Putnam
Voyager
Fund II
ANNUAL REPORT
December 31, 1996
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "We anticipate that the new fiscal year will bring a better environment for
the types of stocks in which your fund invests. The rate of economic growth
appears likely to slow in the coming months; as this occurs, we believe
interest rates will decline. In such an environment, we believe our current
emphasis on health care, financial, and small-company growth stocks should
bode well for the fund."
-- Charles H. Swanberg, manager
Putnam Voyager Fund II
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
13 Portfolio holdings
25 Financial statements
35 Results of December 5, 1996, shareholder meeting
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
(copyright) Karsh, Ottawa
Dear Shareholder:
Those who read Putnam Voyager Fund II's semiannual report last summer should
not have been surprised by the sharp contrast in performance between the solid
results registered in the first half of fiscal 1997 and the subdued
second-half returns. In their midyear report, your fund's managers duly noted
the prospect of a correction and its possible implications for the fund. When
the market took a pronounced dip during the summer, the stocks of the smaller
growth companies in which your fund typically invests were among the hardest
hit.
The experience speaks forcefully in favor of maintaining a long-term
perspective when pursuing capital appreciation as aggressively as your fund
does. As you will see in the performance tables on pages 8 and 9, the fund's
results over longer periods remain quite respectable, despite fiscal 1997's
modest returns at the hands of a volatile market environment.
In the following report, your fund's managers discuss fiscal 1996 performance
and the factors they believe could have a positive impact in fiscal 1997.
Respectfully yours,
/S/George Putnam
George Putnam
Chairman of the Trustees
February 19, 1997
Report from the Fund Managers
Charles H. Swanberg
Roland W. Gillis
Robert R. Beck
Although the 12 months ended December 31, 1996, represented a banner year for
many investors, they were challenging ones for Putnam Voyager Fund II. The Dow
Jones Industrial Average, which reflects performance of large blue-chip
stocks, climbed 26%; its 1995 - 1996 rise of 68% was the largest two-year gain
since 1954 - 1955. Unfortunately, the news wasn't as good for the types of
stocks in which your fund primarily invests. In 1996, the prices of
small-company stocks trailed those of larger blue-chip stocks by more than
10%.*
Just after the midpoint of the fiscal year, your fund's relatively strong
performance was dampened by a market correction for small-company stocks. The
NASDAQ composite index fell 35 points on July 12 -- one of the biggest
declines in the history of the index. The NASDAQ index covers 4,500 stocks
traded over the counter, including many small-company stocks. After a slight
recovery in August, these stocks continued to underperform for the remainder
of the year. Despite this tough environment, there were some bright spots for
the fund, including strength from a number of holdings in the large-
capitalization portion of its portfolio. For complete performance information,
see pages 8 and 9.
LARGE-CAP AND RETAIL HOLDINGS SHINE DURING FISCAL 1996
Your fund's large-company holdings showed the greatest strength during the
year, mirroring the performance of the Dow Jones Industrial Average. Three of
the fund's strongest performers came from the retail sector. As North
America's largest home-improvement retailer, Home Depot has experienced rapid
growth and recently opened its 500th store. The company is expected to grow to
more than 1,000 outlets in the next 3 years. Starbucks Corp., the coffee
roaster and retailer, was another portfolio standout. In 10 years, the company
has grown from 11 stores to more than 1,100. To sustain its growth momentum,
Starbucks is working to increase its brand visibility and developing new
distribution channels for its products.
* Source: The Wall Street Journal, January 2, 1997.
Also worth noting is St. John Knits, one of the fund's small-company apparel
industry holdings. A designer and manufacturer of women's clothing and
accessories, the company recently announced record-breaking sales and earnings
for its 1996 fiscal year. While these stocks, along with others discussed in
this report, were viewed favorably as of December 31, 1996, all portfolio
holdings are subject to review and adjustment in accordance with the fund's
investment strategy and may well vary in the future.
TECHNOLOGY SECTOR REPRESENTS BOTH UPS AND DOWNS
For the technology sector, 1996 was a year of incredible volatility, with the
strongest overall performance coming from semiconductors, computers, and
software. Since the fund was not heavily weighted in semiconductor stocks, it
was unable to take advantage of the upswing in this portion of the technology
market. However, a number of other technology holdings did prove profitable
during the fiscal year. Electronics for Imaging, Inc., a market leader known
for its Fiery(registered trademark) brand technology, is one example. The
company's hardware and software technology transforms ordinary color copiers
into faster, high-quality, networked color printers. A pioneer in this field,
the company has installed its servers in corporations, agencies, and design
studios around the world.
[GRAPHIC OF HORIZONTAL BAR CHART: TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Computer software 13.2%
Retail 6.3%
Business services 5.6%
Medical supplies and
devices 5.6%
Networking
equipment 5.1%
Footnote reads:
* Based on net assets as of 12/31/96. Sector allocations will vary over time.
Companies that are profiting from the so-called "year 2000" issue were another
highlight of the fund's technology holdings. Essentially, these companies are
developing ways to deal with glitches that may result from computer systems
that are not programmed to recognize the year 2000 and instead will mistake it
for the year 1900. The stocks of companies that can address this problem or
that can develop software to correct it rose dramatically toward the end of
1996. Examples in the fund's portfolio include Vanstar Corp., Gartner Group,
and Viasoft.
In addition to addressing the year 2000 issue, Vanstar is a leading provider
of computer-related products and services, and specializes in building and
managing personal computer networks for businesses. Gartner Group provides
information technology research and market research services in addition to
working on year 2000 problems.
Information technology holdings such as Alternative Resources Corp. were also
strong performers in 1996. Alternative Resources provides technical staffing
for corporations and has benefited greatly as businesses continue to look to
outside agencies for temporary technical help. The company has a database of
employees who are skilled in mainframe computer operations, personal computer
support, and voice and data communications.
A GOOD YEAR FOR BROADCASTING
A significant event affecting the portfolio's broadcasting sector this year
was passage of the Telecommunications Act of 1996, which allows for ownership
of multiple television or radio stations. The strongest performance in this
sector came from companies involved in the wave of consolidations generated by
this new legislation.
Among the fund's radio holdings, Clear Channel Communications proved
profitable as the company acquired new stations. The stock of Infinity
Broadcasting Corp., already a strong performer, provided an additional boost
to the portfolio in the first half of the year after the announcement that
Westinghouse Electric Corp. planned to purchase the company.
Also worth noting is the performance of educational company stocks such as
Sylvan Learning Center and Apollo Group, Inc. Sylvan, with a network of more
than 500 centers in the United States and Canada, develops individualized
programs in subjects such as reading, math, and study skills for students in
need of supplemental education. Apollo Group provides higher educational
programs for working adults. Its programs reach more than 40,000 students in
the United States and London.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Thermo Electron Corp.
Energy
Cabletron Systems, Inc.
Networking equipment
Computer Associates International, Inc.
Computer software
Cisco Systems, Inc.
Networking equipment
Parametric Technology Corp.
Computer software
EMC Corp.
Computer equipment
MBNA Corp.
Financial services
Apollo Group, Inc. (Class A)
Education services
Baan Co., N.V.
Computer software
Electronics for Imaging, Inc.
