2,630,657 74,618
Canadian Dollar Buy 8/17/11 2,720,049 2,654,674 65,375
Euro Buy 8/17/11 2,942,187 2,886,617 55,570
Swedish Krona Buy 8/17/11 1,497,155 1,467,425 29,730
Swiss Franc Buy 8/17/11 2,194,477 2,202,495 (8,018)
Goldman Sachs International
Australian Dollar Buy 8/17/11 1,337,220 1,304,103 33,117
British Pound Buy 8/17/11 2,286,311 2,275,030 11,281
Euro Sell 8/17/11 17,257,959 16,934,029 (323,930)
Japanese Yen Sell 8/17/11 8,586,927 8,541,397 (45,530)
Norwegian Krone Buy 8/17/11 2,350,870 2,315,272 35,598
Swedish Krona Buy 8/17/11 375,943 368,438 7,505
HSBC Bank USA, National Association
Australian Dollar Buy 8/17/11 3,610,376 3,524,465 85,911
British Pound Sell 8/17/11 2,746,561 2,731,264 (15,297)
Euro Sell 8/17/11 136,168 133,639 (2,529)
Hong Kong Dollar Sell 8/17/11 2,513,015 2,511,762 (1,253)
Norwegian Krone Buy 8/17/11 1,899,497 1,874,274 25,223
Swiss Franc Buy 8/17/11 3,943,725 3,959,293 (15,568)
JPMorgan Chase Bank, N.A.
Australian Dollar Buy 8/17/11 1,059,277 1,033,078 26,199
British Pound Buy 8/17/11 10,764,307 10,708,277 56,030
Canadian Dollar Sell 8/17/11 8,645,314 8,441,970 (203,344)
Euro Buy 8/17/11 5,037,638 4,943,082 94,556
Hong Kong Dollar Sell 8/17/11 3,039,608 3,037,636 (1,972)
Japanese Yen Buy 8/17/11 697,271 693,454 3,817
Norwegian Krone Sell 8/17/11 1,786,070 1,759,956 (26,114)
Singapore Dollar Buy 8/17/11 1,167,610 1,166,511 1,099
Swedish Krona Buy 8/17/11 1,825,158 1,789,025 36,133
Swiss Franc Buy 8/17/11 3,267,906 3,279,533 (11,627)
Royal Bank of Scotland PLC (The)
Australian Dollar Sell 8/17/11 4,510,889 4,388,160 (122,729)
British Pound Buy 8/17/11 371,764 369,722 2,042
Canadian Dollar Buy 8/17/11 875,790 854,524 21,266
Euro Sell 8/17/11 11,152,439 10,946,723 (205,716)
Japanese Yen Sell 8/17/11 2,823,530 2,807,031 (16,499)
Swedish Krona Sell 8/17/11 293,473 287,549 (5,924)
Swiss Franc Buy 8/17/11 2,305,903 2,315,047 (9,144)
State Street Bank and Trust Co.
Australian Dollar Buy 8/17/11 2,640,297 2,574,990 65,307
Canadian Dollar Buy 8/17/11 7,158,504 6,991,319 167,185
Euro Sell 8/17/11 5,137,262 5,039,774 (97,488)
Norwegian Krone Sell 8/17/11 1,518,152 1,495,295 (22,857)
Swedish Krona Buy 8/17/11 1,941,590 1,903,648 37,942
UBS AG
Australian Dollar Sell 8/17/11 2,311,567 2,254,612 (56,955)
British Pound Sell 8/17/11 11,986,232 11,919,102 (67,130)
Canadian Dollar Sell 8/17/11 7,995,418 7,810,522 (184,896)
Euro Buy 8/17/11 18,706,648 18,362,234 344,414
Israeli Shekel Sell 7/21/11 408,458 412,536 4,078
Norwegian Krone Buy 8/17/11 1,040,855 1,025,581 15,274
Swedish Krona Buy 8/17/11 1,336,447 1,309,909 26,538
Swiss Franc Buy 8/17/11 1,756,748 1,763,820 (7,072)
Westpac Banking Corp.
Australian Dollar Buy 8/17/11 256,390 249,799 6,591
British Pound Sell 8/17/11 625,175 622,094 (3,081)
Canadian Dollar Sell 8/17/11 1,648,015 1,609,529 (38,486)
Euro Buy 8/17/11 1,344,569 1,319,355 25,214
Japanese Yen Sell 8/17/11 9,987,936 9,936,329 (51,607)
Total $(373,880)












TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 6/30/11 (Unaudited)
     Fixed payments Total return
Swap counterparty /      Termination received (paid) by received by Unrealized
Notional amount      date fund per annum or paid by fund appreciation
Goldman Sachs International
baskets 5,865      9/26/11 (1 month USD-LIBOR-BBA plus 60 bp) A basket (GSGLPMIN) of common stocks $81,693
Total $81,693










Key to holding's abbreviations
ADR American Depository Receipts
CVR Contingent Value Rights
GDR Global Depository Receipts
OAO Open Joint Stock Company
OJSC Open Joint Stock Company
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 October 1, 2010 through June 30, 2011 (the reporting period).
(a) Percentages indicated are based on net assets of $441,711,225.
(b) The aggregate identified cost on a tax basis is $421,822,792, resulting in gross unrealized appreciation and depreciation of $46,315,189 and $16,648,855, respectively, or net unrealized appreciation of $29,666,334.
(NON) Non-income-producing security.
(SEGSF) This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivatives contracts at the close of the reporting period.
(FWC) Forward commitment, in part or in entirety.
(d) 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 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 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 $9,281,657. The fund received cash collateral of $9,491,134 which is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Investment Management, LLC (Putnam Management), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged by Putnam Cash Collateral Pool, LLC. The rate quoted in the security description is the annualized 7-day yield at the close fo the reporting period.
(e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $4,461 for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $133,356,591 and $130,847,989, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
(F) Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (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.
(i) Security purchased with cash or security received, that was pledged to the fund for collateral on certain derivatives contracts.
(S) Security on loan, in part or in entirety, at the close of the reporting period.
At the close of the reporting period, the fund maintained liquid assets totaling $1,030,445 to cover certain derivatives contracts.
Debt obligations are considered secured unless otherwise indicated.
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.
ADR or GDR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank.
DIVERSIFICATION BY COUNTRY
Distribution of investments by country of risk at the close of the reporting period (as a percentage of Portfolio Value):
United Kingdom 17.8 %
Japan 17.4
France 12.0
Germany 8.7
China 7.0
Australia 5.4
Switzerland 4.5
United States 3.4
Russia 2.9
Belgium 2.7
Brazil 2.3
Ireland 2.2
Canada 1.9
South Korea 1.6
Sweden 1.5
Taiwan 1.3
Finland 1.1
Netherlands 1.0
Italy 1.0
Israel 0.9
Spain 0.6
Singapore 0.5
Denmark 0.5
Other 1.8
Total 100.0%
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. 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 and is generally categorized as a Level 2 security.
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 considers such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.
Many securities markets and exchanges outside the U.S. close prior to the 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 will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. 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. 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.
Forward currency contracts: The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Outstanding contracts on forward currency contracts at the close of the reporting period are indicative of the volume of activity during the reporting period.
Total return swap contracts: The fund enters into 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 a specific commodity. 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. 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 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. Outstanding notional amount on total return swap contracts at the close of the reporting period are indicative of the volume of activity during the reporting period.
Master agreements: The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over the counter 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 $940,476 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $859,742.












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 $48,663,736 $14,898,922 $—
    Consumer staples 52,981,673 4,853,790 5,789
    Energy 30,472,785 5,960,455 —
    Financials 42,902,470 23,617,631 —
    Health care 20,277,311 12,860,645 —
    Industrials 39,081,487 19,893,174 —
    Information technology 17,469,755 25,207,679 438,783
    Materials 23,513,626 31,946,020 —
    Telecommunication services 4,493,385 3,758,618 —
    Utilities 5,191,826 4,702,783 —
Total common stocks 285,048,054 147,699,717 444,572
U.S. Treasury Obligations — 156,733 —
Short-term investments 6,659,646 11,480,404 —
Totals by level $291,707,700 $159,336,854 $444,572



Valuation inputs
Other financial instruments: Level 1 Level 2 Level 3


Forward currency contracts $— $(373,880) $—
Total return swap contracts — 81,693 —
Totals by level $— $(292,187) $—


At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund's portfolio.
Market Values 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 Market value Market value
Foreign exchange contracts $2,091,156 $2,465,036
Equity contracts 81,693 —
Total $2,172,849 $2,465,036


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.

Putnam Investment Funds
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: August 26, 2011

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: August 26, 2011

By (Signature and Title):
/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: August 26, 2011