LIBERTY FUNDS TRUST II, 497, 2000-04-20

LIBERTY FUNDS TRUST II
497, 2000-04-20

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LIBERTY NEWPORT JAPAN OPPORTUNITIES PROSPECTUS, APRIL 6, 2000

CLASS J AND N SHARES

Advised by Newport Fund Management, Inc.

Class J and N shares are available for purchase only by residents or citizens of
Japan.

Although these securities have been registered with the Securities and Exchange
Commission, the Commission has not approved or disapproved any shares offered in
this prospectus or determined whether this prospectus is accurate or complete.
Any representation to the contrary is a Any representation to the contrary is is
a criminal offense.

<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
THE FUND 2
- --------------------------------------------------------------------------------

Investment Goal ........................................................ 2

Primary Investment Strategies .......................................... 2

Primary Investment Risks ............................................... 2

Performance History .................................................... 3

Your Expenses .......................................................... 4

YOUR ACCOUNT 5
- --------------------------------------------------------------------------------

How to Buy Shares ...................................................... 5

Sales Charges .......................................................... 5

How to Sell Shares ..................................................... 7

Distribution and Service Fees .......................................... 7

Other Information About Your Account ................................... 8

MANAGING THE FUND 11
- --------------------------------------------------------------------------------

Investment Advisor ..................................................... 11

Portfolio Manager ...................................................... 11

FINANCIAL HIGHLIGHTS 12
- --------------------------------------------------------------------------------
</TABLE>

-----------------------------
| Not FDIC | May Lose Value |
| -----------------
| Insured |No Bank Guarantee|
-----------------------------

<PAGE>
THE FUND

INVESTMENT GOAL

The Fund seeks capital appreciation.

PRIMARY INVESTMENT STRATEGIES

Under normal market conditions, the Fund invests substantially all of its assets
in stocks of companies whose principle activities are in Japan. The Fund's
investment advisor will determine where a company's principal activities are
located by considering its country of organization, the principal trading market
for its stocks and the source of its revenues and location of its assets. The
Fund invests in stocks of well-established companies with histories of
consistent earnings growth in industries with attractive or improving prospects.

At times, the advisor may determine that adverse market conditions make it
desirable to temporarily suspend the Fund's normal investment activities. During
such times, the Fund may, but is not required to, invest in cash or
high-quality, short-term debt securities, without limit. Taking a temporary
defensive position may prevent the Fund from achieving its investment goal.

In seeking to achieve its goal, the Fund may invest in various types of
securities and engage in various investment techniques which are not the
principal focus of the Fund and therefore are not described in this prospectus.
These types of securities and investment practices are identified and discussed
in the Fund's Statement of Additional Information, which you may obtain free of
charge (see back cover). Approval by the Fund's shareholders is not required to
modify or change the Fund's investment goal or investment strategies.

PRIMARY INVESTMENT RISKS

The primary risks of investing in the Fund are described below. There are many
circumstances (including additional risks that are not described here) which
could prevent the Fund from achieving its goal. It is possible to lose money by
investing in the Fund.

Market risk is the risk that the price of a security held by the Fund will fall
due to changing market, economic or political conditions.

Foreign securities are subject to special risks. Foreign stock markets can be
extremely volatile. Fluctuations in currency exchange rates may impact the value
of foreign securities without a change in the intrinsic value of those
securities. The liquidity of foreign securities may be more limited than
domestic securities, which means that the Fund may, at times, be unable to sell
foreign securities at desirable prices. Brokerage commissions, custodial fees
and other fees are generally higher for foreign investments. In addition,
foreign governments may impose withholding taxes which would reduce the amount
of income available to distribute to shareholders. Other risks include the
following: possible delays in the settlement of transactions; less publicly
available information about companies; the impact of political, social or
diplomatic events; and possible seizure, expropriation or nationalization of the
company or its assets.

<PAGE>
THE FUND

Because the Fund's investments are concentrated in Japan, the value of the
Fund's shares is susceptible to country concentration risks. The political,
economic and market conditions within Japan and movements in the currency
exchange rates between Japan and the U.S. may cause the value of the Fund's
shares to fluctuate more widely than the value of the shares of a fund that
invests in companies located in a number of different countries. The Fund's
concentration in Japan may also result in greater losses to the Fund than if the
Fund were more geographically diversified.