Computer software
Footnote reads:
These holdings represent 12.5% of the fund's assets as of 12/31/96. Portfolio
holdings will vary over time.
OUTLOOK FOR FISCAL '97 IS CAUTIOUSLY OPTIMISTIC
We anticipate that the new fiscal year will bring a healthier environment for
the types of stocks in which your fund invests. The rate of economic growth
appears likely to slow in the coming months; as this slowing occurs, we
believe interest rates will decline. In such an environment, our current
emphasis on health-care, financial, and small-company growth stocks should
bode well for the fund. Regardless of the economic environment, we believe the
fund's focus on attractive companies with dominant positions within their
industries and with the potential for significant growth can provide rewarding
long-term results.
Footnote reads:
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed
favorably as of 12/31/96, there is no guarantee the fund will continue to hold
these securities in the future. This fund invests a portion of its assets in
small to medium-sized companies. Such investments increase the risk of greater
price fluctuations.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam Voyager Fund II is designed for investors seeking aggressive
capital appreciation primarily through common stocks.
This section provides, at a glance, information about your fund's performance.
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 12/31/96
(most recent calendar quarter)
Class A Class B Class M
(inception date) (4/14/93) (10/2/95) (10/2/95)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
1 year 7.71% 1.50% 6.89% 1.89% 7.16% 3.42%
- ------------------------------------------------------------------------------
Life of class 99.55 88.05 18.02 14.02 18.48 14.37
Annual average 20.41 18.50 14.17 11.07 14.53 11.34
- ------------------------------------------------------------------------------
COMPARATIVE INDEXES FOR PERIODS ENDED 12/31/96
Standard & Poor's Consumer
500 Index Price Index
- ------------------------------------------------------------------------------
1 year 22.95% 3.32%
- ------------------------------------------------------------------------------
Life of class A 81.66 10.45
Annual average 17.43 2.71
- ------------------------------------------------------------------------------
Life of class B and M 30.94 3.52
Annual average 24.10 2.81
- ------------------------------------------------------------------------------
Footnote reads:
Performance data represent past results, do not reflect future performance,
and will differ for each share class. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment returns
and principal value will fluctuate so that an investor's shares, when sold,
may be worth more or less than their original cost. POP assumes 5.75% maximum
sales charge for class A shares and 3.50% for class M shares. CDSC for class B
shares assumes the applicable sales charge, with the maximum being 5%.
[GRAPHIC WORM CHART OMMITED: GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 4/14/93
Starting value (Insert ending Total)
$9,425 Fund's class A shares at POP $18,805
$10,000 S&P 500 Index $18,166
$10,000 Consumer Price Index $11,045
(plot points for total return mountain chart)
S&P 500
Date/year Fund at POP Index CPI
- ---------- ------------ --------- ---------
4/14/93 9,425 10,000 10,000
12/31/93 11,589 10,604 10,153
12/31/94 11,629 10,743 10,425
12/31/95 17,459 14,776 10,689
12/31/96 18,805 18,166 11,045
Footnote reads:
Past performance is no assurance of future results. A $10,000 investment in
the fund's class B shares at inception on 10/2/95 would have been valued at
$11,802 at net asset value on 12/31/96 ($11,402 with a redemption at the end
of the period). A $10,000 investment in the fund's class M shares at inception
on 10/2/95 would have been valued at $11,848 at net asset value on 12/31/96
($11,437 at public offering price.)
PRICE AND DISTRIBUTION INFORMATION
12 months ended 12/31/96
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) -- -- --
- ------------------------------------------------------------------------------
Income -- -- --
- ------------------------------------------------------------------------------
Capital gains -- -- --
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
12/31/95 $14.40 $15.28 $14.37 $14.39 $14.91
- ------------------------------------------------------------------------------
12/31/96 15.51 16.46 15.36 15.42 15.98
- ------------------------------------------------------------------------------
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee than
class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including any
initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance figures
shown here assume the maximum 5.75% sales charge for class A shares and 3.50%
for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of the
redemption of class B shares and assumes redemption at the end of the period.
Your fund's CDSC declines from a 5% maximum during the first year to 1% during
the sixth year. After the sixth year, the CDSC no longer applies.
COMPARATIVE INDEXES
Standard & Poor's 500 Composite Stock Price Index is an index of common stocks
frequently used as a general measure of stock market performance. Performance
results assume reinvestment of all distributions and interest payments and do
not take in account brokerage fees or taxes. Securities in the fund do not
match those in the index and performance of the fund will differ. It is not
possible to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund *
Health Sciences Trust
International Growth Fund +
International New Opportunities Fund
Investors Fund
New Opportunities Fund
OTC & Emerging Growth Fund [DBL. DAGGER]
Vista Fund
Voyager Fund
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Diversified Income Trust II
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
Intermediate U.S. Government Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
LIFESTAGESM FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
MOST CONSERVATIVE
INVESTMENTS **
Putnam money market funds: ++
California Tax Exempt Money Market Fund
Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts [2 DBL. DAGGERS]
* Formerly Natural Resources Fund
+ Formerly Overseas Growth Fund
[DBL. DAGGER] Formerly OTC Emerging Growth Fund
[SECTION MARK] Not available in all states.
** Relative to above.
++ An investment in a money market fund is neither
insured nor guaranteed by the U.S. government. These
funds are managed to maintain a price of $1.00 per share,
although there is no assurance that this price will be
maintained in the future.
[2 DBL. DAGGERS] Not offered by Putnam Investments. Certificates of
deposit offer a fixed rate of return and may be insured
up to certain limits by federal/state agencies. Savings
accounts may also be insured up to certain limits. Please
call your financial advisor or Putnam at 1-800-225-1581 to
obtain a prospectus for any Putnam fund. It contains more
complete information, including charges and expenses.
Please read it carefully before you invest or send money.
