-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TK+55Alys095rdPQaXJtLuVaDgfbizg5XEA5IFmxDpLSo53RN7gtR4q+GOPQ7tyI MEHu30sZ8rTUnpliG/KQjw== 0000928816-00-000191.txt : 20000413 0000928816-00-000191.hdr.sgml : 20000413 ACCESSION NUMBER: 0000928816-00-000191 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000229 FILED AS OF DATE: 20000412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM FUNDS TRUST CENTRAL INDEX KEY: 0001005942 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07513 FILM NUMBER: 599042 BUSINESS ADDRESS: STREET 1: ONE POST STREET 2: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6172921010 MAIL ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 N-30D 1 PUTNAM ASIA PACIFIC FUND II Putnam Asia Pacific Fund II SEMIANNUAL REPORT ON PORTFOLIO AND PERFORMANCE 2-29-00 [SCALE LOGO OMITTED] The following report contains a list of your fund's portfolio holdings and complete financial statements for the six months ended 2/29/00. Additional details, including fund strategy, performance, and managers' outlook, will be provided in the annual report, which will cover the 12 months ended 8/31/00.
The fund's portfolio February 29, 2000 (Unaudited) COMMON STOCKS (94.5%) (a) NUMBER OF SHARES VALUE Hong Kong (28.8%) - -------------------------------------------------------------------------------------------------------------------------- 15,000 Cheung Kong Holdings $ 199,491 22,000 China Telecom Ltd. (NON) 202,125 5,000 Citic Pacific Ltd. 25,185 70,000 Culturecom Holdings Ltd. (NON) 20,688 58,000 e-New Media Co. Ltd. (NON) 20,495 6,000 Hang Seng Bank Ltd. 54,161 40,400 Hong Kong Telecommunications Ltd. 134,713 20,000 Hutchison Whampoa, Ltd. 313,532 11,000 Johnson Electric Holdings Ltd. 72,440 16,000 Li & Fung Ltd. 62,295 19,000 Pacific Century CyberWorks Ltd. (NON) 54,078 14,000 Sun Hung Kai Properties Ltd. 126,377 -------------- 1,285,580 India (17.4%) - -------------------------------------------------------------------------------------------------------------------------- 500 Cipla Ltd. 12,898 900 Global Tele-Systems Ltd. 43,039 1,500 Himachal Futuristic Commun Ltd. 60,382 700 Hindustan Lever Ltd. 46,549 400 Hughes Software Systems (NON) 29,642 2,000 ICICI Ltd. ADR (NON) 74,000 380 Infosys Technologies Ltd. 75,848 1,600 ITC ltd. GDR 36,400 2,600 Mahindra & Mahindra GDR (NON) 33,280 400 Pentamedia Graphics Ltd. GDR 23,700 2,000 Reliance Industries GDS 39,500 500 Satyam Computer Services Ltd. 57,900 500 Satyam Infoway Ltd. ADR 47,375 400 Software Solution 51,906 1,300 Videsh Sanchar Nigam Ltd. GDR 47,775 160 VisualSoft Ltd. 33,020 89 Wipro Corp. Ltd. 10,694 1,800 Zee Telefilms Ltd. (NON) 53,957 -------------- 777,865 Indonesia (0.4%) - -------------------------------------------------------------------------------------------------------------------------- 40,000 PT Astra International Inc. 19,865 Malaysia (4.3%) - -------------------------------------------------------------------------------------------------------------------------- 9,000 Commerce Asset-Holding Berhad 28,184 23,000 Malaysian Resources Corp. 28,447 26,000 Public Bank Berhad 28,737 7,000 Resorts World Berhad 25,421 8,000 Tanjong PLC 20,105 4,000 Telekom Malaysia 16,947 4,000 Tenaga Nasional Berhad 13,263 3,000 Unisem Berhad 28,421 -------------- 189,525 Singapore (7.5%) - -------------------------------------------------------------------------------------------------------------------------- 4,000 City Developments Ltd. 16,243 3,000 Datacraft Asia Ltd. 25,350 5,815 DBS Group Holdings Ltd. 71,853 8,000 JIT Holdings Ltd. 25,757 6,250 Oversea-Chinese Banking Corp. Ltd. 39,520 4,000 Singapore Airlines 37,127 1,600 Singapore Press Holdings Ltd. 30,630 4,801 United Overseas Bank Ltd. 30,358 4,000 Venture Manufacturing Ltd. 60,100 -------------- 336,938 South Korea (19.0%) - -------------------------------------------------------------------------------------------------------------------------- 275 Cheil Communications, Inc. 34,773 100 Daum Communications Corp. (NON) 16,270 140 Digital Chosun Co. Ltd. 32,806 400 Dreamline Corp. 52,878 900 Hannsoft Inc. (NON) 32,311 70 Housing & Commercial Bank 1,247 2,100 Kookmin Bank 144A 23,397 2,000 Korea Electric Power Corp. 50,049 1,800 LG Investment and Securities 32,151 200 Locus Corp. (NON) 42,356 500 Opicom Co. Ltd. (NON) 37,492 210 Pohang Iron & Steel Company, Ltd. 22,775 350 Samsung Electronics 144A GDR 46,550 640 Samsung Electronics Co. 144,876 650 Samsung Securities Co. Ltd. 19,887 400 Sansung Electro-Mechanics Co. 24,264 230 Serome Technology, Inc. 29,083 2,100 Shinhan Bank 20,055 3,424 SK Telecom Co., Ltd. ADR 153,866 2,400 Will-Bes & Co. (The) 29,393 -------------- 846,479 Taiwan (14.3%) - -------------------------------------------------------------------------------------------------------------------------- 1,750 Acer Inc. 23,800 5,535 Advanced Semiconductor Engineering Inc. 18,522 3,003 Asustek Computer, Inc. GDR 37,550 21,000 Bank Sinopac 14,466 683 China Steel Corp. GDR 144A 10,920 16,080 Chinatrust Commercial Bank 17,324 10,000 Far Eastern Textile Ltd. 21,874 