<PAGE> 1
As filed with the Securities and Exchange Commission on April 28, 1999
File No. 333-02381
File No. 811-07589
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
--
Post-Effective Amendment No. 12 |X|
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 14 |X|
THE HARTFORD MUTUAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
Hartford Plaza, Hartford, Connecticut 06115
(Address of Principal Executive Offices)
Registrant's Telephone Number Including Area Code: (860) 297-6443
Kevin J. Carr, Esquire
The Hartford Financial Services Group, Inc.
Investment Law Unit
55 Farmington Avenue
Hartford, Connecticut 06105
(Name and Address of Agent for Service)
The Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Section (a)(1) of Rule 24f-2 under the
Investment Company Act of 1940. The Rule 24f-2 Notice for the Registrant's most
recent fiscal year was filed on March 18, 1999.
It is proposed that this filing will become effective (check appropriate box).
immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 1999 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule 485
on pursuant to paragraph (a)(1) of Rule 485
75 days after filing pursuant to paragraph (a)(2) of Rule 485
<PAGE> 2
on pursuant to paragraph (a)(2) of Rule 485
<PAGE> 3
This registration statement includes one combined prospectus for the
Class A, B and C shares, one prospectus for the Class Y shares, and a combined
statement of additional information for the Class A, B, C and Y shares, for the
following funds:
FUND NAME
The Hartford Small Company Fund
The Hartford Capital Appreciation Fund
The Hartford MidCap Fund
The Hartford International Opportunities Fund
The Hartford Global Leaders Fund
The Hartford Stock Fund
The Hartford Growth and Income Fund
The Hartford Dividend and Growth Fund
The Hartford Advisers Fund
The Hartford High Yield Fund
The Hartford Bond Income Strategy Fund
The Hartford Money Market Fund
<PAGE> 4
THE HARTFORD MUTUAL FUNDS, INC.
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
MAY 1, 1999
<TABLE>
<S> <C>
AS WITH ALL MUTUAL FUNDS, THE SMALL COMPANY FUND
SECURITIES AND EXCHANGE COMMISSION CAPITAL APPRECIATION FUND
HAS NOT APPROVED OR DISAPPROVED MIDCAP FUND
THESE SECURITIES OR PASSED UPON INTERNATIONAL OPPORTUNITIES FUND
THE ADEQUACY OF THIS PROSPECTUS. GLOBAL LEADERS FUND
ANY REPRESENTATION TO THE CONTRARY STOCK FUND
IS A CRIMINAL OFFENSE. GROWTH AND INCOME FUND
DIVIDEND AND GROWTH FUND
ADVISERS FUND
HIGH YIELD FUND
BOND INCOME STRATEGY FUND
MONEY MARKET FUND
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 8416
BOSTON, MA 02266-8416
<PAGE> 5
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 6
INTRODUCTION
- --------------------------------------------------------------------------------
The Hartford Mutual Funds, Inc. is a family of twelve mutual funds, each with
its own investment strategy and risk/reward profile. This prospectus relates to
the Class A, B and C shares of each fund. Information on each fund can be found
on the pages following this introduction.
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosures carefully before investing.
CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
A summary of each fund's goals, The Hartford Small Company Fund 2
strategies, risks, performance and The Hartford Capital Appreciation Fund 4
expenses. The Hartford MidCap Fund 6
The Hartford International Opportunities Fund 8
The Hartford Global Leaders Fund 10
The Hartford Stock Fund 12
The Hartford Growth and Income Fund 14
The Hartford Dividend and Growth Fund 16
The Hartford Advisers Fund 18
The Hartford High Yield Fund 20
The Hartford Bond Income Strategy Fund 22
The Hartford Money Market Fund 24
Prior performance of similar funds 26
Description of additional Additional investment matters 28
investment strategies and
investment risks.
Investment manager and management Management of the funds 29
fee information.
