Putnam
Voyager
Fund II
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
6-30-00
[SCALE LOGO OMITTED]
FROM THE TRUSTEES
[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM, III]
Dear Shareholder:
It is a pleasure to greet you in our new roles as Chairman of the
Trustees and President of the Funds. As you know, both of us have been
members of the Board of Trustees for a number of years -- years during
which the global securities markets, the mutual fund industry, and
Putnam itself have experienced tremendous growth and change.
As we look to the future, we are certain that the changes that lie ahead
will be even more breathtaking in their scope. What will not change is
the Trustees' dedication to serving the best interests of our
shareholders.
We welcome the challenges ahead and are confident that Putnam and your
Board will continue to meet those challenges successfully, as they have
for more than 60 years. We look forward to helping you meet your
financial objectives for many years to come.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
August 16, 2000
REPORT FROM FUND MANAGEMENT
Charles H. Swanberg
Roland W. Gillis
Jeffrey R. Lindsey
The first half of 2000 has been a highly volatile period for aggressive
growth stocks. Putnam Voyager Fund II performed well in the first
calendar quarter of the year, following an excellent showing in 1999,
during which it was well positioned in many of the winning technology
sectors. These sectors corrected severely between March and May but were
recovering nicely by the end of the semiannual period on June 30, 2000.
The fund's overweight position in technology-related stocks accounted
for its underperformance of its benchmark, the Russell MidCap Index.
However, the fund's longer-term performance keeps pace with or exceeds
that of the index. Please see page 7 for details.
Total return for 6 months ended 6/30/00
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
----------------------------------------------------------------------
-2.34% -7.97% -2.72% -7.59% -2.67% -3.64% -2.58% -5.98%
----------------------------------------------------------------------
Past performance is not indicative of future results. Performance
information for longer periods and explanation of performance
calculation methods begin on page 7.
* VOLATILE PERIOD FOR GROWTH STOCKS
After the strong performance of aggressive growth stocks in the first
quarter, concerns about the cumulative effects that higher interest
rates could have on the economy and on corporate profits prompted a
severe market correction in April and May. Between June 1999 and the end
of March 2000, the Federal Reserve Board had raised the federal funds
rate, a key short-term interest-rate benchmark, six times, from 4.75% to
6.5%. In addition, the Fed made it clear in the first quarter of this
year that its concern about an overheated U.S. economy would be
reflected in continued interest-rate increases later in the year if
necessary.
Typically, higher interest rates have the most severe effect on the
prices of small- and mid-cap growth stocks because the valuations of
these companies are so closely tied to underlying earnings growth. If
there is a risk that a slower economy could affect earnings growth, the
prices of aggressive growth stocks can plummet, which is what occurred
this past spring. Nevertheless, the fund has maintained an emphasis on
the small- and mid-cap sectors of the market because we believe these
sectors continue to offer the best opportunities for long-term growth.
We were encouraged by the strong recovery that many of the fund's
holdings have experienced from mid May through the end of June.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Software 16.1%
Electronics 15.8%
Communications
equipment 11.6%
Telecommunications 8.0%
Computers 6.1%
Footnote reads:
*Based on net assets as of 6/30/00. Holdings will vary over time.
* TECHNOLOGY FOCUS STILL IN PLACE
During the semiannual period, we successfully moved out of the Internet
content, or dot-com stocks, before the market's correction, but the
portfolio continues to include positions in companies that provide
infrastructure products for the Internet, such as hardware, software,
data storage systems, computer services, and telecommunications
equipment. The fund also remains positioned to benefit from the current
boom in global telecommunications spending. Examples of holdings include
VeriSign, Inc., which provides systems that ensure secure Internet
commercial transactions and communications; Metromedia Fiber Network,
Inc., a provider of fiber-optic networks and high-bandwidth Internet
connectivity; and Brocade Communications Systems, Inc., which provides
switching systems for large-scale data storage networks.
These companies all have products in technology subsectors that are
benefiting from the boom in telecommunications, networking, and the
Internet. They all experienced price declines in the April-May
correction, but all three have recovered nicely through the end of the
fiscal period and their long-term prospects remain sound. While these
holdings and others discussed in this report were viewed favorably at
the end of the fiscal period, all holdings are subject to review and
adjustment in accordance with the fund's investment strategy and may
well vary in the future.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Brocade Communications Systems
Communications equipment
VERITAS Software Corp.
Software
VeriSign, Inc.
Computers
Redback Networks, Inc.
Communications equipment
General Electric Co.
Conglomerates
Metromedia Fiber Network, Inc.
Class A
Telecommunications
Pfizer, Inc.
Pharmaceuticals
Jabil Circuit, Inc.
Electronics
Cisco Systems, Inc.
Communications equipment
Sepracor, Inc.
Biotechnology
Footnote reads:
These holdings represent 16.2% of the fund's net assets as of 6/30/00.
Portfolio holdings will vary over time.
We do not believe it is wise to try to time the market -- especially in
a volatile sector like technology. Rather we conduct extensive
research to try and find companies with excellent fundamentals and high
rates of earnings growth that can perform over the long term. The
correction in April and May was driven primarily by macroeconomic
forces; namely, the series of interest-rate increases by the Fed, which
always affects high-growth companies. Now that the Fed appears to be in
the final stages of its tightening efforts, the market should again
recognize the value of many of these stronger companies.
While we believe the next several years should be positive for
technology companies, we expect to see an increase in volatility within
the sector. Technology has become such a large part of the U.S. and
global economies that it is now more cyclical than it was 10 to 20 years
ago. Nevertheless, the vast increase in capital spending on technology
has been and should continue to be a boon for productivity and lower
rates of inflation.
* INTERNET EUPHORIA SUBJECTED TO LAWS OF MARKET
The Internet is one of many new technology paradigms that have come
about in the past 25 years. Whenever there is an economic boom resulting
from technological innovation, there are typically periods during which
companies vie for leadership. Often, after a period of euphoria (such as
in 1999 with dot-com companies), there is a period of decline and after
a shakeout, the industry leaders emerge. Of course, it is our job to
find the companies that will prevail.
Microsoft's woes create opportunity for shareholders
Microsoft, which was one of the fund's top 10 holdings as of December 31,
1999, remains a core holding in the portfolio. When the stock tumbled in
the wake of the Justice Department antitrust trial and as part of the
technology correction, we were able to accumulate more shares at attractive
prices. We believe that the company's prospects -- whether it remains whole or
is broken up -- are fundamentally sound and that the stock is worth
holding on to. Microsoft's products still command a strong position in
the marketplace and its management team remains topnotch. Of course, we
will continue to closely monitor developments that occur and reduce or
accumulate the fund's holdings where appropriate.
One ramification of the antitrust case has been that many of Microsoft's
competitors, which are also fund holdings, have benefited from the
company's less aggressive nature as a result of the case. This has been
less of a negative for Microsoft and more of a positive for the industry
-- and for the fund holdings that have been affected.