9,000 Formosa Plastics Corp. 19,834 500 GigaMedia Ltd. (NON) 35,031 6,200 Hon Hai Precision Industry 57,891 12,000 K Laser Technology, Inc. 35,651 6,900 President Chain Store Corp. 30,186 3,000 Synnex Technology Intl. Corp. 21,058 17,700 Taishin Intl. Bank 11,904 26,600 Taiwan Semiconductor Manufacturing Co. 174,554 24,400 United Microelectronics Corp. 89,618 16,000 United World Chinese Commercial Bank Corp. 20,268 -------------- 640,451 Thailand (2.8%) - -------------------------------------------------------------------------------------------------------------------------- 1,300 Advanced Info Service Public Co., Ltd. (NON) 20,210 2,500 Bec World Public Co. Ltd. 18,776 28,300 Big C Supercenter PLC (NON) 11,891 2,000 Shin Corp. PLC (NON) 15,863 950 Siam Cement Public Company Ltd. (The) (NON) 17,164 3,500 Siam City Cement Co. Ltd. 11,765 14,000 TelecomAsia Corporation Public Co. Ltd. (NON) 19,485 12,000 Thai Farmers Bank Public Co. (NON) 11,345 -------------- 126,499 -------------- Total Common Stocks (cost $2,613,815) $ 4,223,202 CONVERTIBLE PREFERRED STOCKS (0.2%) (a) (cost $12,215) NUMBER OF SHARES VALUE - -------------------------------------------------------------------------------------------------------------------------- 15,800 Siam Commercial Bank Public Co. Ltd. 144A $5.25 cv. pfd. $ 9,543 UNITS (0.7%) (a) (cost $44,789) NUMBER OF UNITS VALUE - -------------------------------------------------------------------------------------------------------------------------- 200 Wipro Ltd. Structured Note (Issued by Goldman Sachs Group Inc.) zero %, 2001 (India) $ 30,248 - -------------------------------------------------------------------------------------------------------------------------- Total Investments (cost $2,670,819) (b) $ 4,262,993 - -------------------------------------------------------------------------------------------------------------------------- (a) Percentages indicated are based on net assets of $4,469,977. (b) The aggregate identified cost on a tax basis is $2,714,613, resulting in gross unrealized appreciation and depreciation of $1,671,558 and $123,178, respectively, or net unrealized appreciation of $1,548,380. (NON) Non-income-producing security. 144A after the name of a security represents those exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. ADR, GDR or GDS after the name of a foreign holding stands for American Depositary Receipts, Global Depositary Receipts and Global Depositary Shares, respectively, representing ownership of foreign securities on deposit with a domestic custodian bank. The fund had the following industry group concentrations greater than 10% at February 29, 2000 (as a percentage of net assets): Electronics and electrical equipment 15.1% Computer services and software 12.8 Insurance and finance 12.3 The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities February 29, 2000 (Unaudited) Assets - ----------------------------------------------------------------------------------------------- Investments in securities, at value (identified cost $2,670,819) (Note 1) $4,262,993 - ----------------------------------------------------------------------------------------------- Cash 147,482 - ----------------------------------------------------------------------------------------------- Foreign currency (cost $91,903) 92,100 - ----------------------------------------------------------------------------------------------- Dividends receivable 1,077 - ----------------------------------------------------------------------------------------------- Receivable for securities sold 202,388 - ----------------------------------------------------------------------------------------------- Total assets 4,706,040 Liabilities - ----------------------------------------------------------------------------------------------- Payable for securities purchased 180,499 - ----------------------------------------------------------------------------------------------- Payable for compensation of Manager (Note 2) 3,765 - ----------------------------------------------------------------------------------------------- Payable for investor servicing and custodian fees (Note 2) 899 - ----------------------------------------------------------------------------------------------- Payable for compensation of Trustees (Note 2) 679 - ----------------------------------------------------------------------------------------------- Payable for administrative services (Note 2) 7 - ----------------------------------------------------------------------------------------------- Other accrued expenses 50,214 - ----------------------------------------------------------------------------------------------- Total liabilities 236,063 - ----------------------------------------------------------------------------------------------- Net assets $4,469,977 Represented by - ----------------------------------------------------------------------------------------------- Paid-in capital (Notes 1 and 4) $2,705,974 - ----------------------------------------------------------------------------------------------- Accumulated