Putnam
Asia Pacific
Fund II
SEMIANNUAL REPORT ON PORTFOLIO AND PERFORMANCE
2-29-00
[SCALE LOGO OMITTED]
The following report contains a list of your fund's portfolio holdings and
complete financial statements for the six months ended 2/29/00. Additional
details, including fund strategy, performance, and managers' outlook, will
be provided in the annual report, which will cover the 12 months ended
8/31/00.
<TABLE>
<CAPTION>
The fund's portfolio
February 29, 2000 (Unaudited)
COMMON STOCKS (94.5%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C>
Hong Kong (28.8%)
- --------------------------------------------------------------------------------------------------------------------------
15,000 Cheung Kong Holdings $ 199,491
22,000 China Telecom Ltd. (NON) 202,125
5,000 Citic Pacific Ltd. 25,185
70,000 Culturecom Holdings Ltd. (NON) 20,688
58,000 e-New Media Co. Ltd. (NON) 20,495
6,000 Hang Seng Bank Ltd. 54,161
40,400 Hong Kong Telecommunications Ltd. 134,713
20,000 Hutchison Whampoa, Ltd. 313,532
11,000 Johnson Electric Holdings Ltd. 72,440
16,000 Li & Fung Ltd. 62,295
19,000 Pacific Century CyberWorks Ltd. (NON) 54,078
14,000 Sun Hung Kai Properties Ltd. 126,377
--------------
1,285,580
India (17.4%)
- --------------------------------------------------------------------------------------------------------------------------
500 Cipla Ltd. 12,898
900 Global Tele-Systems Ltd. 43,039
1,500 Himachal Futuristic Commun Ltd. 60,382
700 Hindustan Lever Ltd. 46,549
400 Hughes Software Systems (NON) 29,642
2,000 ICICI Ltd. ADR (NON) 74,000
380 Infosys Technologies Ltd. 75,848
1,600 ITC ltd. GDR 36,400
2,600 Mahindra & Mahindra GDR (NON) 33,280
400 Pentamedia Graphics Ltd. GDR 23,700
2,000 Reliance Industries GDS 39,500
500 Satyam Computer Services Ltd. 57,900
500 Satyam Infoway Ltd. ADR 47,375
400 Software Solution 51,906
1,300 Videsh Sanchar Nigam Ltd. GDR 47,775
160 VisualSoft Ltd. 33,020
89 Wipro Corp. Ltd. 10,694
1,800 Zee Telefilms Ltd. (NON) 53,957
--------------
777,865
Indonesia (0.4%)
- --------------------------------------------------------------------------------------------------------------------------
40,000 PT Astra International Inc. 19,865
Malaysia (4.3%)
- --------------------------------------------------------------------------------------------------------------------------
9,000 Commerce Asset-Holding Berhad 28,184
23,000 Malaysian Resources Corp. 28,447
26,000 Public Bank Berhad 28,737
7,000 Resorts World Berhad 25,421
8,000 Tanjong PLC 20,105
4,000 Telekom Malaysia 16,947
4,000 Tenaga Nasional Berhad 13,263
3,000 Unisem Berhad 28,421
--------------
189,525
Singapore (7.5%)
- --------------------------------------------------------------------------------------------------------------------------
4,000 City Developments Ltd. 16,243
3,000 Datacraft Asia Ltd. 25,350
5,815 DBS Group Holdings Ltd. 71,853
8,000 JIT Holdings Ltd. 25,757
6,250 Oversea-Chinese Banking Corp. Ltd. 39,520
4,000 Singapore Airlines 37,127
1,600 Singapore Press Holdings Ltd. 30,630
4,801 United Overseas Bank Ltd. 30,358
4,000 Venture Manufacturing Ltd. 60,100
--------------
336,938
South Korea (19.0%)
- --------------------------------------------------------------------------------------------------------------------------
275 Cheil Communications, Inc. 34,773
100 Daum Communications Corp. (NON) 16,270
140 Digital Chosun Co. Ltd. 32,806
400 Dreamline Corp. 52,878
900 Hannsoft Inc. (NON) 32,311
70 Housing & Commercial Bank 1,247
2,100 Kookmin Bank 144A 23,397
2,000 Korea Electric Power Corp. 50,049
1,800 LG Investment and Securities 32,151
200 Locus Corp. (NON) 42,356
500 Opicom Co. Ltd. (NON) 37,492
210 Pohang Iron & Steel Company, Ltd. 22,775
350 Samsung Electronics 144A GDR 46,550
640 Samsung Electronics Co. 144,876
650 Samsung Securities Co. Ltd. 19,887
400 Sansung Electro-Mechanics Co. 24,264
230 Serome Technology, Inc. 29,083
2,100 Shinhan Bank 20,055
3,424 SK Telecom Co., Ltd. ADR 153,866
2,400 Will-Bes & Co. (The) 29,393
--------------
846,479
Taiwan (14.3%)
- --------------------------------------------------------------------------------------------------------------------------
1,750 Acer Inc. 23,800
5,535 Advanced Semiconductor Engineering Inc. 18,522
3,003 Asustek Computer, Inc. GDR 37,550
21,000 Bank Sinopac 14,466
683 China Steel Corp. GDR 144A 10,920
16,080 Chinatrust Commercial Bank 17,324
10,000 Far Eastern Textile Ltd. 21,874
9,000 Formosa Plastics Corp. 19,834
500 GigaMedia Ltd. (NON) 35,031
6,200 Hon Hai Precision Industry 57,891
12,000 K Laser Technology, Inc. 35,651
6,900 President Chain Store Corp. 30,186
3,000 Synnex Technology Intl. Corp. 21,058
17,700 Taishin Intl. Bank 11,904
26,600 Taiwan Semiconductor Manufacturing Co. 174,554
24,400 United Microelectronics Corp. 89,618
16,000 United World Chinese Commercial Bank Corp. 20,268
--------------
640,451
Thailand (2.8%)
- --------------------------------------------------------------------------------------------------------------------------
1,300 Advanced Info Service Public Co., Ltd. (NON) 20,210
2,500 Bec World Public Co. Ltd. 18,776
28,300 Big C Supercenter PLC (NON) 11,891
2,000 Shin Corp. PLC (NON) 15,863
950 Siam Cement Public Company Ltd. (The) (NON) 17,164
3,500 Siam City Cement Co. Ltd. 11,765
14,000 TelecomAsia Corporation Public Co. Ltd. (NON) 19,485
12,000 Thai Farmers Bank Public Co. (NON) 11,345
--------------
126,499
--------------
Total Common Stocks (cost $2,613,815) $ 4,223,202
CONVERTIBLE PREFERRED STOCKS (0.2%) (a) (cost $12,215)
NUMBER OF SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------
15,800 Siam Commercial Bank Public Co. Ltd. 144A