The severe correction that we saw this spring was simply a normal part
of the competitive process in our economy, the likes of which have
occurred several times in this country's history. For example, in the
early 1980s, when the personal computer industry was in its infancy,
there were hundreds of PC manufacturers. They eventually were whittled
down to just a handful of companies that now dominate the industry. In
the automotive industry, almost exactly the same phenomenon occurred
over a longer period of time -- from the early 1900s to the 1950s.
* FUND'S STRATEGIC FOCUS IS UNCHANGED
Although the portfolio's sector weightings have changed since the end of
last year as a result of changing market valuations, the fund remains
strategically focused on technology, media, telecommunications, and
consumer companies. These sectors are still experiencing strong growth
rates, and we believe this growth should continue for several years. We
are still optimistic about the health-care industry but finding small
and midsize health-care companies that meet our criteria has become much
more of a challenge.
Midway through fiscal 2000, small- and mid-cap companies made up roughly
80% of the portfolio's holdings, but we had also taken advantage of the
fund's flexibility to invest in large-cap stocks. The remaining 20% of
holdings is invested mostly in these stocks. In terms of foreign
investments, the fund still has a few large-cap Japanese stocks, which
performed exceptionally well last year, and also owns Nokia, a
telecommunications giant that is based in Finland but operates on such a
global scale that its nationality is almost irrelevant. The fund's
mandate is to invest primarily in U.S.-based growth companies. We do not
anticipate raising the portfolio's non-U.S. weightings, currently under
8%, in any significant way.
* MARKET SENTIMENT SHIFT COULD SIGNAL LONGER-TERM STRENGTH
We believe that the Fed is in the process of successfully engineering a
soft landing for the economy through its tight monetary policy. The
market appears to have changed its sentiment from one of concern about
higher interest rates to one of relief about the removal of an inflation
threat. However, the slower economic growth that will probably result
from higher interest rates could translate into reduced rates of
earnings growth.
"We do not believe it is wise to try to time the market -- especially in
a volatile sector like technology. Rather we conduct extensive research
to try and find companies with excellent fundamentals and high rates of
earnings growth that can perform over the long term."
-- Roland W. Gillis, manager
Putnam Voyager Fund II
In our opinion, stock prices will probably remain volatile until the
variables of economic growth and inflation become clear, which may take
until the end of the summer. If the economy does stabilize and inflation
shows no signs of increasing, stock prices could potentially rally in
the fourth quarter of 2000. Many of the sectors in which the fund is
invested are beneficiaries of strong secular global growth rates and
should not be significantly affected by a minor slowdown in the U.S.
economy.
We believe that this year is an important consolidation year from the
phenomenal growth and, in some cases, extreme valuations that occurred
in 1999. Once the markets have settled down, we think that investors may
again recognize the growth opportunities that exist in the sectors we
have identified.
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 6/30/00, there is no guarantee the fund will
continue to hold these securities in the future. The fund invests a
portion of its assets in small to midsize companies. Such investments
increase the risk of greater price fluctuation.
PERFORMANCE SUMMARY
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
Voyager Fund II is designed for investors aggressively seeking long-term
growth of capital primarily through growth stocks.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 6/30/00
Class A Class B Class C Class M
(inception dates) (4/14/93) (10/2/95) (2/1/99) (10/2/95)
NAV POP NAV CDSC NAV CDSC NAV POP
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 months -2.34% -7.97% -2.72% -7.59% -2.67% -3.64% -2.58% -5.98%
---------------------------------------------------------------------------------------
1 year 51.93 43.20 50.75 45.75 50.81 49.81 51.20 45.93
---------------------------------------------------------------------------------------
5 years 256.98 236.49 243.75 241.75 244.12 244.12 248.59 236.38
Annual average 28.98 27.47 28.01 27.86 28.04 28.04 28.37 27.46
---------------------------------------------------------------------------------------
Life of fund 434.48 403.68 406.34 406.34 406.97 406.97 415.88 397.95
Annual average 26.17 25.14 25.23 25.23 25.25 25.25 25.55 24.94
---------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 6/30/00
Russell MidCap Consumer
Growth Index price index
--------------------------------------------------------------------------
6 months 12.15% 2.07%
--------------------------------------------------------------------------
1 year 48.59 3.67
--------------------------------------------------------------------------
5 years 222.22 12.98
Annual average 26.35 2.47
--------------------------------------------------------------------------
Life of fund 315.86 19.99
Annual average 21.72 2.55
--------------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be less or more than those shown. Recent returns were achieved
during favorable market conditions that may not be sustainable. Returns
for class A and class M shares reflect the current maximum initial sales
charges of 5.75% and 3.50%, respectively. Class B share returns for the
1-year and life-of-fund periods reflect the applicable contingent
deferred sales charge (CDSC), which is 5% in the first year, declines to
1% in the sixth year, and is eliminated thereafter. Returns shown for
class B and class M shares for periods prior to their inception are
derived from the historical performance of class A shares, adjusted to
reflect both the initial sales charge or CDSC, if any, currently
applicable to each class and in the case of class B and class M shares
the higher operating expenses applicable to such shares. For class C
shares, returns for periods prior to their inception are derived from
the historical performance of class A shares, adjusted to reflect both
the CDSC currently applicable to class C shares, which is 1% for the
first year and is eliminated thereafter, and the higher operating
expenses applicable to class C shares. For a portion of these periods,
the fund was offered on a limited basis and had limited assets. All
returns assume reinvestment of distributions at NAV. Investment return
and principal value will fluctuate so that an investor's shares when
redeemed may be worth more or less than their original cost.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 6/30/00
Class A Class B Class C Class M
---------------------------------------------------------------------------
Distributions (number)* -- -- -- --
---------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
---------------------------------------------------------------------------
12/31/99 $38.45 $40.80 $37.13 $38.21 $37.61 $38.97
---------------------------------------------------------------------------
6/30/00 37.55 39.84 36.12 37.19 36.64 37.97
---------------------------------------------------------------------------
*The fund did not make any distributions during this period.
TERMS AND DEFINITIONS
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.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are
subject to a contingent deferred sales charge only if the shares are
redeemed during the first year.
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 5.75% maximum 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 or C shares and assumes redemption at the
end of the period. Your fund's class B 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. The CDSC for class C shares is 1% for one
year after purchase.
COMPARATIVE BENCHMARKS
Russell MidCap Growth Index is an unmanaged list of common stocks that
is frequently used as a general measure of stock market performance.
The index assumes reinvestment of all distributions and interest
payments and does 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.