Report of independent accountants
For the fiscal year ended December 31, 1996
To the Trustees and Shareholders of
Putnam Voyager Fund II
We have audited the accompanying statement of assets and liabilities of Putnam
Voyager Fund II, including the portfolio of investments owned, as of December
31, 1996, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1996, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Putnam Voyager Fund II as of December 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended and the financial highlights for each of the
periods indicated therein, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
February 10, 1997
Portfolio of investments owned
December 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS (98.1%) *
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Advertising (1.2%)
- ---------------------------------------------------------------------------------------------------------
42,966 Lamar Advertising Co. + $ 1,041,926
50,843 Omnicom Group Inc. 2,326,067
107,850 Outdoor Systems, Inc. + 3,033,281
51,104 TMP Worldwide Inc. + 651,576
48,500 Universal Outdoor Holdings, Inc. + 1,139,750
--------------
8,192,600
Aerospace and Defense (0.5%)
- ---------------------------------------------------------------------------------------------------------
13,600 Boeing Co. 1,446,700
7,000 Lockheed Martin Corp. 640,500
15,000 Northrop Grumman Corp. 1,241,250
--------------
3,328,450
Alcoholic Beverages (0.3%)
- ---------------------------------------------------------------------------------------------------------
36,200 Anheuser-Busch Cos., Inc. 1,448,000
25,700 Seagram Co., Ltd. 995,875
--------------
2,443,875
Apparel (2.2%)
- ---------------------------------------------------------------------------------------------------------
102,331 Gucci Group (Italy) 6,536,393
71,200 Loehmann's Holdings, Inc. + 1,637,600
39,348 Nautica Enterprises, Inc. + 993,537
101,607 St. John Knits, Inc. 4,419,905
49,877 The Men's Wearhouse, Inc. + 1,221,987
20,000 Warnaco Group, Inc. 592,500
--------------
15,401,922
Automotive (0.4%)
- ---------------------------------------------------------------------------------------------------------
45,400 Echlin, Inc. 1,435,775
48,950 Snap-On Inc. 1,743,844
--------------
3,179,619
Banks (1.8%)
- ---------------------------------------------------------------------------------------------------------
14,800 Bank of Boston Corp. 950,900
36,400 BankAmerica Corp. 3,630,900
15,000 Barnett Banks, Inc. 616,875
39,200 Citicorp 4,037,600
9,400 Morgan (J.P.) & Co., Inc. 917,675
26,000 NationsBank Corp. 2,541,500
--------------
12,695,450
Basic Industrial Products (0.2%)
- ---------------------------------------------------------------------------------------------------------
35,000 General Signal Corp. 1,496,250
Biotechnology (0.2%)
- ---------------------------------------------------------------------------------------------------------
30,000 IDEXX Laboratories, Inc. + 1,080,000
Broadcasting (2.2%)
- ---------------------------------------------------------------------------------------------------------
35,318 Chancellor Broadcasting Corp. Class A + 838,803
123,460 Clear Channel Communications, Inc. + 4,459,993
3,100 Cox Radio, Inc. Class A + 54,250
119,085 Evergreen Media Corp. Class A + 2,977,125
26,000 Heartland Wireless Communications, Inc. + 341,250
26,406 Infinity Broadcasting Corp. Class A + 887,902
18,032 Jacor Communications, Inc. + 493,626
34,343 LIN Television Corp. + 1,450,992
31,900 SFX Broadcasting, Inc. Class A + 949,025
43,883 Sinclair Broadcast Group, Inc. Class A + 1,140,958
8,730 TCI Satellite Entertainment, Inc. Class A + 86,209
27,800 Univision Communications Inc. Class A + 1,028,600
29,466 Westwood One, Inc. + 489,872
22,200 Young Broadcasting Corp. Class A + 649,350
--------------
15,847,955
Building Products (0.8%)
- ---------------------------------------------------------------------------------------------------------
99,710 Lowe's Cos., Inc. 3,539,705
35,000 Masco Corp. 1,260,000
14,000 Sherwin Williams Co. 784,000
--------------
5,583,705
Business Services (5.6%)
- ---------------------------------------------------------------------------------------------------------
76,998 Abacus Direct Corp. + 1,443,713
43,000 Affiliated Computer Services, Inc. Class A + 1,279,250
53,977 Airgas, Inc. + 1,187,494
26,732 APAC Teleservices, Inc. + 1,025,841
88,566 Corestaff, Inc. + 2,097,907
169,731 Corporate Express, Inc. + 4,996,456
728,797 Corporate Services Group PLC (United Kingdom) 2,164,758
181,843 Employee Solutions, Inc. + 3,727,782
79,314 Gartner Group Inc. Class A + 3,088,290
48,270 Interim Services Inc. + 1,713,585
99,750 Metromedia International Group, Inc. + 985,031
32,300 Metzler Group, Inc. + 1,025,525
266,433 Officemax, Inc. + 2,830,851
20,839 Paychex, Inc. 1,071,906
32,700 Pharmaceutical Product Development, Inc. + 825,675
642,220 Rentokil Group PLC (United Kingdom) 4,826,720
75,256 Robert Half International, Inc. + 2,586,925
66,800 Select Appointments Holdings PLC ADR
(United Kingdom) + 768,200
65,739 Serco Group PLC (United Kingdom) 758,554
6,300 Snyder Communications Inc. + 170,100
65,700 TeleTech Holdings Inc. + 1,708,200
--------------
40,282,763
Cable Television (0.3%)
- ---------------------------------------------------------------------------------------------------------
21,650 Tele-Comm Liberty Media Group, Inc. Class A + 618,378
89,500 Tele-Communications Class A + 1,169,094
--------------
1,787,472
Chemicals (1.0%)
- ---------------------------------------------------------------------------------------------------------
21,000 Air Products & Chemicals, Inc. 1,451,625
12,000 Betz Laboratories, Inc. 702,000
18,200 Great Lakes Chemical Corp. 850,850
25,400 Praxair, Inc. 1,171,575
32,900 Raychem Corp. 2,636,113
17,500 Witco Chemical Corp. 533,750
--------------
7,345,913
Computer Equipment (1.5%)
- ---------------------------------------------------------------------------------------------------------
272,731 EMC Corp. + 9,034,214
16,800 Hewlett-Packard Co. 844,200
39,261 Splash Technology Holdings, Inc. + 844,112
--------------
10,722,526
Computer Services (3.2%)
- ---------------------------------------------------------------------------------------------------------
150,827 America Online, Inc. + 5,014,998
21,756 CBT Group PLC ADR (Ireland) + 1,180,263
103,200 ECsoft Group PLC ADR (United Kingdom) + 993,300
27,204 Electronic Data Systems Corp. 1,176,573
57,148 First Data Corp. 2,085,902
91,500 IDT Corp. + 1,006,500
100,118 Keane, Inc. + 3,178,747
2,600 Metromail Corp. + 47,450
8,400 Sabre Group Holdings Inc. + 234,150
87,668 Sterling Commerce, Inc. + 3,090,297
32,200 Transaction Systems Architects, Inc. Class A + 1,070,650
149,816 Vanstar Corp. + 3,670,492
15,600 XLConnect Solutions Inc. + 448,500
--------------
23,197,822
Computer Software (13.2%)
- ---------------------------------------------------------------------------------------------------------
30,000 Arbor Software Corp. + 727,500
64,674 Aspect Development, Inc. + 1,762,367
219,813 Baan Co., N.V. (Netherlands) + 7,638,502
109,528 BMC Software, Inc. + 4,531,721
8,400 CCC Information Services Group + 134,400
50,000 Citrix Systems, Inc. + 1,953,125