Information on your account. About your account 30
Choosing a share class 30
How sales charges are calculated 30
Sales charge reductions and waivers 31
Opening an account 32
Buying shares 33
Selling shares 34
Transaction policies 36
Dividends and account policies 37
Additional investor services 37
Further information on the funds. Additional share classes 39
Financial highlights 40
For more information back cover
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 1
<PAGE> 7
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Small Company Fund seeks growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Russell 2000 Index. As of December 31, 1998 this range was between approximately
$4 million and $3.4 billion and the average market capitalization was $560
million.
Through fundamental analysis Wellington Management identifies companies that it
believes have substantial potential for near-term capital appreciation.
Wellington Management selects securities of companies that, in its opinion:
- have potential for above-average earnings growth,
- are undervalued in relation to their investment potential,
- have positive business and/or fundamental financial characteristics that
are overlooked or misunderstood by investors, or
- are relatively obscure and undiscovered by the overall investment
community.
Fundamental analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on small
companies, its performance may be more volatile than that of a fund that invests
primarily in larger companies.
Stocks of smaller companies may be more risky than stocks of larger companies.
Many of these companies are young and have limited operating or business
history. Because these businesses frequently rely on narrow product lines and
niche markets, they can suffer severely from isolated business setbacks.
The fund's management strategy will influence performance significantly. Small
company stocks as a group could fall out of favor with the market, causing the
fund to underperform funds that focus on other types of stocks. Similarly, if
the managers' stock selection strategy doesn't perform as expected, the fund
could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD SMALL COMPANY FUND
-------------------------------
<S> <C>
'97' 19.28%
'98' 10.46%
</TABLE>
- --------------------------------------------------------
BEST QUARTER: up 27.86%, fourth quarter 1998
WORST QUARTER: down 20.78%, third quarter 1998
- --------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 4.38% 15.46%
Class B 4.73% 16.41%
Class C(1) 7.72% 16.94%
Russell 2000 Index -2.55% 13.79%
</TABLE>
INDEX: Russell 2000 Index, an unmanaged index of small company equity
securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
2 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 8
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Mark E. Waterhouse
- - Vice President of Wellington Management
- - Manager of the fund since 1997
- - Joined Wellington Management in 1995
- - Investment professional since 1984
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.37% 0.37% 0.61%
Total operating expenses(2) 1.57% 2.22% 2.46%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.45% for Class A, 2.15% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 207 $ 728 $ 270
Year 3 $ 527 $1,001 $ 778
Year 5 $ 869 $1,401 $1,322
Year 10 $1,830 $2,576 $2,804
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 207 $ 228 $ 260
Year 3 $ 527 $ 701 $ 778
Year 5 $ 869 $1,201 $1,322
Year 10 $1,830 $2,576 $2,804
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 3
<PAGE> 9
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Capital Appreciation Fund seeks growth
of capital by investing primarily in stocks selected on the basis of potential
for capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
small, medium and large companies.
Through fundamental analysis, Wellington Management identifies companies that it
believes have substantial near-term capital appreciation potential regardless of
company size or industry sector. This strategy is sometimes referred to as a
"stock picking" approach. Small and medium sized companies are selected
primarily on the basis of dynamic earnings growth potential. Larger companies
are selected primarily based on the expectation of a significant event that
Wellington Management believes will trigger an increase in the stock price.