A GUIDE TO THE FINANCIAL STATEMENTS
These sections of the report constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values
as of the last day of the reporting period. Holdings are organized by
asset type and industry sector, country, or state to show areas of
concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are
subtracted from this total. The result is divided by the number of
shares to determine the net asset value per share, which is calculated
separately for each class of shares. (For funds with preferred shares,
the amount subtracted from total assets includes the net assets
allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss
for the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that
remain in the portfolio -- any change in unrealized gains or losses over
the period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number
of the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed
here may not match the sources listed in the Statement of operations
because the distributions are determined on a tax basis and may be paid
in a different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment income
ratios and portfolio turnover in one summary table, reflecting the five
most recent reporting periods. In a semiannual report, the highlight
table also includes the current reporting period. For open-end funds, a
separate table is provided for each share class.
<TABLE>
<CAPTION>
THE FUND'S PORTFOLIO
June 30, 2000 (Unaudited)
COMMON STOCKS (98.0%) (a)
NUMBER OF SHARES VALUE
<S> <C> <C> <C>
Advertising and Marketing Services (0.7%)
-------------------------------------------------------------------------------------------------------------------
131,000 DoubleClick, Inc. (NON) $ 4,994,375
79,100 Engage Technologies, Inc. (NON) 1,023,356
169,744 Lamar Advertising Co. (NON) 7,352,037
146,900 Mediaplex, Inc. (NON) 2,837,006
175,200 Omnicom Group, Inc. 15,603,750
----------------
31,810,524
Aerospace/Defense (0.3%)
-------------------------------------------------------------------------------------------------------------------
250,600 Aeroflex, Inc. (NON) 12,451,688
Airlines (0.4%)
-------------------------------------------------------------------------------------------------------------------
368,900 Ryanair Holdings, PLC ADR (Ireland) (NON) 13,464,850
62,500 SkyWest, Inc. 2,316,406
----------------
15,781,256
Banking (0.7%)
-------------------------------------------------------------------------------------------------------------------
212,300 Fifth Third Bancorp 13,427,975
91,500 State Street Corp. 9,704,719
216,029 TCF Financial Corp. 5,549,245
----------------
28,681,939
Beverage (0.3%)
-------------------------------------------------------------------------------------------------------------------
178,400 Itoen, Ltd. (Japan) 13,205,445
Biotechnology (2.8%)
-------------------------------------------------------------------------------------------------------------------
298,900 Amgen, Inc. (NON) 20,997,725
81,400 Biogen, Inc. (NON) 5,250,300
600 Biovail Corp. (Canada) (NON) 33,263
236,900 Genentech, Inc. (NON) 40,746,800
432,900 Sepracor, Inc. (NON) 52,218,563
59,700 Tanox, Inc. (NON) 2,824,556
68,772 Transkaryotic Therapies, Inc. (NON) 2,527,371
----------------
124,598,578
Broadcasting (5.6%)
-------------------------------------------------------------------------------------------------------------------
107,200 Acme Communications, Inc. (NON) 1,956,400
334,500 AMFM, Inc. (NON) 23,080,500
303,800 Citadel Communications Corp. (NON) 10,614,013
377,800 Clear Channel Communications, Inc. (NON) 28,335,000
438,600 Cox Radio, Inc. Class A (NON) 12,280,800
124,600 Echostar Communications Corp. Class A (NON) 4,125,428
472,280 Entercom Communications Corp. (NON) 23,023,650
258,400 Hispanic Broadcasting Corp. (NON) 8,559,500
786,000 Infinity Broadcasting Corp. Class A (NON) 28,639,875
196,200 Pegasus Communications Corp. (NON) 9,626,063
2,091,000 Radio One, Inc. (NON) 51,360,188
426,000 Regent Communications, Inc. (NON) 3,660,938
54,380 Salem Communications Corp. Class A (NON) 504,714
150,100 Univision Communications, Inc. Class A (NON) 15,535,350
689,332 WestWood One, Inc. (NON) 23,523,455
----------------
244,825,874
Cable Television (0.7%)
-------------------------------------------------------------------------------------------------------------------
939,800 AT&T Corp. - Liberty Media Group Class A (NON) 22,790,158
95,700 General Motors Corp. Class H (NON) 8,397,675
----------------
31,187,833
Commercial and Consumer Services (1.6%)
-------------------------------------------------------------------------------------------------------------------
490,400 Capita Group PLC (United Kingdom) 12,001,704
37,100 Capita Group PLC 144A (United Kingdom) 907,959
604,400 Cintas Corp. 22,173,925
242,600 eBay, Inc. (NON) 13,176,213
236,500 Robert Half International, Inc. (NON) 6,740,250
1,164,000 Serco Group PLC (United Kingdom) 9,072,827
147,700 TeleTech Holdings, Inc. (NON) 4,587,931
----------------
68,660,809
Communications Equipment (11.6%)
-------------------------------------------------------------------------------------------------------------------
272,300 ADC Telecommunications, Inc. (NON) 22,839,163
553,800 Brocade Communications Systems (NON) 101,613,647
839,900 Cisco Systems, Inc. (NON) 53,386,144
347,700 Comverse Technology, Inc. (NON) 32,336,100
103,200 Copper Mountain Networks, Inc. (NON) 9,094,500
143,000 Crossroads Systems, Inc. (NON) 3,610,750
167,700 Efficient Networks, Inc. (NON) 12,336,431
732,900 Finisar Corp. (NON) 19,192,819
301,290 Juniper Networks, Inc. (NON) 43,856,526
199,700 Netro Corp. (NON) 11,457,788
731,200 Nokia Oyj AB Class A, (Finland) 37,456,802
809,600 Nokia Oyj AB ADR (Finland) 40,429,400
281,100 Nortel Networks Corp. (Canada) 19,185,075
203,200 Proxim, Inc. (NON) 20,110,450
395,100 Redback Networks, Inc. (NON) 70,327,800
14,700 Sonus Networks, Inc. (NON) 2,320,763
143,900 Tellabs, Inc. (NON) 9,848,156
----------------
509,402,314
Computers (6.1%)
-------------------------------------------------------------------------------------------------------------------
132,300 Ariba, Inc. (NON) 12,971,602
322,250 Dell Computer Corp. (NON) 15,890,953
359,600 EMC Corp. (NON) 27,666,725
80,200 Excalibur Technologies Corp. (NON) 3,202,988
319,600 Gateway, Inc. (NON) 18,137,300
107,800 Inktomi Corp. (NON) 12,747,350
210,000 McAfee.com Corp. (NON) 5,473,125
2,700 Niku Corp. (NON) 91,125
520,700 Parametric Technology Corp. (NON) 5,727,700
639,000 RealNetworks, Inc. (NON) 32,309,438
364,900 Sun Microsystems, Inc. (NON) 33,183,094