42,942 Clarify, Inc. + 2,061,216
46,642 Cognex Corp. + 862,877
192,799 Computer Associates Intl., Inc. 9,591,750
36,626 Documentum, Inc. + 1,236,128
106,845 Electronic Arts, Inc. + 3,198,672
90,919 Electronics for Imaging, Inc. + 7,478,088
30,875 Forte Software, Inc. + 1,011,156
89,878 Geoworks + 2,202,011
3,100 I2 Technologies, Inc. + 118,575
46,212 Informix Corp. + 941,570
53,600 Legato Systems, Inc. + 1,748,700
50,100 McAfee Associates, Inc. + 2,204,400
52,424 Medic Computer Systems, Inc. + 2,113,343
54,246 Microsoft Corp. + 4,482,076
43,069 OneWave, Inc. + 336,477
176,581 Parametric Technology Corp. + 9,071,849
60,276 Raptor Systems, Inc. + 1,213,055
141,180 Rational Software Corp. + 5,585,434
36,000 Remedy Corp. + 1,935,000
104,388 Sandisk Corp. + 1,017,783
22,577 Scopus Technology, Inc. + 1,049,831
2,700 SeaChange International, Inc. + 68,850
44,600 Security Dynamics Technologies, Inc. + 1,404,900
102,400 Siebel Systems, Inc. + 2,764,800
184,600 Smallworldwide PLC ADR (United Kingdom) + 2,192,125
108,160 Synopsys, Inc. + 5,002,400
38,407 The Learning Co. Inc. + 552,101
87,200 Vantive Corp. + 2,725,000
70,000 Viasoft, Inc. + 3,307,500
--------------
94,225,282
Consumer Non Durables (0.1%)
- ---------------------------------------------------------------------------------------------------------
9,654 Luxottica Group SPA ADR (Italy) 502,008
Consumer Products (0.5%)
- ---------------------------------------------------------------------------------------------------------
36,381 Kimberly-Clark Corp. 3,465,290
Cosmetics (0.6%)
- ---------------------------------------------------------------------------------------------------------
65,625 Douglas Holding AG (Germany) 2,577,288
129,310 Thermolase Corp. + 2,036,633
--------------
4,613,921
Data Communications (0.6%)
- ---------------------------------------------------------------------------------------------------------
50,000 MFS Communications, Inc. + 2,725,000
84,550 Omnipoint Corp. + 1,627,588
--------------
4,352,588
Education Services (1.5%)
- ---------------------------------------------------------------------------------------------------------
234,718 Apollo Group, Inc. Class A + 7,848,383
55,326 DeVRY, Inc. + 1,300,161
23,100 Learning Tree International, Inc. + 681,450
21,900 Sylvan Learning Systems, Inc. + 624,150
--------------
10,454,144
Electric Utilities (0.4%)
- ---------------------------------------------------------------------------------------------------------
80,264 Calenergy, Inc. + 2,698,877
Electronic Components (1.1%)
- ---------------------------------------------------------------------------------------------------------
66,624 Benchmarq Microelectronics, Inc. + 1,424,088
46,228 Micrel, Inc. + 1,461,961
8,800 Microchip Technology, Inc. + 447,700
3,600 Phoenix Mecano AG (Switzerland) 1,879,195
10,000 Rockwell International Corp. 608,750
70,800 Sipex Corp. + 2,283,300
--------------
8,104,994
Electronics and Electrical Equipment (2.2%)
- ---------------------------------------------------------------------------------------------------------
86,947 Acres Gaming, Inc. + 956,417
57,400 ADT Ltd. + 1,313,025
125,127 Applied Materials, Inc. + 4,496,752
36,488 CHS Electronics, Inc. + 624,857
7,950 General Electric Co. 786,056
39,500 Lernout & Hauspie Speech Products N.V. (Belgium)+ 661,625
160,216 Thermo Instrument Systems, Inc. + 5,307,155
97,200 ThermoQuest Corp. + 1,251,450
--------------
15,397,337
Energy-Related (1.5%)
- ---------------------------------------------------------------------------------------------------------
262,327 Thermo Electron Corp. + 10,820,989
Entertainment (0.3%)
- ---------------------------------------------------------------------------------------------------------
29,357 Disney (Walt) Productions, Inc. 2,043,981
Environmental Control (0.7%)
- ---------------------------------------------------------------------------------------------------------
21,608 Memtec Ltd. ADR (Australia) 710,363
29,900 Pall Corp. 762,450
46,021 Republic Industries, Inc. + 1,435,284
47,114 U.S. Filter Corp. + 1,495,870
27,300 WMX Technologies, Inc. 890,663
--------------
5,294,630
Financial Services (4.8%)
- ---------------------------------------------------------------------------------------------------------
35,352 Aames Financial Corp. 1,268,253
124,382 American Express Co. 7,027,583
23,800 Associates First Capital Corp. 1,050,175
42,300 Concord EFS, Inc. + 1,194,975
28,060 First USA Paymentech, Inc. + 950,533
40,862 Household International, Inc. 3,769,519
4,950 Marschollek, Lautenschlaeger und Partner
AG (Germany) 774,391
194,328 MBNA Corp. 8,064,612
50,600 Metris Companies Inc. + 1,214,400
30,236 RAC Financial Group, Inc. + 638,736
139,591 Southern Pacific Funding Corp. + 4,344,770
92,300 TCF Financial Corp. 4,015,050
--------------
34,312,997
Food and Beverages (0.7%)
- ---------------------------------------------------------------------------------------------------------
79,280 Archer Daniels Midland Co. 1,744,160
36,400 PepsiCo, Inc. 1,064,700
37,800 Sara Lee Corp. 1,408,050
22,700 Whitman Corporation 519,263
--------------
4,736,173
Funeral/Cemetery Services ( -- %)
- ---------------------------------------------------------------------------------------------------------
5,800 Loewen Group, Inc. 226,925
Gas Pipelines (0.6%)
- ---------------------------------------------------------------------------------------------------------
20,000 El Paso Natural Gas Co. 1,010,000
50,300 Enron Corp. 2,169,188
26,600 Sonat, Inc. 1,369,900
--------------
4,549,088
Gas Utilities (0.4%)
- ---------------------------------------------------------------------------------------------------------
41,900 Columbia Gas System, Inc. 2,665,888
Health Care Services (2.1%)
- ---------------------------------------------------------------------------------------------------------
30,000 ABR Information Services, Inc. + 1,181,250
22,300 Access Health, Inc. + 997,925
54,288 Cardinal Health, Inc. 3,162,276
51,343 HBO & Co. 3,048,491
127,246 Healthsouth Rehabilitation Corp. + 4,914,877
10,900 Superior Consultant Holdings Corp. + 269,775
19,400 Total Renal Care Holdings, Inc. + 703,250
35,416 Vivra, Inc. + 978,367
--------------
15,256,211
Home Building ( -- %)
- ---------------------------------------------------------------------------------------------------------
11,656 Clayton Homes, Inc. 157,356
Hospital Management (1.0%)
- ---------------------------------------------------------------------------------------------------------
58,060 American Medical Response + 1,886,950
137,714 Health Management Assoc., Inc. + 3,098,565
53,530 National Surgery Centers, Inc. + 2,034,140
--------------
7,019,655
Household Products (1.1%)
- ---------------------------------------------------------------------------------------------------------
112,548 Blyth Industries, Inc. + 5,135,003
44,700 Tupperware Corp. 2,397,038
--------------
7,532,041
Insurance (0.8%)
- ---------------------------------------------------------------------------------------------------------
16,800 Aetna Inc. 1,344,000
10,000 Allmerica Financial Corp. 335,000
40,600 American General Corp. 1,659,525
10,500 American International Group, Inc. 1,136,625
5,000 AON Corp. 310,625