$5.25 cv. pfd. $ 9,543
UNITS (0.7%) (a) (cost $44,789)
NUMBER OF UNITS VALUE
- --------------------------------------------------------------------------------------------------------------------------
200 Wipro Ltd. Structured Note (Issued by Goldman
Sachs Group Inc.) zero %, 2001 (India) $ 30,248
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $2,670,819) (b) $ 4,262,993
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $4,469,977.
(b) The aggregate identified cost on a tax basis is $2,714,613, resulting in gross unrealized appreciation and
depreciation of $1,671,558 and $123,178, respectively, or net unrealized appreciation of $1,548,380.
(NON) Non-income-producing security.
144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from registration, normally to qualified
institutional buyers.
ADR, GDR or GDS after the name of a foreign holding stands for American Depositary Receipts, Global Depositary
Receipts and Global Depositary Shares, respectively, representing ownership of foreign securities on deposit with a
domestic custodian bank.
The fund had the following industry group concentrations greater than 10% at February 29, 2000 (as a percentage of
net assets):
Electronics and electrical equipment 15.1%
Computer services and software 12.8
Insurance and finance 12.3
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
February 29, 2000 (Unaudited)
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $2,670,819) (Note 1) $4,262,993
- -----------------------------------------------------------------------------------------------
Cash 147,482
- -----------------------------------------------------------------------------------------------
Foreign currency (cost $91,903) 92,100
- -----------------------------------------------------------------------------------------------
Dividends receivable 1,077
- -----------------------------------------------------------------------------------------------
Receivable for securities sold 202,388
- -----------------------------------------------------------------------------------------------
Total assets 4,706,040
Liabilities
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 180,499
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 3,765
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 899
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 679
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 7
- -----------------------------------------------------------------------------------------------
Other accrued expenses 50,214
- -----------------------------------------------------------------------------------------------
Total liabilities 236,063
- -----------------------------------------------------------------------------------------------
Net assets $4,469,977
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $2,705,974
- -----------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (21,177)
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions (Note 1) 220,572
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and assets
and liabilities in foreign currencies 1,564,608
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $4,469,977
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($4,469,977 divided by 306,104 shares) $14.60
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $14.60) $15.49
- -----------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group
sales, the offering price is reduced
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended February 29, 2000 (Unaudited)
<S> <C>
Investment income:
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $1,141) $15,588
- -----------------------------------------------------------------------------------------------
Interest 61
- -----------------------------------------------------------------------------------------------
Total investment income 15,649
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 18,011
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 2,792
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 1,159
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 20
- -----------------------------------------------------------------------------------------------
Reports to shareholders 3,029
- -----------------------------------------------------------------------------------------------
Auditing 17,095
- -----------------------------------------------------------------------------------------------
Legal 2,157
- -----------------------------------------------------------------------------------------------
Postage 32
- -----------------------------------------------------------------------------------------------
Other 20
- -----------------------------------------------------------------------------------------------
Fees waived and reimbursed by Manager (Note 2) (14,598)
- -----------------------------------------------------------------------------------------------
Total expenses 29,717
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (302)
- -----------------------------------------------------------------------------------------------
Net expenses 29,415
- -----------------------------------------------------------------------------------------------
Net investment loss (13,766)
- -----------------------------------------------------------------------------------------------
Net realized gain on investments (net of foreign tax of $14,202)
(Notes 1 and 3) 435,013
- -----------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (5,082)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the period (Note 1) 774