231,900 Symantec Corp. (NON) 12,508,106
499,120 VeriSign, Inc. (NON) 88,094,680
----------------
268,004,186
Conglomerates (2.1%)
-------------------------------------------------------------------------------------------------------------------
1,237,500 General Electric Co. 65,587,500
598,300 Tyco International, Ltd. 28,344,463
----------------
93,931,963
Consumer Cyclicals (0.2%)
-------------------------------------------------------------------------------------------------------------------
104,100 Sony Corp. (Japan) 9,742,768
Consumer Goods (0.4%)
-------------------------------------------------------------------------------------------------------------------
125,100 Colgate-Palmolive Co. 7,490,363
209,600 Estee Lauder Cos. Class A 10,362,100
----------------
17,852,463
Consumer Services (0.4%)
-------------------------------------------------------------------------------------------------------------------
222,000 TMP Worldwide, Inc. (NON) 16,386,375
Distribution (0.5%)
-------------------------------------------------------------------------------------------------------------------
246,500 Black Box Corp. (NON) 19,515,867
Electronics (15.8%)
-------------------------------------------------------------------------------------------------------------------
164,500 Act Manufacturing, Inc. (NON) 7,638,969
96,740 Agilent Technologies, Inc. (NON) 7,134,575
260,600 Alpha Industries, Inc. (NON) 11,482,688
207,400 Altera Corp. (NON) 21,141,838
85,000 Ananex Corp. (NON) 8,117,500
188,000 Applied Micro Circuits Corp. (NON) 18,565,000
70,000 AudioCodes, Ltd. (Israel) (NON) 8,400,000
308,600 Aware, Inc. (NON) 15,777,175
100,000 Broadcom Corp. (NON) 21,893,750
52,000 Cree Research, Inc. (NON) 6,942,000
42,800 Ditech Communications Corp. (NON) 4,047,275
35,900 E-Tek Dynamics, Inc. (NON) 9,470,869
163,300 Exar Corp. (NON) 14,237,719
105,300 Flextronics International, Ltd. 7,232,794
121,400 GlobeSpan, Inc. (NON) 14,820,284
282,100 Intel Corp. 37,713,244
1,190,350 Jabil Circuit, Inc. (NON) 59,071,119
216,200 JDS Uniphase Corp. (NON) 25,916,975
581,700 Linear Technology Corp. 37,192,444
748,400 Maxim Integrated Products, Inc. (NON) 50,844,425
291,800 Micrel, Inc. (NON) 12,675,063
20,300 New Focus, Inc. (NON) 1,667,138
170,300 PMC - Sierra, Inc. (NON) 30,260,181
408,500 QLogic Corp. (NON) 26,986,531
78,000 Quantum Effect Devices, Inc. (NON) 4,446,000
192,400 RF Micro Devices, Inc. (NON) 16,859,050
424,594 Sanmina Corp. (NON) 36,302,787
140,300 SDL, Inc. (NON) 40,011,806
140,000 Semtech Corp. (NON) 10,707,813
101,800 Silicon Image, Inc. (NON) 5,077,275
450,400 Sipex Corp. (NON) 12,470,450
375,800 Texas Instruments, Inc. 25,812,763
120,000 TranSwitch Corp. (NON) 9,262,500
207,200 Virata Corp. (NON) 12,354,300
301,100 Vitesse Semiconductor Corp. (NON) 22,149,669
252,000 Xilinx, Inc. (NON) 20,805,750
245,500 Zoran Corp. (NON) 16,187,656
----------------
691,677,375
Energy (1.5%)
-------------------------------------------------------------------------------------------------------------------
35,300 Capstone Turbine Corp. (NON) 1,590,706
405,000 Global Marine, Inc. (NON) 11,415,938
758,500 Grant Prideco, Inc. (NON) 18,962,500
379,400 Nabors Industries, Inc. (NON) 15,768,813
259,800 Schlumberger, Ltd. 19,387,575
----------------
67,125,532
Entertainment (0.8%)
-------------------------------------------------------------------------------------------------------------------
136,350 SFX Entertainment, Inc. Class A (NON) 6,178,359
439,325 Viacom, Inc. Class B (NON) 29,956,473
----------------
36,134,832
Financial (1.5%)
-------------------------------------------------------------------------------------------------------------------
306,900 Intuit, Inc. (NON) 12,697,988
61,200 Marschollek, Lautenschlaeger und Partner AG (Germany) 25,749,141
53,000 Marschollek, Lautenschlaeger und Partner AG (Germany) 26,616,685
----------------
65,063,814
Health Care Services (0.5%)
-------------------------------------------------------------------------------------------------------------------
154,900 Allscripts, Inc. (NON) 3,562,700
71,300 SonoSite, Inc. (NON) 2,054,331
186,400 United Health Group, Inc. 15,983,800
----------------
21,600,831
Insurance (0.3%)
-------------------------------------------------------------------------------------------------------------------
121,100 American International Group, Inc. 14,229,250
Investment Banking/Brokerage (1.4%)
-------------------------------------------------------------------------------------------------------------------
68,600 Merrill Lynch & Co., Inc. 7,889,000
173,000 Morgan Stanley, Dean Witter, Discover and Co. 14,402,250
1,294,000 Nikko Securities Co., Ltd. (Japan) 12,844,583
291,000 Nomura Securities Co., Ltd. (Japan) 7,138,826
610,750 Schwab (Charles) Corp. 20,536,469
----------------
62,811,128
Lodging/Tourism (0.2%)
-------------------------------------------------------------------------------------------------------------------
148,700 Four Seasons Hotels, Inc. (Canada) 9,247,281
Media (0.4%)
-------------------------------------------------------------------------------------------------------------------
239,000 Time Warner, Inc. 18,164,000
Medical Technology (1.6%)
-------------------------------------------------------------------------------------------------------------------
291,400 Medtronic, Inc. 14,515,363
27,100 Minimed, Inc. (NON) 3,197,800
167,700 Novoste Corp. (NON) 10,229,700
259,300 PE Corp. 17,081,388
444,700 Stryker Corp. 19,455,625
59,300 Waters Corp. (NON) 7,401,381
----------------
71,881,257
Oil & Gas (0.4%)
-------------------------------------------------------------------------------------------------------------------
457,800 EOG Resources, Inc. 15,336,300
Pharmaceuticals (2.2%)
-------------------------------------------------------------------------------------------------------------------
128,600 Lilly (Eli) & Co. 12,843,925
1,290,825 Pfizer, Inc. 61,959,600
86,300 Pharmacia Corp. 4,460,631
233,000 Schering-Plough Corp. 11,766,500
137,600 Shire Pharmaceuticals Group PLC ADR (United Kingdom) (NON) 7,138,000
----------------
98,168,656
Publishing (0.4%)
-------------------------------------------------------------------------------------------------------------------
484,400 Information Holdings, Inc. (NON) 17,922,800
Restaurants (0.8%)
-------------------------------------------------------------------------------------------------------------------
913,700 Starbucks Corp. (NON) 34,891,919
Retail (4.2%)
-------------------------------------------------------------------------------------------------------------------