UNDERSTANDING PERFORMANCE

CALENDAR YEAR TOTAL RETURN shows the Fund's Class A share performance for each
complete calendar year since it commenced operations. It includes the effects of
Fund expenses, but not the effects of sales charges. If sales charges were
included, these returns would be lower.

AVERAGE ANNUAL TOTAL RETURN is a measure of the Fund's performance over the past
one-year and the life of the Fund periods. It includes the effects of Fund
expenses. The table shows each class's returns with sales charges.

The Fund's return is compared to the Morgan Stanley Capital International Japan
Index (MSCI Index), an unmanaged index that tracks the performance of Japanese
stocks. Unlike the Fund, indices are not investments, do not incur fees or
expenses and are not professionally managed. It is not possible to invest
directly in indices. The Fund's return is also compared to the average return of
the funds included in the Lipper Japanese Funds category average (Lipper
Average). This Lipper Average, which is calculated by Lipper, Inc., is composed
of funds with similar investment objectives to the Fund. Sales charges are not
reflected in the Lipper Average.

PERFORMANCE HISTORY

The bar chart below shows changes in the Fund's performance from year to year by
illustrating the Fund's calendar year total returns for its Class A shares. The
performance table following the bar chart shows how the Fund's average annual
returns for Class A shares compare with those of a broad measure of market
performance for 1 year and the life of the Fund. The chart and table are
intended to illustrate some of the risks of investing in the Fund by showing the
changes in the Fund's performance. All returns include the reinvestment of
dividends and distributions. Performance results include the effect of expense
reduction arrangements, if any. If these arrangements were not in place, then
the performance results would have been lower. Any expense reduction
arrangements may be discontinued at any time. As with all mutual funds, past
performance does not predict the Fund's future performance.

CALENDAR YEAR TOTAL RETURNS (CLASS A) (1)

1999...............152.09%
1998............... 16.96%
1997............... -2.98%

The Fund's year-to-date total return through March 31, 2000 was -10.20%.

For period shown in bar chart:
Best quarter: 4th quarter 1999, +35.76%
Worst quarter: 4th quarter 1997, -11.96%

AVERAGE ANNUAL TOTAL RETURNS - FOR PERIODS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
INCEPTION LIFE OF THE
DATE 1 YEAR FUND
<S> <C> <C> <C>
Class A (1)(%) 6/3/96 137.60 29.34
MSCI Index (%) N/A 61.53 2.38(2)
Lipper Average (%) N/A 120.45 14.45(2)
</TABLE>

(1) Because the Class J and Class N shares have not completed a full calendar
year the calendar year total returns and the average annual total returns
are for Class A shares, the oldest existing fund class, which are not
available in this prospectus. The Class J and Class N shares would have had
similar returns for such periods because those shares are invested in the
same portfolio of securities. They differ only to the extent that they do
not have the same expenses or sales charges.

(2) Performance information is from May 31, 1996.

<PAGE>
THE FUND

UNDERSTANDING EXPENSES

SALES CHARGES are paid directly by shareholders to Liberty Funds Distributor,
Inc., the Fund's distributor.

REDEMPTION FEE is imposed on redemptions and exchanges of Fund shares purchased
and held for five business days or less. The redemption fee is paid to the Fund
to help offset additional transaction costs created by short-term "market
timers."

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund. They include
management and administration fees, 12b-1 fees, brokerage costs, and
administrative costs including pricing and custody services.

EXAMPLE EXPENSES help you compare the cost of investing in the Fund to the cost
of investing in other mutual funds. The table does not take into account any
expense reduction arrangements discussed in the footnotes to the Annual Fund
Operating Expenses table. It uses the following hypothetical conditions:

- - $10,000 initial investment

- - 5% total return for each year

- - Fund operating expenses remain the same

- - Assumes reinvestment of all dividends and distributions

YOUR EXPENSES

Expenses are one of several factors to consider before you invest in a mutual
fund. The tables below describe the fees and expenses you may pay when you buy,
hold and sell shares of the Fund.