net investment loss (Note 1) (21,177) - ----------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions (Note 1) 220,572 - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 1,564,608 - ----------------------------------------------------------------------------------------------- Total -- Representing net assets applicable to capital shares outstanding $4,469,977 Computation of net asset value and offering price - ----------------------------------------------------------------------------------------------- Net asset value and redemption price per class A share ($4,469,977 divided by 306,104 shares) $14.60 - ----------------------------------------------------------------------------------------------- Offering price per class A share (100/94.25 of $14.60) $15.49 - ----------------------------------------------------------------------------------------------- * On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales, the offering price is reduced The accompanying notes are an integral part of these financial statements.
Statement of operations Six months ended February 29, 2000 (Unaudited) Investment income: - ----------------------------------------------------------------------------------------------- Dividends (net of foreign tax of $1,141) $15,588 - ----------------------------------------------------------------------------------------------- Interest 61 - ----------------------------------------------------------------------------------------------- Total investment income 15,649 Expenses: - ----------------------------------------------------------------------------------------------- Compensation of Manager (Note 2) 18,011 - ----------------------------------------------------------------------------------------------- Investor servicing and custodian fees (Note 2) 2,792 - ----------------------------------------------------------------------------------------------- Compensation of Trustees (Note 2) 1,159 - ----------------------------------------------------------------------------------------------- Administrative services (Note 2) 20 - ----------------------------------------------------------------------------------------------- Reports to shareholders 3,029 - ----------------------------------------------------------------------------------------------- Auditing 17,095 - ----------------------------------------------------------------------------------------------- Legal 2,157 - ----------------------------------------------------------------------------------------------- Postage 32 - ----------------------------------------------------------------------------------------------- Other 20 - ----------------------------------------------------------------------------------------------- Fees waived and reimbursed by Manager (Note 2) (14,598) - ----------------------------------------------------------------------------------------------- Total expenses 29,717 - ----------------------------------------------------------------------------------------------- Expense reduction (Note 2) (302) - ----------------------------------------------------------------------------------------------- Net expenses 29,415 - ----------------------------------------------------------------------------------------------- Net investment loss (13,766) - ----------------------------------------------------------------------------------------------- Net realized gain on investments (net of foreign tax of $14,202) (Notes 1 and 3) 435,013 - ----------------------------------------------------------------------------------------------- Net realized loss on foreign currency transactions (Note 1) (5,082) - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of assets and liabilities in foreign currencies during the period (Note 1) 774 - ----------------------------------------------------------------------------------------------- Net unrealized appreciation of investments during the period (net of deferred foreign tax of $28,058) 636,437 - ----------------------------------------------------------------------------------------------- Net gain on investments 1,067,142 - ----------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $1,053,376 - ----------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets Six months ended Year ended February 29 August 31 2000* 1999 - --------------------------------------------------------------------------------------------------------------- Increase in net assets - --------------------------------------------------------------------------------------------------------------- Operations: - --------------------------------------------------------------------------------------------------------------- Net investment income (loss) $ (13,766) $ 7,964 - --------------------------------------------------------------------------------------------------------------- Net realized gain on investments and foreign currency transactions 429,931 289,780 - --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments and assets and liabilities in foreign currencies 