723,400 Bed Bath & Beyond, Inc. (NON) 26,223,250
109,100 Best Buy Co., Inc. (NON) 6,900,575
158,000 CDW Computer Centers, Inc. (NON) 9,875,000
298,100 Costco Wholesale Corp. (NON) 9,837,300
406,051 Dollar Tree Stores, Inc. (NON) 16,064,383
281,000 Factory 2-U Stores, Inc. (NON) 10,625,313
523,600 Home Depot, Inc. (The) 26,147,275
130,500 Kohls Corp. (NON) 7,259,063
147,890 Michaels Stores, Inc. (NON) 6,775,211
81,600 Priceline.com, Inc. (NON) 3,099,525
210,000 Seven-Eleven Japan Co., Ltd. (Japan) 17,609,189
63,400 Target Corp. 3,677,200
189,300 Tiffany & Co. 12,777,750
144,000 TJX Cos., Inc. (The) 2,700,000
107,800 Tuesday Morning Corp. (NON) 1,131,900
359,200 Wal-Mart Stores, Inc. 20,698,900
21,500 Whole Foods Market, Inc. (NON) 888,218
----------------
182,290,052
Schools (0.6%)
-------------------------------------------------------------------------------------------------------------------
150,000 Learning Tree International, Inc. (NON) 9,187,500
307,100 SmartForce Public Limited Co. ADR (Ireland) (NON) 14,740,800
----------------
23,928,300
Semiconductor (2.7%)
-------------------------------------------------------------------------------------------------------------------
333,300 Applied Materials, Inc. (NON) 30,205,313
249,500 ASM Lithography Holding N.V. (Netherlands) (NON) 11,009,188
317,600 KLA Tencor Corp. (NON) 18,599,450
466,000 LAM Research Corp. (NON) 17,475,000
420,100 LTX Corp. (NON) 14,677,244
204,000 Novellus Systems, Inc. (NON) 11,538,750
64,100 Photon Dynamics, Inc. (NON) 4,787,469
145,720 Teradyne, Inc. (NON) 10,710,420
----------------
119,002,834
Software (16.1%)
-------------------------------------------------------------------------------------------------------------------
374,400 Agile Software Corp. (NON) 26,465,400
108,800 Amdocs, Ltd. 8,350,400
107,600 BackWeb Technologies, Ltd. (Israel) (NON) 2,461,350
180,000 BMC Software, Inc. (NON) 6,567,188
858,100 BroadVision, Inc. (NON) 43,602,206
417,600 E.piphany, Inc. (NON) 44,761,500
159,000 Electronic Arts, Inc. (NON) 11,597,063
321,000 I2 Technologies, Inc. (NON) 33,469,266
201,800 Informatica Corp. (NON) 16,534,988
125,300 Interwoven, Inc. (NON) 13,781,042
12,900 ISS Group, Inc. (NON) 1,273,673
329,128 Kana Communications, Inc. (NON) 19,517,727
276,600 Lernout & Hauspie Speech Products N.V. (Belgium) (NON) 12,187,688
320,800 Macromedia, Inc. (NON) 31,017,350
117,100 Mercator Software, Inc. (NON) 8,050,625
152,600 Micromuse, Inc. (NON) 25,252,916
613,600 Microsoft Corp. (NON) (SEG) 49,088,000
205,000 Netegrity, Inc. (NON) 15,439,063
549,400 Oracle Corp. (NON) 46,183,938
383,000 Peregrine Systems, Inc. (NON) 13,285,313
243,000 Phone.com, Inc. (NON) 15,825,375
302,400 Portal Software, Inc. (NON) 19,315,800
242,900 Quest Software, Inc. (NON) 13,450,588
167,200 Rational Software Corp. (NON) 15,539,150
550,300 Sage Group (The) PLC (United Kingdom) 4,455,903
66,000 Siebel Systems, Inc. (NON) 10,795,125
179,300 Software.com, Inc. (NON) 23,286,588
825,100 VERITAS Software Corp. (NON) 93,249,192
585,600 Vignette Corp. (NON) 30,460,350
340,000 Vitria Technology, Inc. (NON) 20,782,500
185,950 webMethods, Inc. (NON) 29,229,016
----------------
705,276,283
Technology Services (4.1%)
-------------------------------------------------------------------------------------------------------------------
199,800 America Online, Inc. (NON) 10,539,450
349,900 Breakaway Solutions, Inc.
(acquired 5/24/00, cost $5,891,600) (NON) (RES) 8,835,480
585,700 CheckFree Holdings Corp. (NON) 30,200,156
396,000 CNET Networks, Inc. (NON) 9,726,750
106,400 Digex, Inc. (NON) 7,228,550
170,200 Go2Net, Inc. (NON) 8,563,188
347,200 InfoSpace.com, Inc. (NON) 19,182,800
244,900 Predictive Systems, Inc. (NON) 8,801,094
328,000 Proxicom, Inc. (NON) 15,703,000
421,700 Rare Medium Group, Inc. (NON) 6,668,131
235,600 Scient Corp. (NON) 10,396,207
228,800 Viant Corp. (NON) 6,778,200
127,300 Wireless Facilities, Inc. (NON) 6,484,344
200,100 Yahoo! Inc. (NON) 24,787,388
487,000 YouthStream Media Networks, Inc. (NON) 2,891,563
120,000 Zamba Corp. (NON) 660,000
----------------
177,446,301
Telecommunications (8.0%)
-------------------------------------------------------------------------------------------------------------------
346,300 Allegiance Telecom, Inc. (NON) 22,163,200
311,700 American Tower Corp. Class A (NON) 12,993,994
312,600 Covad Communications Group, Inc. (NON) 5,040,675
255,700 Focal Communications Corp. (NON) 9,253,144
340,000 Global Crossing Ltd. 8,946,250
2,900 GT Group Telecom, Inc. (Canada) (NON) 45,856
556,000 ICG Communications, Inc. (NON) 12,266,750
129,500 Level 3 Communication, Inc. (NON) 11,396,000
130,000 Liberty Digital, Inc. Class A (NON) 3,900,000
16,800 Marvell Technology Group Ltd. 957,600
1,491,600 McLeodUSA, Inc. Class A (NON) 30,857,475
1,602,800 Metromedia Fiber Network, Inc. Class A (NON) 63,611,094
165,500 Next Level Communications, Inc. (NON) 14,191,625
313,600 Nextel Communications, Inc. Class A (NON) 19,188,400
936,492 Nextlink Communications, Inc. Class A (NON) 35,528,165
124,544 NTL, Inc. (NON) 7,457,072
348,700 Pinnacle Holdings, Inc. (NON) 18,829,800
420,500 SBA Communications Corp. (NON) 21,839,719
398,500 Sprint Corp. (NON) 23,710,753
368,800 Vodafone AirTouch PLC (United Kingdom) 15,282,150
125,600 VoiceStream Wireless Corp. (NON) 14,606,888
----------------
352,066,610
Transportation Services (0.1%)
-------------------------------------------------------------------------------------------------------------------
78,900 United Parcel Service, Inc. 4,655,100
----------------
Total Common Stocks (cost $2,997,701,232) $ 4,294,960,337
SHORT-TERM INVESTMENTS (2.5%) (a)
PRINCIPAL AMOUNT VALUE
-------------------------------------------------------------------------------------------------------------------
$52,518,000 Interest in $750,000,000 joint repurchase agreement
dated June 30, 2000 with Goldman Sachs & Co.
due July 3, 2000 with respect to various U.S. Treasury
obligations -- maturity value of $52,546,447 for an
effective yield of 6.5% $ 52,518,000
56,354,000 Interest in $500,000,000 joint repurchase agreement
dated June 30, 2000 with S.B.C. Warburg, Inc.
due July 3, 2000 with respect to various U.S. Treasury
obligations -- maturity value of $56,384,995 for an
effective yield of 6.6% 56,354,000
----------------
Total Short-Term Investments (cost $108,872,000) $ 108,872,000
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $3,106,573,232) (b) $ 4,403,832,337
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $4,384,462,650.
