Prospectus Supplement 44866 7/98
dated July 13, 1998 to:
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Putnam High Yield Trust II (the "fund")
Prospectuses dated December 30, 1997
The first paragraph under the heading "How the fund pursues its
objectives - Options and futures portfolio strategies"
is replaced with the following:
The fund may engage in a variety of transactions involving the
use of options and futures contracts. The fund may purchase and
sell futures contracts in order to hedge against changes in the
values of securities the fund owns or expects to purchase or to
hedge against interest rate changes. For example, if Putnam
Management expected interest rates to increase, the fund might
sell futures contracts on U.S. government securities. If rates
were to increase, the value of the fund's fixed-income securities
would decline, but this decline might be offset in whole or in
part by an increase in the value of the futures contracts. The
fund may also purchase and sell call and put options on futures
contracts or on securities it is permitted to purchase in
addition to or as an alternative to purchasing and selling
futures contracts. The fund may also buy and sell combinations
of put and call options on the same underlying security. The
fund may also engage in futures and options transactions for
nonhedging purposes, such as to substitute for direct investment
or to manage the fund's effective duration. Duration is a
commonly used measure of the longevity of debt instruments.