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period
(net of deferred foreign tax of $28,058) 636,437
- -----------------------------------------------------------------------------------------------
Net gain on investments 1,067,142
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $1,053,376
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
February 29 August 31
2000* 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (13,766) $ 7,964
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 429,931 289,780
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 637,211 1,264,778
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,053,376 1,562,522
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income -- (7,964)
- ---------------------------------------------------------------------------------------------------------------
In excess of net investment income -- (15,394)
- ---------------------------------------------------------------------------------------------------------------
From return of capital -- (4,667)
- ---------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 287,107 264,290
- ---------------------------------------------------------------------------------------------------------------
Total increase in net assets 1,340,483 1,798,787
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 3,129,494 1,330,707
- ---------------------------------------------------------------------------------------------------------------
End of period (including accumulated net investment loss
and distributions in excess of net investment income of
$21,177 and $7,411, respectively) $4,469,977 $3,129,494
- ---------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
- -------------------------------------------------------------------------------------------------------------------------------
Six months
ended Year For the period
Per-share February 29 ended March 23, 1998+
operating performance (Unaudited) August 31 to August 31
- -------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $10.90 $5.23 $8.50
- -------------------------------------------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)(a)(b) (.05) .03 .06
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 3.75 5.75 (3.33)
- -------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations 3.70 5.78 (3.27)
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income -- (.03) --
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- (.06) --
- -------------------------------------------------------------------------------------------------------------------------------
From return of capital -- (.02) --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (.11) --
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $14.60 $10.90 $5.23
- -------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(c) 33.95* 111.52 (38.47)*
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $4,470 $3,129 $1,331
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b)(d) .82* 1.65 .73*
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(b) (.38)* .35 .99*
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 142.94* 234.28 202.60*
- -------------------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during
the period.
(b) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses for the fund reflect a
reduction of $.05, $.12 and $.07 per share for the periods ended February 29, 2000, August 31, 1999 and August 31, 1998,
respectively (Note 2).
(c) Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
(d) Includes amounts paid through expense offset arrangements (Note 2).
</TABLE>
Notes to financial statements
February 29, 2000 (Unaudited)
Note 1
Significant accounting policies
Putnam Asia Pacific Fund II (the "fund") is a series of Putnam Funds Trust
(the "trust") which is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment
company. The fund seeks long term capital appreciation by investing
primarily in common stocks and other securities of companies located in
Asia other than Japan.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period.
Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sales price on its principal exchange, or if no sales are
reported -- as in the case of some securities traded over-the-counter --
the last reported bid price. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which
approximates market value. Other investments, including restricted
securities, are stated at fair value following procedures approved by the
Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Investment Management, Inc. ("Putnam Management"), the fund's
manager, a wholly-owned subsidiary of Putnam Investments, Inc. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the market
value of which at the time of purchase is required to be in an amount at
least equal to the resale price, including accrued interest. Collateral
for certain tri-party repurchase agreements is held at the counterparty's
custodian in a segregated account for the benefit of the fund and the
counterparty. Putnam Management is responsible for determining that the
value of these underlying securities is at all times at least equal to the
resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date except that
certain dividends from foreign securities are recorded as soon as the fund
is informed of the ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The fund
does not isolate that portion of realized or unrealized gains or losses
resulting from changes in the foreign exchange rate on investments from
fluctuations arising from changes in the market prices of the securities.