5,000 CIGNA Corp. 683,125
27,900 USF&G Corp. 582,413
--------------
6,051,313
Leisure (1.4%)
- ---------------------------------------------------------------------------------------------------------
54,467 Adidas AG 144A (Germany) 2,321,656
40,000 Family Golf Centers, Inc. + 1,205,000
191,270 Signature Resorts, Inc. + 6,742,268
--------------
10,268,924
Lodging (1.6%)
- ---------------------------------------------------------------------------------------------------------
30,474 Doubletree Corp. + 1,371,330
93,400 Extended Stay America, Inc. + 1,879,675
94,464 HFS, Inc. + 5,644,224
15,000 Hilton Hotels Corp. 391,875
66,600 Prime Hospitality Corp. + 1,073,925
18,300 Promus Hotel Corp. + 542,138
15,678 Renaissance Hotel Group N.V. (Hong Kong)+ 368,433
4,250 Studio Plus Hotels, Inc. + 66,938
--------------
11,338,538
Medical Management Services (1.2%)
- ---------------------------------------------------------------------------------------------------------
14,100 OccuSystems, Inc. + 380,700
75,147 Pediatrix Medical Group, Inc. + 2,780,439
169,658 Phycor, Inc. + 4,814,046
19,100 Phymatrix, Inc. + 272,175
43,800 Physician Reliance Network, Inc. + 339,450
--------------
8,586,810
Medical Supplies and Devices (5.6%)
- ---------------------------------------------------------------------------------------------------------
9,500 Bard (C.R.), Inc. 266,000
74,655 Boston Scientific Corp. + 4,479,300
95,458 Johnson & Johnson 4,749,036
70,000 Lifecore Biomedical, Inc. + 1,260,000
7,750 Mallinckrodt, Inc. 341,969
20,100 Medtronic, Inc. 1,366,800
21,400 Minimed, Inc. + 690,150
45,433 Omnicare, Inc. 1,459,535
55,857 Physician Sales & Service, Inc. + 802,944
68,748 Shared Medical Systems Corp. 3,385,839
54,352 Sola International, Inc. + 2,065,376
51,602 Spine-Tech, Inc. + 1,290,050
110,465 St. Jude Medical Inc. + 4,708,571
209,840 Stryker Corp. 6,268,970
153,849 Thermo Cardiosystems, Inc. + 4,615,470
17,700 Thermotrex Corp. + 484,538
70,003 Trex Medical Corp. + 910,039
23,100 U.S. Surgical Corp. 909,563
--------------
40,054,150
Metals and Mining (0.5%)
- ---------------------------------------------------------------------------------------------------------
39,900 Freeport-McMoRan Copper & Gold Co., Inc. Class A 1,122,188
104,640 Miller Industries, Inc./Tennessee + 2,092,800
6,800 Nucor Corp. 346,800
--------------
3,561,788
Networking Equipment (5.1%)
- ---------------------------------------------------------------------------------------------------------
85,638 Ascend Communications, Inc. + 5,320,261
147,303 Bay Networks Inc. + 3,074,950
12,600 Black Box Corp. + 519,750
304,942 Cabletron Systems, Inc. + 10,139,320
83,501 Cascade Communications Corp. + 4,602,993
145,991 Cisco Systems, Inc. + 9,288,677
5,587 International Network Services + 168,658
54,181 Shiva Corp. + 1,889,562
15,107 U.S. Robotics Corp. + 1,087,704
--------------
36,091,875
Nursing Homes (0.6%)
- ---------------------------------------------------------------------------------------------------------
100,008 Assisted Living Concepts Inc. + 1,525,122
42,096 Health Care & Retirement Corp. + 1,204,998
65,147 Sunrise Assisted Living, Inc. + 1,815,973
--------------
4,546,093
Office Equipment (1.1%)
- ---------------------------------------------------------------------------------------------------------
250,297 Viking Office Products, Inc. + 6,679,801
25,900 Xerox Corp. 1,362,988
--------------
8,042,789
Oil and Gas (1.8%)
- ---------------------------------------------------------------------------------------------------------
6,000 Baker Hughes Inc. 207,000
11,068 British Petroleum PLC ADR (United Kingdom) 1,564,739
6,800 Exxon Corp. 666,400
33,000 Halliburton Co. 1,988,250
30,800 Mobil Corp. 3,765,300
16,100 Schlumberger Ltd. 1,607,988
68,527 Total Corp. ADS (France) 2,758,212
--------------
12,557,889
Paper and Forest Products (0.3%)
- ---------------------------------------------------------------------------------------------------------
18,900 Fort Howard Corp. + 523,294
10,000 Temple Inland, Inc. 541,250
10,000 Unisource Worldwide, Inc. + 202,500
24,000 Weyerhaeuser Co. 1,137,000
--------------
2,404,044
Pharmaceuticals and Biotechnology (2.5%)
- ---------------------------------------------------------------------------------------------------------
18,200 Astra AB (Sweden) 896,761
43,210 Biochem Pharmaceutical, Inc. + 2,171,303
35,700 Dura Pharmaceuticals, Inc. + 1,704,675
40,090 Gilead Sciences, Inc. + 1,002,250
25,100 Lilly (Eli) & Co. 1,832,300
19,812 Medicis Pharmaceutical Corp. Class A + 871,728
34,752 Merck & Co., Inc. 2,754,096
23,986 Parexel International Corp. + 1,238,277
73,442 Pharmacia & Upjohn, Inc. 2,910,139
651,500 PT Darya Varia Laboratoria (Indonesia) 1,048,583
14,000 Smithkline Beecham PLC ADR (United Kingdom) 952,000
800 Transkaryotic Therapies, Inc. (Malaysia) + 14,800
4,100 Warner-Lambert Co. 307,500
--------------
17,704,412
Photography (0.8%)
- ---------------------------------------------------------------------------------------------------------
39,200 Eastman Kodak Co. 3,145,800
57,300 Polaroid Corp. 2,492,550
--------------
5,638,350
Publishing (0.8%)
- ---------------------------------------------------------------------------------------------------------
75,500 Deluxe Corp. 2,472,625
7,000 Gannett Co., Inc. 524,125
27,300 Harcourt General, Inc. 1,259,213
15,700 Tribune Co. 1,238,338
--------------
5,494,301
Railroads (0.7%)
- ---------------------------------------------------------------------------------------------------------
16,500 Burlington Northern Santa Fe Corp. 1,425,188
81,897 Wisconsin Central Transportation Corp. + 3,245,169
--------------
4,670,357
Restaurants (1.2%)
- ---------------------------------------------------------------------------------------------------------
50,000 Applebee's International, Inc. 1,375,000
28,822 Boston Chicken, Inc. + 1,033,989
49,844 J.D. Wetherspoon PLC (United Kingdom) 998,395
174,420 Landry's Seafood Restaurants, Inc. + 3,728,228
96,620 PizzaExpress PLC (United Kingdom) 872,556
21,100 Rainforest Cafe, Inc. + 495,850
--------------
8,504,018
Retail (6.3%)
- ---------------------------------------------------------------------------------------------------------
74,694 Bed Bath & Beyond, Inc. + 1,811,330
19,600 Boise Cascade Office Products + 411,600
219,340 CompUSA, Inc. + 4,523,888
53,100 Dayton Hudson Corporation 2,084,175
357,588 Dixons Group PLC (United Kingdom) 3,321,134
43,300 Federated Department Stores + 1,477,613
69,317 Global DirectMail Corp. + 3,023,955
59,757 Kohls Corp. + 2,345,462
25,000 Neiman-Marcus Group, Inc. + 637,500
30,720 Payless Shoesource, Inc. + 1,152,000
63,513 Petco Animal Supplies, Inc. + 1,317,895
265,822 Price/Costco, Inc. + 6,678,778
58,700 Revco D.S., Inc. + 2,171,900
33,600 Rite Aid Corp. 1,335,600
43,435 Saks Holdings, Inc. + 1,172,745
124,690 Staples, Inc. + 2,252,213
237,678 Starbucks Corp. + 6,803,533
28,000 TJX Cos., Inc. (The) 1,326,500
38,440 Wolverine World Wide, Inc. 1,114,760
--------------
44,962,581
Satellite Services (0.4%)
- ---------------------------------------------------------------------------------------------------------
97,800 PanAmSat Corp. + 2,738,400
Semiconductors (3.7%)