(b) The aggregate identified cost on a tax basis is $3,111,190,609,
resulting in gross unrealized appreciation and depreciation of
$1,566,107,684 and $273,465,956, respectively, or net unrealized
appreciation of $1,292,641,728.
(NON) Non-income-producing security.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at June 30, 2000 was
$8,835,480 or 0.2% of net assets.
(SEG) A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts at June 30,
2000.
144A after the name of a security represents those exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
ADR after the name of a foreign holding stands for American
Depositary Receipts representing ownership of foreign securities on
deposit with a domestic custodian bank.
------------------------------------------------------------------------------
Futures Contracts Outstanding at June 30, 2000 (Unaudited)
Aggregate Face Expiration Unrealized
Total Value Value Date Depreciation
------------------------------------------------------------------------------
S&P 500 Index (Long) $26,792,825 $27,187,588 Sep-00 $(394,763)
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $3,106,573,232) (Note 1) $4,403,832,337
-------------------------------------------------------------------------------------------
Cash 7,722,741
-------------------------------------------------------------------------------------------
Dividends, interest and other receivables 386,877
-------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 14,522,051
-------------------------------------------------------------------------------------------
Receivable for securities sold 42,496,034
-------------------------------------------------------------------------------------------
Receivable for variation margin 181,734
-------------------------------------------------------------------------------------------
Total assets 4,469,141,774
Liabilities
-------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 1,465
-------------------------------------------------------------------------------------------
Payable for securities purchased 70,405,513
-------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 4,867,134
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 5,392,097
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 635,516
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 67,172
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 7,667
-------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 2,945,296
-------------------------------------------------------------------------------------------
Other accrued expenses 357,264
-------------------------------------------------------------------------------------------
Total liabilities 84,679,124
-------------------------------------------------------------------------------------------
Net assets $4,384,462,650
Represented by
-------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $2,854,006,480
-------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (22,433,731)
-------------------------------------------------------------------------------------------
Accumulated net realized gain on investments
and foreign currency transactions (Note 1) 256,407,096
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 1,296,482,805
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $4,384,462,650
Computation of net asset value and offering price
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($2,122,442,550 divided by 56,521,383 shares) $37.55
-------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $37.55)* $39.84
-------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($1,925,325,011 divided by 53,300,570 shares)** $36.12
-------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($155,145,141 divided by 4,171,731 shares)** $37.19
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($181,549,948 divided by 4,955,443 shares) $36.64
-------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $36.64)* $37.97
-------------------------------------------------------------------------------------------
* 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
Six months ended June 30, 2000 (Unaudited)
<S> <C>
Investment income:
-------------------------------------------------------------------------------------------
Dividends (net of foreign tax $117,929) $ 2,265,874
-------------------------------------------------------------------------------------------
Interest 2,180,297
-------------------------------------------------------------------------------------------
Total investment income 4,446,171
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 10,886,457
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 2,764,980
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 28,450
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 17,600
-------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 2,430,672
-------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 8,756,633
-------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 594,634
-------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 667,470
-------------------------------------------------------------------------------------------
Other 1,101,053
-------------------------------------------------------------------------------------------
Total expenses 27,247,949
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (368,047)
-------------------------------------------------------------------------------------------
Net expenses 26,879,902
-------------------------------------------------------------------------------------------
Net investment loss (22,433,731)
-------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 150,454,827
-------------------------------------------------------------------------------------------
Net realized loss on future contracts (Note 1) (574,044)
-------------------------------------------------------------------------------------------
Net realized gain on foreign currency transactions (Note 1) 298,359
-------------------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities
in foreign currencies during the period (314,069)
-------------------------------------------------------------------------------------------
Net unrealized depreciation of investments and futures during the period (274,352,093)
-------------------------------------------------------------------------------------------
Net loss on investments (124,487,020)
-------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $(146,920,751)
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
June 30 December 31
2000* 1999
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment loss $ (22,433,731) $ (21,206,262)
--------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 150,179,142 296,168,356
--------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies (274,666,162) 1,124,948,129
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (146,920,751) 1,399,910,223
--------------------------------------------------------------------------------------------------
Distributions to shareholders:
--------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (85,402,662)
--------------------------------------------------------------------------------------------------
Class B -- (80,535,688)
--------------------------------------------------------------------------------------------------
Class C -- (3,713,864)
--------------------------------------------------------------------------------------------------
Class M -- (9,081,113)
--------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 1,115,533,939 657,805,994
--------------------------------------------------------------------------------------------------
Total increase in net assets 968,613,188 1,878,982,890
Net assets
--------------------------------------------------------------------------------------------------
Beginning of period 3,415,849,462 1,536,866,572
--------------------------------------------------------------------------------------------------
End of period (including accumulated net investment
loss of $22,433,731 and $--, respectively) $4,384,462,650 $3,415,849,462
--------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS A
----------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share June 30
operating performance (Unaudited) Year ended December 31
----------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $38.45 $22.70 $19.11 $15.51 $14.40 $9.75
----------------------------------------------------------------------------------------------------------------
Investment operations
----------------------------------------------------------------------------------------------------------------
Net investment loss (c) (.14) (.19) (.12) (.10) (.11) (.01)(b)
----------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.76) 18.10 4.54 3.73 1.22 4.88
----------------------------------------------------------------------------------------------------------------
Total from
investment operations (.90) 17.91 4.42 3.63 1.11 4.87
----------------------------------------------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------------------------------------------
From net
investment income -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- -- -- (.10)
----------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (2.16) (.83) (.03) -- (.12)
----------------------------------------------------------------------------------------------------------------
Total distributions -- (2.16) (.83) (.03) -- (.22)
----------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $37.55 $38.45 $22.70 $19.11 $15.51 $14.40
----------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (2.34)* 79.90 23.52 23.42 7.71 50.14
----------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,122,443 $1,663,371 $753,319 $532,287 $348,261 $83,526
----------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(d) .49* 1.03 1.12 1.22 1.44 1.31(b)
----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.37)* (.71) (.59) (.58) (.69) (.28)(b)
----------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 48.78* 89.74 91.61 73.73 68.95 49.81
----------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Reflects an expense limitation which expired on December 31, 1995.