SHAREHOLDER FEES (3) (PAID DIRECTLY FROM YOUR INVESTMENT)

<TABLE>
<CAPTION>
CLASS J CLASS N
<S> <C> <C>
Maximum sales charge (load) on purchases (%)
(as a percentage of the offering price) 3.00 0.00

Maximum deferred sales charge (load) on
redemptions (%) (as a percentage of the
lesser of purchase price or redemption price) 0.00 3.00

Redemption fee(4)(5) (%) (as a percentage of
amount redeemed, if applicable) 2.00 2.00
</TABLE>

ANNUAL FUND OPERATING EXPENSES (DEDUCTED DIRECTLY FROM FUND ASSETS)

<TABLE>
<CAPTION>
CLASS J CLASS N
<S> <C> <C>
Management and administration fees (6) (%) 1.20 1.20

Distribution and service (12b-1) fees (%) 0.50 1.00

Agency fee (7) (%) 0.10 0.10

Other expenses (6) (%) 1.01 1.01

Total annual fund operating expenses (6) (%) 2.81 3.31
</TABLE>

EXAMPLE EXPENSES (YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER)

<TABLE>
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class J $576 $1,145 $1,739 $3,344

Class N: did not sell your
shares $334 $1,018 $1,726 $3,604

sold all your shares at
the end of the period $634 $1,218 $1,726 $3,604
</TABLE>

(3) A $10 annual fee is deducted from accounts of less than $1,000 and paid to
the transfer agent.

(4) There is a $7.50 charge for wiring sale proceeds to your bank.

(5) A 2.00% contingent redemption fee is imposed on redemptions and exchanges of
Fund shares purchased and held for five business days or less.

(6) The Fund's advisor and administrator have voluntarily agreed to waive
advisory and administration fees and reimburse the Fund for certain expenses
so that the total annual fund operating expenses (exclusive of distribution
and service fees, agency fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) will not exceed 1.75%. As a result, the
actual management and administration fees for each share class would be
0.74%, other expenses for each share class would be 1.01% and total annual
fund operating expenses for Class J and N shares would be 2.35% and 2.85%,
respectively. This arrangement may be terminated by the advisor or
administrator at any time.

(7) The Fund pays an annual fee of 0.10% to an agent in Japan to compensate the
agent for, among other things, making certain filings and reports in Japan.

<PAGE>
YOUR ACCOUNT

INVESTMENT MINIMUMS(7)

<TABLE>
<S> <C>
J Shares
Initial Investment 1 shares
Subsequent Investments 1 share

N Shares
Initial Investment 10 shares
Subsequent Investments 1 share
</TABLE>

CHOOSING A SHARE CLASS

The Fund offers two classes of shares in this prospectus -- CLASS J and N. Each
share class has its own sales charge and expense structure. Determining which
share class is best for you depends on the dollar amount you are investing and
the number of years for which you are willing to invest. Based on your personal
situation, your investment advisor can help you decide which class of shares
makes the most sense for you.

The Fund also offers Class A, B, C and Z shares which are made available through
separate prospectuses. These classes are not available for purchase in Japan.

HOW TO BUY SHARES

Your financial advisor can help you establish an appropriate investment
portfolio, buy shares and monitor your investments. When the Fund receives your
purchase request in "good form," your shares will be bought at the next
calculated public offering price. "Good form" means that you placed your order
with your brokerage firm or your payment has been received and your application
is complete, including all necessary signatures. Class J and Class N shares of
the Fund are denominated in Yen.

SALES CHARGES

You may be subject to an initial sales charge when you purchase, or a contingent
deferred sales charge (CDSC) when you sell, shares of the Fund. These sales
charges are described below. In certain circumstances, these sales charges are
waived, as described below and in the Statement of Additional Information.

CLASS J SHARES Your purchases of Class J shares generally are at the public
offering price. This price includes a sales charge that is based on the amount
of your initial investment when you open your account. A portion of the sales
charge is the commission paid to the financial advisor firm on the sale of Class
J shares. The sales charge you pay on additional investments is based on the
total amount of your purchase and the current value of your account. The amount
of the sales charge differs depending on the amount you invest as shown in the
table below.

CLASS J SALES CHARGES

<TABLE>
<CAPTION>
% OF
OFFERING
AS A % OF PRICE
THE PUBLIC AS A % RETAINED BY
OFFERING OF YOUR FINANCIAL
AMOUNT OF PURCHASE PRICE INVESTMENT ADVISOR FIRM
<S> <C> <C> <C>
Less than 10,000 shares 3.00 3.09 3.00
10,000 to less than 50,000 shares 2.00 2.04 2.00
50,000 shares or more 1.00 1.01 1.00
</TABLE>

(7) The Fund reserves the right to change the investment minimums. The Fund also
reserves the right to refuse a purchase order for any reason, including if
it believes that doing so would be in the best interest of the Fund and its
shareholders.

