N-Q 1 a_growthopps.htm PUTNAM INVESTMENT FUNDS a_growthopps.htm

Washington, D.C. 20549



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: 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: July 31, 2014
Date of reporting period: April 30, 2014

Item 1. Schedule of Investments:

Putnam Growth Opportunities Fund

The fund's portfolio
4/30/14 (Unaudited)
COMMON STOCKS (98.9%)(a)
Shares Value

Aerospace and defense (5.0%)
General Dynamics Corp. 31,900 $3,491,455
Honeywell International, Inc. 99,900 9,280,710
United Technologies Corp. 81,700 9,667,561

Airlines (1.7%)
American Airlines Group, Inc.(NON) 29,900 1,048,593
Delta Air Lines, Inc. 103,400 3,808,222
Spirit Airlines, Inc.(NON) 48,200 2,739,688

Auto components (0.9%)
Dana Holding Corp. 60,600 1,282,902
Hota Industrial Manufacturing Co., Ltd. (Taiwan) 277,000 442,450
TRW Automotive Holdings Corp.(NON) 30,100 2,418,535

Automobiles (0.3%)
Tesla Motors, Inc.(NON)(S) 6,400 1,330,496

Banks (0.4%)
Bank of America Corp. 111,400 1,686,596

Beverages (2.2%)
Brown-Forman Corp. Class B 15,500 1,390,660
Coca-Cola Enterprises, Inc. 33,700 1,531,328
Monster Beverage Corp.(NON) 28,300 1,894,968
PepsiCo, Inc. 47,000 4,036,830
Remy Cointreau SA (France)(S) 10,225 899,751

Biotechnology (7.4%)
Alkermes PLC(NON) 40,200 1,859,652
Biogen Idec, Inc.(NON) 14,700 4,220,664
Celgene Corp.(NON) 44,093 6,482,112
Cubist Pharmaceuticals, Inc.(NON) 47,000 3,292,820
Gilead Sciences, Inc.(NON) 173,826 13,643,603
InterMune, Inc.(NON) 40,458 1,297,893
Merrimack Pharmaceuticals, Inc.(NON)(S) 85,200 374,028
Neuralstem, Inc.(NON) 209,340 753,624
Vertex Pharmaceuticals, Inc.(NON) 20,104 1,361,041

Capital markets (1.5%)
Charles Schwab Corp. (The) 195,300 5,185,215
Carlyle Group LP (The) (Partnership shares) 49,918 1,601,369

Chemicals (3.3%)
Axiall Corp. 33,700 1,570,420
Chemtura Corp.(NON) 108,300 2,415,090
Dow Chemical Co. (The) 58,500 2,919,150
Monsanto Co. 59,800 6,619,860
Symrise AG (Germany) 27,888 1,408,773

Commercial services and supplies (1.0%)
KAR Auction Services, Inc. 47,693 1,420,298
Tyco International, Ltd. 72,088 2,948,399

Communications equipment (1.9%)
Finisar Corp.(NON) 32,200 842,030
Juniper Networks, Inc.(NON) 50,600 1,249,314
Oplink Communications, Inc.(NON) 83,900 1,438,046
Qualcomm, Inc. 61,848 4,868,056

Consumer finance (0.7%)
Ally Financial, Inc.(F)(NON) 23,857 576,147
American Express Co. 31,200 2,727,816

Diversified financial services (0.8%)
CBOE Holdings, Inc. 8,200 437,552
CME Group, Inc. 45,300 3,188,667

Electrical equipment (0.6%)
Eaton Corp PLC 36,500 2,651,360

Electronic equipment, instruments, and components (0.8%)
Anixter International, Inc. 19,900 1,949,802
Hollysys Automation Technologies, Ltd. (China)(NON) 78,100 1,672,121

Energy equipment and services (2.4%)
Halliburton Co. 81,000 5,108,670
Schlumberger, Ltd. 53,800 5,463,390

Food and staples retail (2.4%)
Costco Wholesale Corp. 32,100 3,713,328
CVS Caremark Corp. 72,600 5,279,472
Whole Foods Market, Inc.(S) 31,200 1,550,640