637,211 1,264,778 - --------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 1,053,376 1,562,522 - --------------------------------------------------------------------------------------------------------------- Distributions to shareholders: - --------------------------------------------------------------------------------------------------------------- From net investment income -- (7,964) - --------------------------------------------------------------------------------------------------------------- In excess of net investment income -- (15,394) - --------------------------------------------------------------------------------------------------------------- From return of capital -- (4,667) - --------------------------------------------------------------------------------------------------------------- Increase from capital share transactions (Note 4) 287,107 264,290 - --------------------------------------------------------------------------------------------------------------- Total increase in net assets 1,340,483 1,798,787 Net assets - --------------------------------------------------------------------------------------------------------------- Beginning of period 3,129,494 1,330,707 - --------------------------------------------------------------------------------------------------------------- End of period (including accumulated net investment loss and distributions in excess of net investment income of $21,177 and $7,411, respectively) $4,469,977 $3,129,494 - --------------------------------------------------------------------------------------------------------------- * Unaudited The accompanying notes are an integral part of these financial statements.
Financial highlights (For a share outstanding throughout the period) - ------------------------------------------------------------------------------------------------------------------------------- Six months ended Year For the period Per-share February 29 ended March 23, 1998+ operating performance (Unaudited) August 31 to August 31 - ------------------------------------------------------------------------------------------------------------------------------- 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $10.90 $5.23 $8.50 - ------------------------------------------------------------------------------------------------------------------------------- Investment operations - ------------------------------------------------------------------------------------------------------------------------------- Net investment income (loss)(a)(b) (.05) .03 .06 - ------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments 3.75 5.75 (3.33) - ------------------------------------------------------------------------------------------------------------------------------- Total from investment operations 3.70 5.78 (3.27) - ------------------------------------------------------------------------------------------------------------------------------- Less distributions: - ------------------------------------------------------------------------------------------------------------------------------- From net investment income -- (.03) -- - ------------------------------------------------------------------------------------------------------------------------------- In excess of net investment income -- (.06) -- - ------------------------------------------------------------------------------------------------------------------------------- From return of capital -- (.02) -- - ------------------------------------------------------------------------------------------------------------------------------- Total distributions -- (.11) -- - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $14.60 $10.90 $5.23 - ------------------------------------------------------------------------------------------------------------------------------- Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------- Total return at net asset value (%)(c) 33.95* 111.52 (38.47)* - ------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $4,470 $3,129 $1,331 - ------------------------------------------------------------------------------------------------------------------------------- Ratio of expenses to average net assets (%)(b)(d) .82* 1.65 .73* - ------------------------------------------------------------------------------------------------------------------------------- Ratio of net investment income to average net assets (%)(b) (.38)* .35 .99* - ------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover (%) 142.94* 234.28 202.60* - ------------------------------------------------------------------------------------------------------------------------------- + Commencement of operations. * Not annualized. (a) Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period. (b) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses for the fund reflect a reduction of $.05, $.12 and $.07 per share for the periods ended February 29, 2000, August 31, 1999 and August 31, 1998, respectively (Note 2). (c) Total return assumes dividend reinvestment and does not reflect the effect of sales charges. (d) Includes amounts paid through expense offset arrangements (Note 2).