5
<PAGE>
YOUR ACCOUNT

UNDERSTANDING CONTINGENT DEFERRED SALES CHARGES (CDSC)

Certain investments in Class N shares are subject to a CDSC, a sales charge
applied at the time you sell your shares. You will pay the CDSC only on shares
you sell within a certain amount of time after purchase. The CDSC generally
declines each year until there is no charge for selling shares. The CDSC is
applied to the net asset value at the time of purchase. For purposes of
calculating the CDSC, the start of the holding period is the month-end of the
month in which the purchase is made. Shares you purchase with reinvested
dividends or capital gains are not subject to a CDSC. When you place an order to
sell shares, the Fund will automatically sell first those shares not subject to
a CDSC and then those you have held the longest unless instructed otherwise.
This policy helps reduce and possibly eliminate the potential impact of the
CDSC.

CLASS N SHARES Your purchases of Class N shares are at the Fund's NAV. Class N
shares have no front-end sales charge, but they do carry a CDSC that is imposed
only on shares sold prior to the completion of the periods shown in the chart
below. The CDSC generally declines each year and eventually disappears over
time. Class N shares automatically convert to Class J shares after five years.
The distributor pays the financial advisor firm an up-front commission of 3.00%
on sales of Class N shares.

CLASS N SALES CHARGES

<TABLE>
<CAPTION>
% DEDUCTED WHEN
HOLDING PERIOD AFTER PURCHASE SHARES ARE SOLD
<S> <C>
Through first year 3.00
Through second year 2.00
Through third year 2.00
Through fourth year 1.00
Through fifth year 0.00
</TABLE>

CONTINGENT REDEMPTION FEE The Fund can experience substantial price fluctuation
and is intended for long-term investors. Short-term "market timers" who engage
in frequent purchases and redemptions can disrupt the Fund's investment program
and create additional transaction costs that are borne by all shareholders. The
Fund will assess a contingent redemption fee in the amount of 2.00% on
redemptions of Fund shares purchased and held for five business days or less.

The contingent redemption fee will be paid to the Fund to help offset
transaction costs. The Fund will use the "first-in, first-out" method to
determine the five business day holding period. Under this method, the date of
the redemption will be compared with the earliest purchase date of shares held
in the account. If this holding period is five business days or less, the
contingent redemption fee will be assessed.

The contingent redemption fee does not apply to any shares purchased through the
reinvestment of dividends. The fee may not apply to omnibus accounts and wrap
fee programs.

<PAGE>
YOUR ACCOUNT

HOW TO SELL SHARES

Your financial advisor can help you determine if and when you should sell your
shares. You may sell shares of the Fund on any regular business day that the New
York Stock Exchange (NYSE) is open. To receive the current trading day's price,
your financial advisor firm must receive your request prior to the close of the
NYSE, usually 4:00 p.m. Eastern time.

When the Fund receives your sales request in "good form," shares will be sold at
the next calculated price. In "good form" means that money used to purchase your
shares is fully collected. When selling shares by letter of instruction, "good
form" also means (i) your letter has complete instructions, the proper
signatures and signature guarantees, (ii) you have included any certificates for
shares to be sold, and (iii) any other required documents are attached. For
additional documents required for sales by corporations, agents, fiduciaries and
surviving joint owners, please call 1-800-345-6611.

The Fund will generally send proceeds from the sale to you within seven days
(usually on the next business day after your request is received in "good
form"). However, if you purchased your shares by check, the Fund may delay
sending the proceeds from the sale of your shares for up to 15 days after your
purchase to protect against checks that are returned. No interest will be paid
on uncashed redemption checks.

DISTRIBUTION AND SERVICE FEES

The Fund has adopted a plan under Rule 12b-1 that permits it to pay marketing
and other fees to support the sale and distribution of Class J and N shares and
the services provided to you by your financial advisor. The annual distribution
fee and service fee may equal up to 0.25% and 0.25%, respectively, for Class J
shares and 0.75% and 0.25%, respectively, for Class N shares and are paid out of
the assets of these classes. Over time, these fees will increase the cost of
your shares and may cost you more than paying other types of sales charges.(8)

(8) Class N shares automatically convert to Class J shares after five years,
eliminating a portion of the distribution fee upon conversion.

<PAGE>
YOUR ACCOUNT

OTHER INFORMATION ABOUT YOUR ACCOUNT

HOW THE FUND'S SHARE PRICE IS DETERMINED The price of each class of the Fund's
shares is based on its net asset value (NAV). The NAV is determined at the close
of regular trading on the NYSE, usually 4:00 p.m. Eastern time, on each business
day that the NYSE is open (typically Monday through Friday).