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) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS B
----------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share June 30 Oct. 2, 1995+
operating performance (Unaudited) Year ended December 31 to Dec. 31
----------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $37.13 $22.13 $18.78 $15.36 $14.37 $13.08
----------------------------------------------------------------------------------------------------------------
Investment operations
----------------------------------------------------------------------------------------------------------------
Net investment loss (c) (.27) (.38) (.27) (.22) (.22) (.04)(b)
----------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.74) 17.54 4.45 3.67 1.21 1.40
----------------------------------------------------------------------------------------------------------------
Total from
investment operations (1.01) 17.16 4.18 3.45 .99 1.36
----------------------------------------------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------------------------------------------
From net
investment income -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- -- -- (.03)
----------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (2.16) (.83) (.03) -- (.04)
----------------------------------------------------------------------------------------------------------------
Total distributions -- (2.16) (.83) (.03) -- (.07)
----------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $36.12 $37.13 $22.13 $18.78 $15.36 $14.37
----------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
----------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (2.72)* 78.56 22.66 22.48 6.89 10.41*
----------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,925,325 $1,505,719 $699,040 $496,501 $328,268 $66,978
----------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(d) .87* 1.78 1.87 1.97 2.19 .54(b)*
----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.75)* (1.46) (1.34) (1.33) (1.45) (.29)(b)*
----------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 48.78* 89.74 91.61 73.73 68.95 49.81
----------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Reflects an expense limitation which expired on December 31, 1995.
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) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS C
---------------------------------------------------------------------
Six months
ended For the period
Per-share June 30 Feb. 1, 1999+
operating performance (Unaudited) to Dec. 31
---------------------------------------------------------------------
2000 1999
---------------------------------------------------------------------
Net asset value,
beginning of period $38.21 $23.95
---------------------------------------------------------------------
Investment operations
---------------------------------------------------------------------
Net investment loss (c) (.28) (.38)
---------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.74) 16.80
---------------------------------------------------------------------
Total from
investment operations (1.02) 16.42
---------------------------------------------------------------------
Less distributions
---------------------------------------------------------------------
From net
investment income -- --
---------------------------------------------------------------------
In excess of net
investment income -- --
---------------------------------------------------------------------
From net realized gain
on investments -- (2.16)
---------------------------------------------------------------------
Total distributions -- (2.16)
---------------------------------------------------------------------
Net asset value,
end of period $37.19 $38.21
---------------------------------------------------------------------
Ratios and supplemental data
---------------------------------------------------------------------
Total return at
net asset value (%)(a) (2.67)* 69.50*
---------------------------------------------------------------------
Net assets, end of period
(in thousands) $155,145 $76,097
---------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(d) .87* 1.63*
---------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.75)* (1.34)*
---------------------------------------------------------------------
Portfolio turnover (%) 48.78* 89.74
---------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Reflects an expense limitation which expired on December 31, 1995.
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) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during
the period.
(d) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS M
------------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share June 30 Oct. 2, 1995+
operating performance (Unaudited) Year ended December 31 to Dec. 31
------------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $37.61 $22.34 $18.91 $15.42 $14.39 $13.08
------------------------------------------------------------------------------------------------------------------
Investment operations
------------------------------------------------------------------------------------------------------------------
Net investment loss (c) (.23) (.32) (.22) (.18) (.19) --(b)
------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.74) 17.75 4.48 3.70 1.22 1.38
------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.97) 17.43 4.26 3.52 1.03 1.38
------------------------------------------------------------------------------------------------------------------
Less distributions
------------------------------------------------------------------------------------------------------------------
From net
investment income -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- -- -- (.03)
------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (2.16) (.83) (.03) -- (.04)
------------------------------------------------------------------------------------------------------------------
Total distributions -- (2.16) (.83) (.03) -- (.07)
------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $36.64 $37.61 $22.34 $18.91 $15.42 $14.39
------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) (2.58)* 79.04 22.92 22.84 7.16 10.57*
------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $181,550 $170,662 $84,507 $59,643 $37,325 $6,115
------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(d) .74* 1.53 1.62 1.72 1.94 .47(b)*
------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss
to average net assets (%) (.62)* (1.21) (1.09) (1.08) (1.20) (.21)(b)*
------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 48.78* 89.74 91.61 73.73 68.95 49.81
------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Reflects an expense limitation which expired on December 31, 1995.
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) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(d) Includes amounts paid through brokerage service and expense offset
arrangements (Note 2).
</TABLE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
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, class C 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 C shares are subject to the same fees and expenses as
class B shares, except that class C shares have a one-year 1.00%
contingent deferred sales charge and do not convert to class A shares.
Class M shares are sold with a maximum front end sales charge of 3.50%
and pay an ongoing distribution fee that is higher than class A shares
but lower than class B and class C 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 that 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 of the financial statements and the reported
amounts of increases and decreases in net assets from operations during
the reporting period. Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are
readily available are stated at market value, which is determined using
the last reported sales price on its principal exchange, or if no sales
are reported -- as in the case of some securities traded
over-the-counter -- the last reported bid price. Securities quoted in
foreign currencies are translated into U.S. dollars at the current
exchange rate. Short-term investments having remaining maturities of 60
days or less are stated at amortized cost, which approximates market
value. Other investments, including restricted securities, are stated at
fair value following procedures approved by the Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested
cash balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Investment Management, Inc. ("Putnam Management"), the fund's
manager, a wholly-owned subsidiary of Putnam Investments, Inc. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the
market value of which at the time of purchase is required to be in an
amount at least equal to the resale price, including accrued interest.
Collateral for certain tri-party repurchase agreements is held at the
counterparty's custodian in a segregated account for the benefit of the
fund and the counterparty. Putnam Management is responsible for
determining that the value of these underlying securities is at all
times at least equal to the resale price, including accrued interest.
D) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order to buy
or sell is executed). Gains or losses on securities sold are determined
on the identified cost basis.
Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date except that certain dividends from
foreign securities are recorded as soon as the fund is informed of the
ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, and other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The
fund does not isolate that portion of realized or unrealized gains or
losses resulting from changes in the foreign exchange rate on
investments from fluctuations arising from changes in the market prices
of the securities. Such gains and losses are included with the net
realized and unrealized gain or loss on investments. Net realized gains
and losses on foreign currency transactions represent net realized
exchange gains or losses on closed forward currency contracts,
disposition of foreign currencies and the difference between the amount
of investment income and foreign withholding taxes recorded on the
fund's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized appreciation and depreciation of assets and
liabilities in foreign currencies arise from changes in the value of
open forward currency contracts and assets and liabilities other than
investments at the period end, resulting from changes in the exchange
rate. Investments in foreign securities involve certain risks, including
those related to economic instability, unfavorable political
developments, and currency fluctuations, not present with domestic
investments.
F) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund
owns or expects to purchase. The fund may also write options on
securities it owns or in which it may invest to increase its current
returns.