Notes to financial statements February 29, 2000 (Unaudited) Note 1 Significant accounting policies Putnam Asia Pacific Fund II (the "fund") is a series of Putnam Funds Trust (the "trust") which is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The fund seeks long term capital appreciation by investing primarily in common stocks and other securities of companies located in Asia other than Japan. The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with generally accepted accounting principles and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. A) Security valuation Investments for which market quotations are readily available are stated at market value, which is determined using the last reported sales price on its principal exchange, or if no sales are reported -- as in the case of some securities traded over-the-counter -- the last reported bid price. Short-term investments having remaining maturities of 60 days or less are stated at amortized cost, which approximates market value. Other investments, including restricted securities, are stated at fair value following procedures approved by the Trustees. B) Joint trading account Pursuant to an exemptive order issued by the Securities and Exchange Commission, the fund may transfer uninvested cash balances into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Investment Management, Inc. ("Putnam Management"), the fund's manager, a wholly-owned subsidiary of Putnam Investments, Inc. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. C) Repurchase agreements The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. Collateral for certain tri-party repurchase agreements is held at the counterparty's custodian in a segregated account for the benefit of the fund and the counterparty. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. D) Security transactions and related investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the fund is informed of the ex-dividend date. E) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities are recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when accrued or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies and the difference between the amount of investment income and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments. F) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986, as amended. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. The fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains earned. At August 31, 1999, the fund had a capital loss carryover of approximately $142,000 available to offset future net capital gain, if any, which will expire on August 31, 2007. G) Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Capital gain distributions, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Reclassifications are made to the fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. H) Expenses of the trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund. Note 2 Management fee, administrative services and other transactions Compensation of Putnam Management, for management and investment advisory services is paid quarterly based on the average net assets of the fund. Such fee is based on the following annual rates: 1.00% of the first $500 million of average net assets, 0.90% of the next $500 million, 0.85% of the next $500 million, 0.80% of the next $5 billion, 0.775% of the next $5 billion, 0.755% of the next $5 billion, 0.74% of the next $5 billion, and 0.73% thereafter. Putnam Management has agreed to limit its compensation (and, to the extent necessary, bear other expenses) through August 31, 2000, to the extent that expenses of the fund (exclusive of brokerage commissions, interest, taxes, deferred organizational and extraordinary expense, credits from Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. and payments under the Trust's distribution plan) would exceed an annual rate of 1.65% of the fund's average net assets. The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. Custodial functions for the fund's assets are provided by PFTC. Investor servicing agent functions are provided by Putnam Investor Services, a division of PFTC. For the six months ended February 29, 2000, fund expenses were reduced by $302 under expense offset arrangements with PFTC and brokerage service arrangements. Investor servicing and custodian fees reported in the Statement of operations exclude these credits. The fund could have invested a portion of the assets utilized in connection with the expense offset arrangements in an income producing asset if it had not entered into such arrangements. Each Trustee of the fund receives an annual Trustee fee, of which $100 has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees receive additional fees for attendance at certain committee meetings. The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan") which allows the Trustees to defer the receipt of all or a portion of Trustees Fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan. The