- ---------------------------------------------------------------------------------------------------------
46,000 Actel Corp. + 1,092,500
102,911 Analog Devices Inc. + 3,486,110
23,993 Lattice Semiconductor Corp. + 1,103,678
115,467 Linear Technology Corp. 5,066,115
146,072 Maxim Integrated Products Inc. + 6,317,614
95,250 National Semiconductor Corp. + 2,321,719
45,386 S3, Inc. + 737,523
44,039 SGS-Thomson Microelectronics ADR (France) + 3,082,730
19,600 Texas Instruments, Inc. 1,249,500
50,018 Xilinx, Inc. + 1,841,288
--------------
26,298,777
Specialty Consumer Products (1.0%)
- ---------------------------------------------------------------------------------------------------------
186,850 Bulgari S.P.A. (Italy) 3,793,683
40,000 Central Garden and Pet Co. + 842,500
36,829 Fastenal Co. 1,684,927
53,400 Marks Brothers Jewelers, Inc. + 620,775
--------------
6,941,885
Supermarkets (0.4%)
- ---------------------------------------------------------------------------------------------------------
4,500 Carrefour Supermarche (France) 2,928,014
Telecommunication Equipment (1.7%)
- ---------------------------------------------------------------------------------------------------------
9,300 Andrew Corp. + 493,481
29,850 Brooks Fiber Properties, Inc. + 761,175
60,828 Pairgain Technologies, Inc. + 1,851,452
122,857 Picturetel Corp. + 3,194,282
150,021 Tellabs, Inc. + 5,644,540
5,000 West TeleServices Corp. + 113,750
--------------
12,058,680
Telephone Services (2.0%)
- ---------------------------------------------------------------------------------------------------------
2,300 Deutsche Telekom AG ADR (Germany) + 46,863
33,600 GTE Corp. 1,528,800
22,700 Intermedia Communications, Inc. + 584,525
78,307 IXC Communications, Inc. + 2,407,940
22,972 LCI International, Inc. + 493,898
50,875 MCI Communications Corp. 1,662,977
55,300 McLeod, Inc. Class A + 1,410,150
85,000 MIDCOM Communications, Inc. + 722,500
68,084 RMH Teleservices, Inc. + 527,651
47,500 Sprint Corp. 1,894,063
59,365 Tel-Save Holdings, Inc. + 1,721,585
58,976 WorldCom, Inc. + 1,537,062
--------------
14,538,014
Textiles (0.6%)
- ---------------------------------------------------------------------------------------------------------
34,130 Wolford AG (Austria) 4,130,663
Tobacco (0.2%)
- ---------------------------------------------------------------------------------------------------------
43,300 UST, Inc. 1,401,838
Trucking (0.1%)
- ---------------------------------------------------------------------------------------------------------
17,150 Ryder System, Inc. 482,344
Wireless Communications (0.9%)
- ---------------------------------------------------------------------------------------------------------
36,400 Airtouch Communications, Inc. + 919,100
26,347 CellNet Data Systems Inc. + 385,325
43,391 ICG Communications, Inc. + 764,766
268,121 NEXTEL Communications, Inc. Class A + 3,502,301
36,467 Paging Network, Inc. + 556,122
28,000 Preferred Networks, Inc. + 182,000
15,900 Western Wireless Corp. Class A + 220,613
--------------
6,530,227
--------------
Total Common Stocks (cost $643,262,352) $ 699,543,771
PREFERRED STOCKS (0.9%) *
NUMBER OF SHARES VALUE
- ---------------------------------------------------------------------------------------------------------
28,083 Fielmann AG pfd. (Germany) $ 875,030
18,555 Fresenius AG pfd. (Germany) 3,830,243
13,689 Marschollek, Lautenschlaeger und Partner AG pfd.
(Germany) 1,901,620
--------------
Total Preferred Stocks (cost $6,336,568) $ 6,606,893
Short-Term Investments (3.6%) * (cost $26,029,880)
PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
26,025,000 Interest in $624,569,000 joint repurchase agreement
dated December 31, 1996 with SBC Warburg Inc.
due January 2, 1997 with respect to various U.S. Treasury
obligations -- maturity value of $26,034,759 for an
effective yield of 6.75% $ 26,029,880
- ---------------------------------------------------------------------------------------------------------
Total Investments (cost $675,628,800) *** $ 732,180,544
- ---------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $713,854,888.
+ Non-income-producing security.
*** The aggregate identified cost on a tax basis is $679,825,819, resulting in gross unrealized appreciation
and depreciation of $90,890,923 and $38,536,198, respectively, or net unrealized appreciation of $52,354,725.
ADR or ADS after the name of a foreign holding stands for American Depository Receipts or American Depository
Shares, respectively, representing ownership of foreign securities on deposit with a domestic custodian bank.
The accompanying notes are an integral part of these financial statments.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
December 31, 1996
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $675,628,800) (Note 1) $732,180,544
- ---------------------------------------------------------------------------------------------------
Cash 600,493
- ---------------------------------------------------------------------------------------------------
Dividends and interest receivable 345,781
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 3,933,252
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 3,124,864
- ---------------------------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 4,434
- ---------------------------------------------------------------------------------------------------
Total assets 740,189,368
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 20,711,686
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 3,120,846
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,147,826
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 261,094
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 536
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 3,233
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 547,293
- ---------------------------------------------------------------------------------------------------
Payable for organization expenses (Note 1) 17,230
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 524,736
- ---------------------------------------------------------------------------------------------------
Total liabilities 26,334,480
- ---------------------------------------------------------------------------------------------------
Net Assets $713,854,888
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $683,844,515
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions (Note 1) (26,542,746)
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments
and assets and liabilities in foreign currencies 56,553,119
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $713,854,888
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($348,261,456 divided by 22,455,190 shares) $15.51
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $15.51)* $16.46
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($328,267,979 divided by 21,373,441 shares)** $15.36
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($37,325,453 divided by 2,420,369 shares) $15.42
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $15.42)* $15.98
- ---------------------------------------------------------------------------------------------------
* 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.
** Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended December 31, 1996
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $22,028) $ 2,059,202
- --------------------------------------------------------------------------------------------------
Interest 1,116,283
- --------------------------------------------------------------------------------------------------
Total investment income 3,175,485
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 3,170,929
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 1,440,335
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 14,975
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 11,155
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 568,425
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 2,111,352
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 166,072
- --------------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 3,269
- --------------------------------------------------------------------------------------------------
Reports to shareholders 117,153
- --------------------------------------------------------------------------------------------------
Registration fees 175,565
- --------------------------------------------------------------------------------------------------
Auditing 32,222
- --------------------------------------------------------------------------------------------------
Legal 9,147
- --------------------------------------------------------------------------------------------------
Postage 395,185
- --------------------------------------------------------------------------------------------------
Other 115,399
- --------------------------------------------------------------------------------------------------
Total expenses 8,331,183
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (270,365)
- --------------------------------------------------------------------------------------------------
Net expenses 8,060,818
- --------------------------------------------------------------------------------------------------
Net investment loss (4,885,333)
- --------------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (26,249,629)
- --------------------------------------------------------------------------------------------------
Net realized loss on foreign currency transactions (Note 1) (481)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of assets and liabilities in
foreign currencies during the year 1,375
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 45,937,081
- --------------------------------------------------------------------------------------------------
Net gain on investments 19,688,346
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $14,803,013
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended December 31
---------------------------------
1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (4,885,333) $ (121,381)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments
and foreign currency transactions (26,250,110) 466,880
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments
and assets and liabilities in foreign currencies 45,938,456 10,341,405
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 14,803,013 10,686,904
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (218,962)
- ----------------------------------------------------------------------------------------------------------------------
Class B -- (149,415)
- ----------------------------------------------------------------------------------------------------------------------
Class M -- (13,756)
- ----------------------------------------------------------------------------------------------------------------------
In excess of net investment income
Class A -- (167,955)
- ----------------------------------------------------------------------------------------------------------------------
Class B -- (114,610)
- ----------------------------------------------------------------------------------------------------------------------
Class M -- (10,552)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 542,433,413 143,417,234
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 557,236,426 153,428,888
- ----------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of year 156,618,462 3,189,574
- ----------------------------------------------------------------------------------------------------------------------
End of year (including distributions in excess of net
investment income of $-- and $14, respectively) $713,854,888 $156,618,462
- ----------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
October 2, 1995
(commencement of
Year ended operations) to Year ended
December 31 December 31 December 31
- ---------------------------------------------------------------------------------------------------------------------------
1996 1995 1996
- ---------------------------------------------------------------------------------------------------------------------------
Class M Class B
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $14.39 $13.08 $14.37
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) (.19) --(b) (.22)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 1.22 1.38 1.21
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment activities 1.03 1.38 .99
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- (.03) --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- (.04) --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions -- (.07) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.42 $14.39 $15.36
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 7.16 10.57* 6.89
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $37,325 $6,115 $328,268
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(e) 1.94 .47* 2.19
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) (1.20) (.21)* (1.45)
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 68.95 49.81 68.95
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c) $0.0487 $0.0487
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
October 2, 1995
(commencement of
operations) to
December 31 Year ended December 31
- ---------------------------------------------------------------------------------------------------------------------------
1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
Class B Class A
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $13.08 $14.40 $9.75
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) (.04)(b) (.11) (.01)(b)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 1.40 1.22 4.88
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment activities 1.36 1.11 4.87
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net investment income (.03) -- (.10)
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments (.04) -- (.12)
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.07) -- (.22)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.37 $15.51 $14.40
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%) (a) 10.41* 7.71 50.14
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $66,978 $348,261 $83,526
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) (e) .54* 1.44 1.31
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) (.29)* (.69) (.28)
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 49.81 68.95 49.81
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c) $0.0487
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
April 14, 1993
(commencement of
operations) to
December 31
- ------------------------------------------------------------------------------------------------------
1994 1993
- ------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.29 $8.50
- ------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) (.02)(b) --(b)
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments .05 1.95
- ------------------------------------------------------------------------------------------------------
Total from investment activities .03 1.95
- ------------------------------------------------------------------------------------------------------
Distributions to shareholders
- ------------------------------------------------------------------------------------------------------
From net investment income (.01) --
- ------------------------------------------------------------------------------------------------------
In excess of net investment income -- --
- ------------------------------------------------------------------------------------------------------
From net realized gain on investments (.56) (.16)
- ------------------------------------------------------------------------------------------------------
Total distributions (.57) (.16)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.75 $10.29
- ------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%) (a) 0.34 22.98*
- ------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $3,190 $2,895
- ------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) (e) .92 .72*
- ------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) (.18) (.04)*
- ------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 101.94 76.02
- ------------------------------------------------------------------------------------------------------
Average commission rate paid (c)
- ------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Reflects an expense limitation which expired on December 31, 1995. As a result of such limitation, expenses of the
fund for the period ended December 31, 1993 and the year ended December 31, 1994, reflect a per share reduction
of approximately $0.11 and $0.16, respectively. Expenses for the period ended December 31, 1995
for class A, B and M shares reflect a per share reduction of $0.04, $0.04 and $0.03, respectively.
(c) Average commission rate paid on security trades is required for fiscal periods beginning on or after
September 1, 1995.
(d) Per share net investment income (loss) has been determined on the basis of the weighted average number of
shares outstanding during the period.
(e) The ratio of expenses to average net assets for the year ended December 31, 1995 and thereafter, include
amounts paid through brokerage service and expense offset arrangements. Prior period ratios exclude these
amounts. (Note 2)
</TABLE>
Notes to financial statements
December 31, 1996
Note 1
Significant accounting policies
The Putnam Voyager Fund II (the "fund") is registered under the Investment
Company Act of 1940, as amended, as a diversified open-end management
investment company. The fund seeks long-term growth of capital by investing in
primarily a portfolio of common stocks.
The fund offers class A, class B and class M shares. Class A shares are sold
with a maximum front-end sales charge of 5.75%. Class B shares, which convert
to class A shares after approximately eight years, do not pay a front-end
sales charge, but pay a higher ongoing distribution fee than class A shares,
and are subject to a contingent deferred sales charge, if those shares are
redeemed within six years of purchase. Class M shares are sold with a maximum
front-end sales charge of 3.50% and pay an ongoing distribution fee that is
lower than class B shares and higher than class A shares.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if the
fund were liquidated. In addition, the Trustees declare separate dividends on
each class of shares.
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. 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 sale price, 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, and other investments 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. 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).
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, 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 fluctuations are included with the net
realized and unrealized gain or loss on investments. Net realized gains and
losses on foreign currency transactions represent net 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 gains and losses on foreign currency
transactions 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.
F) Federal income 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. Therefore, no provision has been made for
federal taxes on income, capital gains or unrealized appreciation of
securities held and excise tax on income and capital gains.
At December 31, 1996, the fund had a capital loss carryover of approximately
$19,033,000 available to offset future net capital gain, if any, which will
expire on December 31, 2004.
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
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.
These differences include treatment of realized losses on forward foreign
currency contracts, organization expenses, post-October loss deferrals and
losses on wash sale transactions. 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. For the year
ended December 31, 1996, the fund reclassified $4,885,347 to decrease
accumulated net investment loss and $4,885,828 to decrease paid-in-capital
with a decrease to accumulated net realized loss on investments of $481. The
calculation of net investment income per share in the financial highlights
table excludes these adjustments.