The potential risk to the fund is that the change in value of futures
and options contracts may not correspond to the change in value of the
hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparty to the contract is
unable to perform. When the contract is closed, the fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was
closed. Realized gains and losses on purchased options are included in
realized gains and losses on investment securities.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded options
are valued at the last sale price, or if no sales are reported, the last
bid price for purchased options and the last ask price for written
options. Options traded over-the-counter are valued using prices
supplied by dealers.
G) Line of credit The fund has entered into a committed line of credit
with certain banks. This line of credit agreement includes restrictions
that the fund maintain an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the six months
ended June 30, 2000, the fund had no borrowings against the line of
credit.
H) Federal taxes It is the policy of the fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. It is also the intention of the fund to distribute
an amount sufficient to avoid imposition of any excise tax under Section
4982 of the Internal Revenue Code of 1986, as amended. Therefore, no
provision has been made for federal taxes on income, capital gains or
unrealized appreciation on securities held nor for excise tax on income
and capital gains.
I) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid at least annually. The amount and character of income and gains
to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles. Reclassifications are made to the fund's capital accounts to
reflect income and gains available for distribution (or available
capital loss carryovers) under income tax regulations.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net assets of
the fund. Such fee is based on the following annual rates: 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 an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The
aggregate amount of all such reimbursements is determined annually by
the Trustees.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor
Services, a division of PFTC.
Under the subcustodian contract between the subcustodian bank and PFTC,
the subcustodian bank has a lien on the securities of the fund to the
extent permitted by the fund's investment restrictions to cover any
advances made by the subcustodian bank for the settlement of securities
purchased by the fund. At June 30, 2000, the payable to the subcustodian
bank represents the amount due for cash advance for the settlement of a
security purchased.
For the six months ended June 30, 2000, fund expenses were reduced by
$368,047 under expense offset arrangements with PFTC and brokerage
service arrangements. Investor servicing and custodian fees reported in
the Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered
into such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $2,934
has been allocated to the fund, and an additional fee for each Trustees
meeting attended. Trustees receive additional fees for attendance at
certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
invested in certain Putnam funds until distribution in accordance with
the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and
meeting fees for the three years preceding retirement. Pension expense
for the fund is included in Compensation of Trustees in the Statement of
operations. Accrued pension liability is included in Payable for
compensation of Trustees in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B, class C 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 Retail Management, Inc., 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 Retail Management, Inc. at an annual rate up to
0.35%, 1.00%, 1.00% and 1.00% of the average net assets attributable to
class A, class B, class C and class M shares, respectively. The Trustees
have approved payment by the fund at an annual rate of 0.25%, 1.00%,
1.00% and 0.75% of the average net assets attributable to class A, class
B, class C and class M shares, respectively.
For the six months ended June 30, 2000, Putnam Retail Management, Inc.,
acting as underwriter received net commissions of $1,835,736 and $59,589
from the sale of class A and class M shares, respectively, and received
$771,660 and $16,322 in contingent deferred sales charges from
redemptions of class B and class C shares, respectively. A deferred
sales charge of up to 1% is assessed on certain redemptions of class A
shares. For the six months ended June 30, 2000, Putnam Retail
Management, Inc., acting as underwriter received $4,100 on class A
redemptions.
Note 3
Purchases and sales of securities
During the six months ended June 30, 2000, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $3,017,499,136 and $1,913,511,322, respectively.
There were no purchases and sales of U.S. government obligations.
Note 4
Capital shares
At June 30, 2000, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended June 30, 2000
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 20,331,474 $797,176,225
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
20,331,474 797,176,225
Shares
repurchased (7,074,112) (270,435,653)
---------------------------------------------------------------------------
Net increase 13,257,362 $526,740,572
---------------------------------------------------------------------------
Year ended December 31, 1999
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 17,735,558 $493,996,704
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 2,367,568 82,449,807
---------------------------------------------------------------------------
20,103,126 576,446,511
Shares
repurchased (10,028,805) (266,866,656)
---------------------------------------------------------------------------
Net increase 10,074,321 $309,579,855
---------------------------------------------------------------------------
Six months ended June 30, 2000
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 19,282,146 $730,465,407
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
19,282,146 730,465,407
Shares
repurchased (6,534,031) (243,659,231)
---------------------------------------------------------------------------
Net increase 12,748,115 $486,806,176
---------------------------------------------------------------------------
Year ended December 31, 1999
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 15,759,777 $431,528,199
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 2,214,594 74,509,134
---------------------------------------------------------------------------
17,974,371 506,037,333
Shares
repurchased (9,015,320) (237,554,812)
---------------------------------------------------------------------------
Net increase 8,959,051 $268,482,521
---------------------------------------------------------------------------
Six months ended June 30, 2000
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 2,837,557 $110,154,535
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
2,837,557 110,154,535
Shares
repurchased (657,121) (24,146,306)
---------------------------------------------------------------------------
Net increase 2,180,436 $ 86,008,229
---------------------------------------------------------------------------
For the period February 1, 1999
(commencement of operations)
to December 31, 1999
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 2,219,919 $61,369,858
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 101,541 3,516,354
---------------------------------------------------------------------------
2,321,460 64,886,212
Shares
repurchased (330,165) (8,337,615)
---------------------------------------------------------------------------
Net increase 1,991,295 $56,548,597
---------------------------------------------------------------------------
Six months ended June 30, 2000
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 1,317,294 $49,815,454
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions -- --
---------------------------------------------------------------------------
1,317,294 49,815,454
Shares
repurchased (899,882) (33,836,492)
---------------------------------------------------------------------------
Net increase 417,412 $15,978,962
---------------------------------------------------------------------------
Year ended December 31, 1999
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 2,240,671 $57,924,106
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 257,778 8,784,830
---------------------------------------------------------------------------
2,498,449 66,708,936
Shares
repurchased (1,743,600) (43,513,915)
---------------------------------------------------------------------------
Net increase 754,849 $23,195,021
---------------------------------------------------------------------------
THE PUTNAM FAMILY OF FUNDS
The following is a complete list of Putnam's open-end mutual funds.
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.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Century Growth Fund
New Opportunities Fund
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Technology Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Fund
Balanced Retirement Fund
Classic Equity Fund *
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market 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
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION 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
* Formerly Putnam Growth and Income Fund II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at
www.putnaminvestments.com.
FUND INFORMATION
WEB SITE
www.putnaminvestments.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management, Inc.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
John A. Hill, Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam, III
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Stephen Oristaglio
Vice President
Daniel L. Miller
Vice President
Charles H. Swanberg
Vice President and Fund Manager
Roland W. Gillis
Vice President and Fund Manager
Jeffrey R. Lindsey
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam 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' Web site:
www.putnaminvestments.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution; are not insured by the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board,
or any other agency; and involve risk, including the possible loss of
the principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
---------------------
PRST STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminvestments.com
SA017-63296-377/2AR/2AO 8/00