fund has adopted an unfunded noncontributory defined benefit pension plan (the "Pension Plan") covering all Trustees of the fund who have served as a Trustee for at least five years. Benefits under the Pension Plan are equal to 50% of the Trustee's average total retainer and meeting fees for the three years preceding retirement. Pension expense for the fund is included in Compensation of Trustees in the Statement of operations. Accrued pension liability is included in Payable for compensation of Trustees in the Statement of assets and liabilities. The fund has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plan is to compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments, Inc., for services provided and expenses incurred by it in distributing shares of the fund. The Plan provides for payment by the fund to Putnam Mutual Funds Corp. at an annual rate of up to 0.35% of the fund's average net assets. The fund is not currently making any payments pursuant to the plan. For the six months ended February 29, 2000, Putnam Mutual Funds Corp., acting as underwriter received no net commissions of from the sale of shares of the fund. A deferred sales charge of up to 1% is assessed on certain redemptions of shares. For the six months ended February 29, 2000, Putnam Mutual Funds Corp., acting as underwriter received no monies on redemptions. Note 3 Purchases and sales of securities During the six months ended February 29, 2000, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $5,124,903 and $5,046,971, respectively. There were no purchases and sales of U.S. government obligations. Note 4 Capital shares At February 29, 2000 there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: Six months ended February 29, 2000 - ----------------------------------------------------------------------------- Class A Shares Amount - ----------------------------------------------------------------------------- Shares sold 42,901 $590,103 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions -- -- - ----------------------------------------------------------------------------- 42,901 590,103 Shares repurchased (23,907) (302,996) - ----------------------------------------------------------------------------- Net increase 18,994 $287,107 - ----------------------------------------------------------------------------- Year ended August 31, 1999 - ----------------------------------------------------------------------------- Class A Shares Amount - ----------------------------------------------------------------------------- Shares sold 43,710 $359,791 - ----------------------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 3,792 28,025 - ----------------------------------------------------------------------------- 47,502 387,816 Shares repurchased (15,071) (123,526) - ----------------------------------------------------------------------------- Net increase 32,431 $264,290 - ----------------------------------------------------------------------------- At February 29, 2000, Putnam Investments, Inc. owned 264,222 shares of the fund (86.3% of shares outstanding), valued at $3,857,641. Fund information WEB SITE www.putnaminv.com INVESTMENT MANAGER Putnam Investment Management, Inc. One Post Office Square Boston, MA 02109 MARKETING SERVICES Putnam Mutual Funds Corp. One Post Office Square Boston, MA 02109 CUSTODIAN Putnam Fiduciary Trust Company LEGAL COUNSEL Ropes & Gray TRUSTEES George Putnam, Chairman William F. Pounds, Vice Chairman John A. Hill, Vice Chairman Jameson Adkins Baxter Hans H. Estin Ronald J. Jackson Paul L. Joskow Elizabeth T. Kennan Lawrence J. Lasser John H. Mullin III Robert E. Patterson George Putnam, III A.J.C. Smith W. Thomas Stephens W. Nicholas Thorndike OFFICERS George Putnam President Charles E. Porter Executive Vice President Patricia C. Flaherty Senior Vice President John D. Hughes Senior Vice President and Treasurer Lawrence J. Lasser Vice President Gordon H. Silver Vice President Ian C. Ferguson Vice President Brett C. Browchuk Vice President John J. Morgan, Jr. Vice President Justin Scott Vice President Paul Warren Vice President and Fund Manager Carmel Peters Vice President and Fund Manager Richard A. Monaghan Vice President Richard G. Leibovitch Vice President John R. Verani Vice President This report is for the information of shareholders of Putnam Asia Pacific II Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, which gives details of sales charges, investment objectives, and operating policies of the fund, and the most recent copy of Putnam's Quarterly Performance Summary. For more information or to request a prospectus, call toll free: 1-800-225-1581. You can also learn more at Putnam Investments' Web site: www.putnaminv.com. Shares of mutual funds are not deposits or obligations of, or guaranteed or endorsed by, any financial institution; are not insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any other agency; and involve risk, including the possible loss of the principal amount invested. 21B 59720 4/00 -----END PRIVACY-ENHANCED MESSAGE-----