Such gains and losses are included with the net realized and unrealized
gain or loss on investments. Net realized gains and losses on foreign
currency transactions represent net realized exchange gains or losses on
closed forward currency contracts, disposition of foreign currencies and
the difference between the amount of investment income and foreign
withholding taxes recorded on the fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized appreciation
and depreciation of assets and liabilities in foreign currencies arise
from changes in the value of open forward currency contracts and assets
and liabilities other than investments at the period end, resulting from
changes in the exchange rate. Investments in foreign securities involve
certain risks, including those related to economic instability,
unfavorable political developments, and currency fluctuations, not present
with domestic investments.
F) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies. It is also the intention of the fund to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the
Internal Revenue Code of 1986, as amended. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held nor for excise tax on income and capital
gains.
The fund may be subject to taxes imposed by countries in which it invests.
Such taxes are generally based on either income or gains earned or
repatriated. The fund accrues and applies such taxes to net investment
income, net realized gains and net unrealized gains as income and/or
capital gains earned.
At August 31, 1999, the fund had a capital loss carryover of approximately
$142,000 available to offset future net capital gain, if any, which will
expire on August 31, 2007.
G) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid at least annually. The amount and character of income and gains
to be distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles.
Reclassifications are made to the fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
H) Expenses of the trust Expenses directly charged or attributable to any
fund will be paid from the assets of that fund. Generally, expenses of the
trust will be allocated among and charged to the assets of each fund on a
basis that the Trustees deem fair and equitable, which may be based on the
relative assets of each fund or the nature of the services performed and
relative applicability to each fund.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund.
Such fee is based on the following annual rates: 1.00% of the first $500
million of average net assets, 0.90% of the next $500 million, 0.85% of
the next $500 million, 0.80% of the next $5 billion, 0.775% of the next $5
billion, 0.755% of the next $5 billion, 0.74% of the next $5 billion, and
0.73% thereafter.
Putnam Management has agreed to limit its compensation (and, to the extent
necessary, bear other expenses) through August 31, 2000, to the extent
that expenses of the fund (exclusive of brokerage commissions, interest,
taxes, deferred organizational and extraordinary expense, credits from
Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments,
Inc. and payments under the Trust's distribution plan) would exceed an
annual rate of 1.65% of the fund's average net assets.
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The aggregate
amount of all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by PFTC. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended February 29, 2000, fund expenses were reduced by
$302 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the
Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered
into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $100 has
been allocated to the fund, and an additional fee for each Trustees
meeting attended. Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
invested in certain Putnam funds until distribution in accordance with the
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and meeting
fees for the three years preceding retirement. Pension expense for the
fund is included in Compensation of Trustees in the Statement of
operations. Accrued pension liability is included in Payable for
compensation of Trustees in the Statement of assets and liabilities.
The fund has adopted a distribution plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. The purpose of the Plan is
to compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of
Putnam Investments, Inc., for services provided and expenses incurred by
it in distributing shares of the fund. The Plan provides for payment by
the fund to Putnam Mutual Funds Corp. at an annual rate of up to 0.35% of
the fund's average net assets. The fund is not currently making any
payments pursuant to the plan.
For the six months ended February 29, 2000, Putnam Mutual Funds Corp.,
acting as underwriter received no net commissions of from the sale of
shares of the fund. A deferred sales charge of up to 1% is assessed on
certain redemptions of shares. For the six months ended February 29, 2000,
Putnam Mutual Funds Corp., acting as underwriter received no monies on
redemptions.
Note 3
Purchases and sales of securities
During the six months ended February 29, 2000, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $5,124,903 and $5,046,971, respectively. There were
no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At February 29, 2000 there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended February 29, 2000
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 42,901 $590,103
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- -----------------------------------------------------------------------------
42,901 590,103
Shares
repurchased (23,907) (302,996)
- -----------------------------------------------------------------------------
Net increase 18,994 $287,107
- -----------------------------------------------------------------------------
Year ended August 31, 1999
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 43,710 $359,791
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,792 28,025
- -----------------------------------------------------------------------------
47,502 387,816
Shares
repurchased (15,071) (123,526)
- -----------------------------------------------------------------------------
Net increase 32,431 $264,290
- -----------------------------------------------------------------------------
At February 29, 2000, Putnam Investments, Inc. owned 264,222 shares of the
fund (86.3% of shares outstanding), valued at $3,857,641.
Fund information
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Justin Scott
Vice President
Paul Warren
Vice President and Fund Manager
Carmel Peters
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam Asia Pacific
II Fund. It may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details of sales
charges, investment objectives, and operating policies of the fund, and
the most recent copy of Putnam's Quarterly Performance Summary. For more
information or to request a prospectus, call toll free: 1-800-225-1581.
You can also learn more at Putnam Investments' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any
other agency; and involve risk, including the possible loss of the
principal amount invested.
21B 59720 4/00