Food products (1.1%)
Mead Johnson Nutrition Co. 45,026 3,973,995
S&W Seed Co.(NON)(S) 119,945 880,396

Health-care equipment and supplies (2.9%)
Baxter International, Inc. 43,400 3,159,086
GenMark Diagnostics, Inc.(NON) 121,527 1,087,667
St. Jude Medical, Inc. 56,600 3,592,402
Tornier NV (Netherlands)(NON) 64,864 1,100,742
Zeltiq Aesthetics, Inc.(NON) 30,297 554,132
Zimmer Holdings, Inc. 37,100 3,591,280

Health-care providers and services (0.3%)
Catamaran Corp.(NON) 40,100 1,513,775

Hotels, restaurants, and leisure (3.0%)
Hilton Worldwide Holdings, Inc.(NON) 211,559 4,618,333
Melco Crown Entertainment, Ltd. ADR (Hong Kong) 51,500 1,760,270
Starbucks Corp. 48,800 3,446,256
Wyndham Worldwide Corp. 51,734 3,690,704

Household durables (1.6%)
Panasonic Corp. (Japan) 200,800 2,197,718
PulteGroup, Inc. 115,900 2,131,401
Whirlpool Corp. 17,700 2,714,826

Independent power and renewable electricity producers (0.6%)
Calpine Corp.(NON) 107,532 2,465,709

Industrial conglomerates (0.8%)
Siemens AG (Germany) 27,124 3,575,870

Insurance (1.4%)
American International Group, Inc. 43,200 2,295,216
Hartford Financial Services Group, Inc. (The) 79,600 2,855,252
Prudential PLC (United Kingdom) 51,710 1,189,408

Internet and catalog retail (4.0%)
Amazon.com, Inc.(NON) 19,700 5,991,361
Bigfoot GmbH (acquired 8/2/13, cost $395,677) (Private) (Brazil)(F)(RES)(NON) 18 268,696
Groupon, Inc.(NON) 129,600 905,904
Priceline Group, Inc. (The)(NON) 8,650 10,014,538
Zalando AG (acquired 4/23/14, cost $672,622) (Private) (Germany)(F)(RES)(NON) 30 679,511

Internet software and services (8.2%)
Baidu, Inc. ADR (China)(NON) 13,400 2,061,590
eBay, Inc.(NON) 76,800 3,980,544
Facebook, Inc. Class A(NON) 139,900 8,363,222
Google, Inc. Class A(NON) 20,049 10,723,809
Google, Inc. Class C(NON) 20,449 10,769,670
Yahoo!, Inc.(NON) 36,100 1,297,795

IT Services (3.1%)
Cognizant Technology Solutions Corp. Class A(NON) 35,900 1,719,790
Visa, Inc. Class A(S) 60,800 12,318,688

Leisure products (0.3%)
Sega Sammy Holdings, Inc. (Japan) 55,900 1,124,133

Life sciences tools and services (1.4%)
PerkinElmer, Inc. 44,100 1,850,877
Thermo Fisher Scientific, Inc. 32,040 3,652,560
WuXi pharmaTech Cayman, Inc. ADR (China)(NON) 27,200 924,800

Machinery (0.4%)
Ingersoll-Rand PLC 28,600 1,710,280

Marine (0.4%)
Kirby Corp.(NON) 16,800 1,690,416

Media (4.4%)
CBS Corp. Class B (non-voting shares) 54,500 3,147,920
Comcast Corp. Class A 120,300 6,226,728
DISH Network Corp. Class A(NON) 27,100 1,540,906
Liberty Global PLC Class A (United Kingdom)(NON) 53,000 2,110,460
Liberty Global PLC Ser. C (United Kingdom)(NON) 46,900 1,802,367
Live Nation Entertainment, Inc.(NON) 65,400 1,365,552
Madison Square Garden Co. (The) Class A(NON) 40,631 2,218,453
Twenty-First Century Fox, Inc. 41,300 1,322,426

Metals and mining (0.3%)
Constellium NV Class A (Netherlands)(NON) 50,506 1,541,443