When you request a transaction, it will be processed at the NAV (plus any
applicable sales charges) next determined after your request is received in
"good form" by the distributor. In most cases, in order to receive that day's
price, the distributor must receive your order before that day's transactions
are processed. If you request a transaction through your financial advisor's
firm, the firm must receive your order by the close of trading on the NYSE to
receive that day's price.

The Fund determines its NAV for each share class by dividing each class's total
net assets by the number of that class's shares outstanding. In determining the
NAV, the Fund must determine the price of each security in its portfolio at the
close of each trading day. Because the Fund holds securities that are traded on
foreign exchanges, the value of the Fund's securities may change on days when
shareholders will not be able to buy or sell Fund shares. This will affect the
Fund's NAV on the day it is next determined. Securities for which market
quotations are available are valued each day at the current market value.
However, where market quotations are unavailable, or when the advisor believes
that subsequent events have made them unreliable, the Fund may use other data to
determine the fair value of the securities.

You can find the daily prices of some share classes for the Fund in most major
daily newspapers under the caption "Liberty." You can find daily prices for some
share classes by visiting the Fund's web site at www.libertyfunds.com.

ACCOUNT FEES If your account value falls below $1,000 (other than as a result of
depreciation in share value) you may be subject to an annual account fee of $10.
This fee is deducted from the account in June each year. Approximately 60 days
prior to the fee date, the Fund's transfer agent will send you written
notification of the upcoming fee. If you add money to your account and bring the
value above $1,000 prior to the fee date, the fee will not be deducted.

SHARE CERTIFICATES Share certificates are not available for Class J and N
shares.

<PAGE>
YOUR ACCOUNT

UNDERSTANDING FUND DISTRIBUTIONS

The Fund earns income from the securities it holds. The Fund also may realize
capital gains and losses on sales of its securities. The Fund distributes
substantially all of its net investment income and capital gains to
shareholders. As a shareholder, you are entitled to a portion of the Fund's
income and capital gains based on the number of shares you own at the time these
distributions are declared.

DIVIDENDS, DISTRIBUTIONS, AND TAXES The Fund has the potential to make the
following distributions:

TYPES OF DISTRIBUTIONS

<TABLE>
<S> <C>
Dividend Represents interest and dividends earned from securities
held by the Fund.

Capital gains Represents long-term capital gains on sales of securities
held for more than 12 months and short-term capital gains,
which are gains on sales of securities held for a 12-month
period or less.
</TABLE>

DISTRIBUTION OPTIONS The Fund distributes dividends annually and any capital
gains (including short-term capital gains) at least annually. You can choose one
of the options listed in the table below for these distributions when you open
your account.(9) To change your distribution option call 1-800-345-6611.

DISTRIBUTION OPTIONS

Reinvest all distributions in additional shares of your current fund

Receive dividends in cash (see options below) and reinvest capital gains(10)

Receive all distributions in cash (with one of the following options) (10):

- - send the check to your address of record

- - send the check to a third party address

- - transfer the money to your bank via electronic funds transfer

TAX CONSEQUENCES FOR U.S. INVESTORS Regardless of whether you receive your
distributions in cash or reinvest them in additional Fund shares, all Fund
distributions are subject to federal income tax. Depending on the state where
you live, distributions may also be subject to state and local income taxes.

In general, any distributions of dividends, interest and short-term capital
gains are taxable as ordinary income. Distributions of long-term capital gains
are generally taxable as such, regardless of how long you have held your Fund
shares. Shareholders who are not subject to U.S. federal income tax generally
will not have to pay tax on distributions of long-term capital gains. You will
be provided with information each year regarding the amount of ordinary income
and capital gains distributed to you for the previous year and any portion of
your distribution which is exempt from state and local taxes. Your investment in
the Fund may have additional personal tax implications. Please consult your tax
advisor on foreign, federal, state, local or other applicable tax laws.

(9) If you do not indicate on your application your preference for handling
distributions, the Fund will automatically reinvest all distributions in
additional shares of the Fund.

(10) Distributions of $10 or less will automatically be reinvested in additional
Fund shares. If you elect to receive distributions by check and the check is
returned as undeliverable, or if you do not cash a distribution check within
six months of the check date, the distribution will be reinvested in
additional shares of the Fund.