I) Unamortized organization expenses Expenses incurred by the fund in
connection with its organization, its registration with the Securities and
Exchange Commission and with various states and the initial public offering of
its shares were $17,221. These expenses are being amortized on a straight-line
basis over a five-year period. The fund will reimburse Putnam Management for
the payment of these expenses.
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 for the
quarter. Such fee is based on the following annual rates: 0.70% of the first
$500 million of average net assets, 0.60% of the next $500 million, 0.55% of
the next $500 million, 0.50% of the next $5 billion, 0.475% of the next $5
billion, 0.455% of the next $5 billion, 0.44 % of the next $5 billion and
0.43% thereafter.
The fund reimburses Putnam Management 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.
Trustees of the fund receive an annual Trustees fee of $1,070 and an
additional fee for each Trustee's meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of the
Trustees receive additional fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "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 in the fund and invested in
the fund or in other Putnam funds until distribution in accordance with the
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
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's averagmeeting 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.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the year ended December 31, 1996 fund expenses were reduced by $270,365
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.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans 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 Plans provide for payments by the fund to Putnam Mutual Funds
Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets
attributable to class A, class B and class M shares, respectively. The
Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%
and 0.75% of the average net assets attributable to class A, class B and class
M shares, respectively.
For the year ended December 31, 1996, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $1,374,998 and $79,672 from the sale
of class A and class M shares, respectively and received $249,967 in
contingent deferred sales charges from redemptions of class B shares. A
deferred sales charge of up to 1% is assessed on certain redemptions of class
A shares. For the year ended December 31, 1996, Putnam Mutual Funds Corp.,
acting as underwriter received $18,445 on class A redemptions.
Note 3
Purchases and sales of securities
During the year ended December 31, 1996, purchases and sales of investment
securities other than short-term investments aggregated $840,498,669 and
$302,993,430, respectively. There were no purchases and sales of U.S.
government obligations. In determining the net gain or loss on securities
sold, the cost of securities has been determined on the identified cost basis.
Note 4
Capital shares
At December 31, 1996, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended
December 31, 1996
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 27,332,602 $421,525,389
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- ------------------------------------------------------------
27,332,602 421,525,389
Shares
repurchased (10,677,327) (165,799,580)
- ------------------------------------------------------------
Net increase 16,655,275 $255,725,809
- ------------------------------------------------------------
Year ended
December 31, 1995
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 6,559,419 $89,096,620
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 27,847 377,316
- ------------------------------------------------------------
6,587,266 89,473,936
Shares
repurchased (1,114,390) (15,228,902)
- ------------------------------------------------------------
Net increase 5,472,876 $74,245,034
- ------------------------------------------------------------
Year ended
December 31, 1996
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 18,258,918 $279,772,492
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- ------------------------------------------------------------
18,258,918 279,772,492
Shares
repurchased (1,545,949) (23,794,078)
- ------------------------------------------------------------
Net increase 16,712,969 $255,978,414
- ------------------------------------------------------------
From October 2, 1995
(commencement of
operations) to
December 31, 1995
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 4,792,353 $65,229,944
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 18,762 254,787
- ------------------------------------------------------------
4,811,115 65,484,731
Shares
repurchased (150,643) (2,067,751)
- ------------------------------------------------------------
Net increase 4,660,472 $63,416,980
- ------------------------------------------------------------
Year ended
December 31, 1996
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 2,357,042 $36,329,365
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
- ------------------------------------------------------------
2,357,042 36,329,365
Shares
repurchased (361,673) (5,600,175)
- ------------------------------------------------------------
Net increase 1,995,369 $30,729,190
- ------------------------------------------------------------
From October 2, 1995
(commencement of
operations) to
December 31, 1995
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 444,206 $6,019,954
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,787 24,308
- ------------------------------------------------------------
445,993 6,044,262
Shares
repurchased (20,993) (289,042)
- ------------------------------------------------------------
Net increase 425,000 $5,755,220
- ------------------------------------------------------------
Results of December 5, 1996, shareholder meeting
(Unaudited)
A meeting of shareholders of the fund was held on December 5, 1996. At the
meeting, each of the nominees for Trustees was elected, as follows:
Votes
Votes for withheld
---------- --------
Jameson Adkins Baxter 20,244,047 342,277
Hans H. Estin 20,206,382 379,942
John A. Hill 20,250,412 335,912
Ronald J. Jackson 20,244,278 342,046
Elizabeth T. Kennan 20,230,912 355,412
Lawrence J. Lasser 20,255,553 330,771
Robert E. Patterson 20,250,760 335,564
Donald S. Perkins 20,244,202 342,122
William F. Pounds 20,250,429 335,895
George Putnam 20,243,379 342,945
George Putnam, III 20,234,508 351,816
Eli Shapiro 20,213,715 372,609
A.J.C. Smith 20,243,884 342,440
W. Nicholas Thorndike 20,209,717 376,607
A proposal to ratify the selection of Coopers & Lybrand L.L.P. as auditors for
the fund was approved as follows: 19,837,852 votes for, and 188,472 votes
against, with 560,000 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with respect
to investments in the securities of a single issuer was approved as follows:
17,974,478 votes for, and 812,310 votes against, with 1,799,536 abstentions
and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with respect
to making loans through purchases of debt obligations, repurchase agreements
and securities loans was approved as follows: 17,465,272 votes for, and
1,350,779 votes against, with 1,770,273 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with respect
to investments in senior securities was approved as follows: 17,953,967 votes
for, and 826,993 votes against, with 1,805,364 abstentions and broker
non-votes.
A proposal to amend the fund's fundamental investment restriction with respect
to investments in commodities or commodity contracts was approved as follows:
17,541,919 votes for, and 1,290,260 votes against, with 1,754,145 abstentions
and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investments in securities of issuers in which management of the
fund or Putnam Investment Management, Inc. owns securities was approved as
follows: 17,553,600 votes for, and 1,284,654 votes against, with 1,748,070
abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to margin transactions was approved as follows: 17,366,570 votes for,
and 1,407,835 votes against, with 1,811,919 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to short sales was approved as follows: 17,441,588 votes for, and
1,351,059 votes against, with 1,793,677 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction which
limits the fund's ability to pledge assets was approved as follows: 17,267,362
votes for, and 1,488,734 votes against, with 1,830,228 abstentions and broker
non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investments in restricted securities was approved as follows:
17,487,550 votes for, and 1,288,173 votes against, with 1,810,601 abstentions
and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investments in certain oil, gas an mineral interests was approved
as follows: 17,777,952 votes for, and 1,042,748 votes against, with 1,765,624
abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investing to gain control of a company's management was approved as
follows: 17,505,220 votes for, and 1,296,216 votes against, with 1,784,888
abstentions and broker non-votes.
All tabulations are rounded to nearest whole number.
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Fund information
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
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
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
Tim Ferguson
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Roland W. Gillis
Vice President and Fund Manager
Charles H. Swanberg
Vice President and Fund Manager
Robert R. Beck
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Voyager Fund II.
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' website: http://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 principal amount invested.
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
30599-377/2AR/2AO 2/97