Multiline retail (0.5%)
Dollar General Corp.(NON) 41,568 2,346,098

Oil, gas, and consumable fuels (3.6%)
Cabot Oil & Gas Corp. 42,200 1,657,616
Cheniere Energy, Inc.(NON) 28,800 1,625,760
EOG Resources, Inc. 40,600 3,978,800
Gaztransport Et Technigaz SA (France)(NON) 21,649 1,499,934
Gulfport Energy Corp.(NON) 24,800 1,827,016
Kodiak Oil & Gas Corp.(NON) 223,300 2,838,143
QEP Resources, Inc. 93,300 2,863,377

Paper and forest products (0.5%)
International Paper Co. 45,300 2,113,245

Personal products (0.5%)
Coty, Inc. Class A 128,332 2,059,729

Pharmaceuticals (4.2%)
AbbVie, Inc. 46,000 2,395,680
Actavis PLC(NON) 27,600 5,639,508
Allergan, Inc. 25,800 4,278,672
Astellas Pharma, Inc. (Japan) 152,800 1,699,189
AstraZeneca PLC ADR (United Kingdom) 21,000 1,660,050
Bristol-Myers Squibb Co. 43,400 2,173,906
Jazz Pharmaceuticals PLC(NON) 6,800 917,320

Real estate investment trusts (REITs) (0.9%)
Altisource Residential Corp. (Virgin Islands) 32,369 910,216
American Tower Corp. 36,700 3,065,184

Real estate management and development (0.3%)
RE/MAX Holdings, Inc. Class A 54,670 1,542,787

Road and rail (2.0%)
Genesee & Wyoming, Inc. Class A(NON) 11,700 1,158,417
Union Pacific Corp. 41,100 7,826,673

Semiconductors and semiconductor equipment (2.1%)
Applied Materials, Inc. 41,179 784,872
Freescale Semiconductor, Ltd.(NON)(S) 87,262 1,917,146
Lam Research Corp.(NON) 16,346 941,693
Micron Technology, Inc.(NON) 221,921 5,796,577

Software (5.9%)
Electronic Arts, Inc.(NON) 77,100 2,181,930
Microsoft Corp. 152,100 6,144,840
Oracle Corp. 148,700 6,078,856
Red Hat, Inc.(NON) 65,700 3,196,305
ServiceNow, Inc.(NON) 34,900 1,735,228
Splunk, Inc.(NON) 26,500 1,446,105
SS&C Technologies Holdings, Inc.(NON) 42,758 1,664,141
TiVo, Inc.(NON) 228,700 2,712,382
VMware, Inc. Class A(NON)(S) 15,100 1,396,901

Specialty retail (2.1%)
Gap, Inc. (The) 38,500 1,513,050
Home Depot, Inc. (The) 47,800 3,800,578
TJX Cos., Inc. (The) 67,500 3,927,150

Technology hardware, storage, and peripherals (5.4%)
Apple, Inc. 33,490 19,762,112
SanDisk Corp. 25,159 2,137,760
Western Digital Corp. 26,865 2,367,612

Textiles, apparel, and luxury goods (2.0%)
Michael Kors Holdings, Ltd.(NON) 33,200 3,027,840
NIKE, Inc. Class B 54,700 3,990,365
Tumi Holdings, Inc.(NON) 84,500 1,725,490

Tobacco (1.0%)
Philip Morris International, Inc. 51,600 4,408,188

Wireless telecommunication services (0.4%)
Vodafone Group PLC ADR (United Kingdom) 41,381 1,570,823


Total common stocks (cost $363,066,753) $443,065,308

Expiration date Strike Price Warrants Value

Citigroup, Inc. 1/4/19 $106.10 163,930 $101,637
Neuralstem, Inc. Ser. J (acquired 1/3/14, cost $—)(F)(RES) 1/3/19 3.64 82,533