<PAGE>
YOUR ACCOUNT

In addition to the dividends and capital gains distributions made by the Fund,
you may realize a capital gain or loss when selling shares of the Fund. Such
transactions may be subject to federal, state and local income tax. Shareholders
who are not subject to U.S. federal income tax generally will not have to pay
tax on gains realized upon a disposition of Fund shares.

TAX CONSEQUENCES FOR NON-U.S. INVESTORS Non U.S. investors should consult their
tax advisors concerning the tax consequences of ownership of shares of the Fund,
including the possibility that distributions may be subject to a 30% U.S.
withholding tax (or reduced rate of withholding provided by treaty), the
possibility that a non-U.S. investor may be subject to U.S. tax on capital gain
distributions and gains realized upon the sale of Fund shares if the investor is
present in the United States for more than 182 days during the taxable year (and
certain other conditions apply), or the possibility that a non-U.S. investor may
be subject to U.S. tax on income from the Fund that is "effectively connected"
with a U.S. trade or business carried on by such investor.

The Fund is generally required to withhold 31% of any redemption proceeds and
all income dividends and capital gain distributions it pays (1) if an investor
does not provide a correct, certified taxpayer identification number, (2) if the
Fund is notified that an investor has underreported income in the past, or (3)
if an investor fails to certify to the Fund that he or she is not subject to
withholding. Special withholding rules may apply to non-U.S. shareholders. In
order to avoid back-up withholding, a non-U.S. investor must provide
documentation that proves such investor is not a U.S. person who would be
subject to those rules. Additional certifications are necessary if a non-U.S.
investor wishes to obtain reduced withholding rates under a treaty.

The Internal Revenue Service recently revised its regulations affecting the
application to foreign investors of the back-up withholding and withholding tax
rules described above. The new regulations will generally be effective for
payments made on or after January 1, 2000 (although transition rules will
apply). In some circumstances, the new rules will increase the certification and
filing requirements imposed on foreign investors in order to qualify for
exemption from the 31% back-up withholding tax and for reduced withholding tax
rates under income tax treaties. Foreign investors in the Fund should consult
their tax advisors with respect to the potential application of these new
regulations.

<PAGE>
MANAGING THE FUND

INVESTMENT ADVISOR

Newport Fund Management, Inc. (Newport), located at 580 California Street, Suite
1960, San Francisco, California 94104, is the Fund's investment advisor. In its
duties as investment advisor, Newport runs the Fund's day-to-day business,
including placing all orders for the purchase and sale of the Fund's portfolio
securities. Newport has been an investment advisor since 1987. As of March 31,
2000, Newport managed over $1.4 billion in assets.

For the 1999 fiscal year, aggregate advisory fees paid to Newport by the Fund
amounted to 0.59% of average daily net assets of the Fund.

PORTFOLIO MANAGER

DAVID SMITH, a senior vice president of Newport and its immediate parent,
Newport Pacific Management, Inc. (Newport Pacific), is the manager for the Fund
and has managed the Fund since it commenced operations in June, 1996. Mr. Smith
has managed various other funds or accounts on behalf of Newport Pacific since
October, 1994.

<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance. Information is shown for the Fund's fiscal years since
inception, which run from September 1 to August 31. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that you would have earned (or lost) on an investment in the
Fund (assuming reinvestment of all dividends and distributions). This
information has been derived from the Fund's financial statements which have
been audited by PricewaterhouseCoopers LLP, independent accountants, whose
report, along with the Fund's financial statements, is included in the Fund's
annual report. You can request a free annual report by calling 1-800-426-3750.
As of the date of this prospectus, Class J and Class N shares had no financial
history. Therefore, the financial highlights are for Class A, B and C shares
which are not available in this prospectus. These classes are not available for
purchase in Japan.