Total warrants (cost $165,569) $101,637

Principal amount/shares Value

Putnam Cash Collateral Pool, LLC 0.18%(d) shares 15,410,250 $15,410,250
Putnam Short Term Investment Fund 0.06%(AFF) shares 3,273,751 3,273,751
U.S. Treasury Bills with an effective yield of 0.10%, January 8, 2015(SEGSF) $466,000 465,828
U.S. Treasury Bills with effective yields ranging from 0.09% to 0.10%, August 21, 2014 110,000 109,990

Total short-term investments (cost $19,259,641) $19,259,819


Total investments (cost $382,491,963)(b) $462,426,764

FORWARD CURRENCY CONTRACTS at 4/30/14 (aggregate face value $11,406,714) (Unaudited)

Contract Delivery Aggregate appreciation/
Counterparty Currency type date Value face value (depreciation)

Barclays Bank PLC
Japanese Yen Sell 5/21/14 $6,189,270 $6,192,636 $3,366
Euro Sell 6/18/14 5,243,341 5,214,078 (29,263)

Total $(25,897)

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)

Deutsche Bank AG
baskets     34,139 $—      9/15/14 (3 month USD-LIBOR-BBA plus 0.36%) A basket (DBCTP12P) of common stocks $(640,859)

Total $—      $(640,859)

Key to holding's abbreviations
ADR American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank
OTC Over-the-counter
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 August 1, 2013 through April 30, 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 $447,879,934.
(b) The aggregate identified cost on a tax basis is $382,589,678, resulting in gross unrealized appreciation and depreciation of $90,483,180 and $10,646,094, respectively, or net unrealized appreciation of $79,837,086.
(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 $948,207, or 0.2% 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 * $2,617,421 $84,586,566 $83,930,236 $4,147 $3,273,751
* 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.
The fund received cash collateral of $15,410,250, 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 $15,087,541.
(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.
(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 $646,274 to cover certain derivatives contracts.
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.
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 were 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 fair value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in fair value is recorded as an unrealized gain or loss. 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 when the contract matures or by delivery of the currency. 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.
For the fund's average contract amount on forward currency contracts, see the appropriate table at the end of these footnotes.
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 specific 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, 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 $670,122 on open derivative contracts subject to the Master Agreements. Collateral posted by the fund at period end for these agreements totaled $389,805 and may include amounts related to unsettled 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 $80,370,909 $3,764,301 $948,207
    Consumer staples 30,719,534 899,751
    Energy 26,862,706
    Financials 25,495,870 1,765,555
    Health care 71,377,894 1,699,189
    Industrials 49,442,072 3,575,870
    Information technology 123,518,937
    Materials 17,179,208 1,408,773
    Telecommunication services 1,570,823
    Utilities 2,465,709
Total common stocks 429,003,662 13,113,439 948,207
Warrants 101,637
Short-term investments 3,273,751 15,986,068

Totals by level $432,379,050 $29,099,507 $948,207

Valuation inputs

Other financial instruments: Level 1 Level 2 Level 3
Forward currency contracts $— $(25,897) $—
Total return swap contracts (640,859)

Totals by level $— $(666,756) $—

* 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
Foreign exchange contracts $3,366 $29,263
Equity contracts 101,637 640,859

Total $105,003 $670,122

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:
Forward currency contracts (contract amount) $8,200,000
OTC total return swap contracts (notional) $5,900,000
Warrants (number of warrants) 210,000
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.
      Barclays Bank PLC Deutsche Bank AG UBS AG WestPac Banking Corp.   Total
  OTC Total return swap contracts*#    $—  $—  $—  $—    $—
  Forward currency contracts#    3,366    —     —     —    3,366
  Total Assets    $3,366   $—   $—   $—    $3,366
  OTC Total return swap contracts*#    $—  $640,859  $—  $—    $640,859
  Forward currency contracts#      —    —  29,263     —    29,263
  Total Liabilities     $—  $640,859  $29,263   $—    $670,122
  Total Financial and Derivative Net Assets    $3,366  $(640,859)  $(29,263)   $—    $(666,756)
  Total collateral received (pledged)##†     $—  $(389,805)   $—   $—    $(389,805)
  Net amount    $3,366  $(251,054)  $(29,263)     $—    $(276,951)
* 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.

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: June 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: June 26, 2014

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