THE FUND

<TABLE>
<CAPTION>
Year ended August 31,
1999 1998 1997

Class A Class B Class C Class A Class B Class C Class A Class B Class C(c)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value-- Beginning of period ($) 8.660 8.520 8.510 10.050 9.950 9.940 9.710 9.690 9.690

INCOME FROM INVESTMENT OPERATIONS ($):
Net investment loss (a)(b) (0.128) (0.219) (0.221) (0.103) (0.172) (0.172) (0.094) (0.170) (0.170)

Net realized and unrealized gain (loss) 10.008 9.809 9.811 (1.265) (1.236) (1.236) 0.434 0.430 0.420

Total from Investment Operations 9.880 9.590 9.590 (1.368) (1.408) (1.408) 0.340 0.260 0.250

LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS ($):
From net realized gains --- --- --- (0.022) (0.022) (0.022) --- --- ---

Net asset value-- End of period ($) 18.540 18.110 18.100 8.660 8.520 8.510 10.050 9.950 9.940

Total return (%) (d)(e) 114.09 112.56 112.69 (13.62) (14.16) (14.18) 3.50 2.68 2.58

RATIOS TO AVERAGE NET ASSETS (%):
Expenses (f) 2.00 2.75 2.75 2.00 2.75 2.75 2.00 2.75 2.75

Net investment loss (f) (1.03) (1.78) (1.78) (1.12) (1.87) (1.87) (0.93) (1.68) (1.68)

Fees and expenses waived or borne by
the Advisor/Administrator (f) 0.46 0.46 0.46 0.72 0.72 0.72 1.79 1.79 1.79

Portfolio turnover (%) 27 27 27 24 24 24 20 20 20

Net assets at end of period (000) ($) 17,091 21,333 8,167 2,887 6,028 1,862 4,073 6,275 3,001

(a) Net of fees and expenses waived or
borne by the Advisor/Administrator
which amounted to ($): 0.057 0.057 0.057 0.066 0.066 0.066 0.180 0.180 0.180
</TABLE>

(b) Per share data was calculated using average shares outstanding during the
period.

(d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.

(e) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total (e) return would have been reduced.

(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

<PAGE>
Financial Highlights

The Fund

<TABLE>
<CAPTION>
Period ended August 31,
1996 (c)
Class A Class B Class C
<S> <C> <C> <C>
Net asset value-- Beginning of period ($) 10.000 10.000 10.000

INCOME FROM INVESTMENT OPERATIONS ($):
Net investment loss (a)(b) (0.016) (0.034) (0.034)

Net realized and unrealized gain (loss) (0.274) (0.276) (0.276)

Total from Investment Operations (0.290) (0.310) (0.310)

Net asset value-- End of period ($) 9.710 9.690 9.690

Total return (%) (d)(e)(f) (2.90) (3.10) (3.10)

RATIOS TO AVERAGE NET ASSETS (%):
Expenses (g)(h) 2.00 2.75 2.75

Net investment loss (g)(h) (0.66) (1.41) (1.41)

Fees and expenses waived or borne by
the Advisor/Administrator (g)(h) 9.13 9.13 9.13

Portfolio turnover (%) --- --- ---

Net assets at end of period (000) ($) 1,066 1,197 472

(a) Net of fees and expenses waived or
borne by the Advisor/Administrator
which amounted to ($): 0.230 0.230 0.230
</TABLE>

(b) Per share data was calculated using average shares outstanding during the
period.

(d) Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.

(e) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.

(f) Not annualized.

(g) The benefits derived from custody credits and directed brokerage
arrangements had no impact.

(h) Annualized.

<PAGE>
NOTES

- --------------------------------------------------------------------------------

<PAGE>
NOTES

- --------------------------------------------------------------------------------

<PAGE>
FOR MORE INFORMATION

You can get more information about the Fund's investments in the Fund's
semi-annual and annual reports to shareholders. The annual report contains a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance over its last fiscal year.

You may wish to read the Statement of Additional Information for more
information on the Fund and the securities in which it invests. The Statement of
Additional Information is incorporated into this prospectus by reference, which
means that it is considered to be part of this prospectus.

You can get free copies of reports and the Statement of Additional Information,
request other information and discuss your questions about the Fund by writing
or calling the Fund's distributor at:

Liberty Funds Distributor, Inc.
One Financial Center
Boston, MA 02111-2621
1-800-426-3750
www.libertyfunds.com

Text-only versions of all Fund documents can be viewed online or downloaded from
the Securities and Exchange Commission at www.sec.gov.

You can review and copy information about the Fund by visiting the following
location, and you can obtain copies, upon payment of a duplicating fee, by
electronic request at the E-mail address [email protected] or by writing the:

Public Reference Room
Securities and Exchange Commission
Washington, DC 20549-6009

Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.

INVESTMENT COMPANY ACT FILE NUMBER:

Liberty Funds Trust II: 811-3009

- - Liberty-Newport Japan Opportunities Fund (formerly Newport Japan
Opportunities Fund)

[LIBERTY FUNDS letterhead]