In analyzing a prospective investment Wellington Management looks at a number of
factors, such as business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends and other related measures
of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that of a
fund that invests primarily in larger companies.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD CAPITAL APPRECIATION FUND
--------------------------------------
<S> <C>
'97' 55.11%
'98' 3.26%
</TABLE>
- -------------------------------------------------------
BEST QUARTER: up 31.19%, second quarter 1997
WORST QUARTER: down 21.94%, third quarter 1998
- -------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A -2.42% 35.07%
Class B -2.48% 36.54%
Class C(1) 0.56% 36.79%
S&P 500 Index 28.60% 33.45%
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
4 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 10
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Saul J. Pannell
- - Senior Vice President of Wellington Management
- - Manager of the fund since inception (1996)
- - Joined Wellington Management in 1979
- - Investment professional since 1974
Mark E. Waterhouse
- - Vice President of Wellington Management
- - Associate Manager of the fund since 1996
- - Joined Wellington Management in 1995
- - Investment professional since 1984
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.34% 0.35% 0.49%
Total operating expenses(2) 1.49% 2.15% 2.29%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.45% for Class A, 2.15% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 199 $ 720 $ 252
Year 3 $ 503 $ 980 $ 726
Year 5 $ 829 $1,365 $1,235
Year 10 $1,746 $2,503 $2,632
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 199 $ 220 $ 242
Year 3 $ 503 $ 680 $ 726
Year 5 $ 829 $1,165 $1,235
Year 10 $1,746 $2,503 $2,632
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 5
<PAGE> 11
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford MidCap Fund seeks long-term growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Standard & Poor's MidCap 400 Index. As of December 31, 1998 this range was
between approximately $142 million and $11.6 billion and the average market
capitalization was $2.2 billion.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, and demographic trends. Through top down analysis, Wellington
Management anticipates trends and changes in markets and the economy
overall and identifies industries and sectors that are expected to
outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, and other related measures of value.
The fund favors high-quality growth companies. The key characteristics of
high-quality growth companies include a leadership position within an industry,
a strong balance sheet, a high return on equity, and a strong management team.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on
mid-sized companies, its performance may be more volatile than that of a fund
that invests primarily in larger companies.
Stocks of mid-sized companies may be more risky than stocks of larger companies.
These companies may be young and have more limited operating or business
history. Because these businesses frequently rely on narrower product lines and
niche markets, they can suffer from isolated business setbacks.
The fund's management strategy will influence performance significantly.
Mid-sized company stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on other types of stocks.
Similarly, if the managers' stock selection strategy doesn't perform as
expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart indicates the fund's total return for one calendar
year while the table shows the fund's performance over time (along with that of
a broad based market index for comparison). The bar chart figures do not include
the effect of sales charges, while the average annual total return figures do.
If sales charges were reflected in the bar chart, returns would have been lower.
All figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[Hartford Midcap Fund Bar Graph]
<TABLE>
<CAPTION>
THE HARTFORD MIDCAP FUND
------------------------
<S> <C>
'98' 23.12%
</TABLE>
- -------------------------------------------------------
BEST QUARTER: up 27.59%, fourth quarter 1998
WORST QUARTER: down 16.03%, third quarter 1998
- -------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 12/30/97)
<S> <C> <C>
Class A 16.35% 16.19%
Class B 17.32% 18.15%
Class C(1) 20.08% 20.90%
S&P MidCap 400 Index 18.25% 19.08%
</TABLE>
INDEX: Standard & Poor's MidCap 400 Index, an unmanaged index of equity
securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
6 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 12
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Phillip H. Perelmuter
- - Vice President of Wellington Management
- - Manager of the fund since inception (1997)
- - Joined Wellington Management in 1995
- - Investment professional since 1983
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.42% 0.46% 0.72%
Total operating expenses(2) 1.62% 2.31% 2.57%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.45% for Class A, 2.15% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 212 $ 737 $ 281
Year 3 $ 542 $1,029 $ 811
Year 5 $ 894 $1,448 $1,377
Year 10 $1,882 $2,669 $2,914
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 212 $ 237 $ 271
Year 3 $ 542 $ 729 $ 811
Year 5 $ 894 $1,248 $1,377
Year 10 $1,882 $2,669 $2,914
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 7
<PAGE> 13
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford International Opportunities Fund seeks
growth of capital by investing primarily in stocks issued by non-U.S. companies.
The fund normally invests at least 65% of its assets in stocks issued by
non-U.S. companies which trade in foreign markets generally considered to be
well established. Under normal market conditions the fund diversifies its
investments among at least three countries other than the United States. The
securities in which the fund invests are denominated in both U.S. dollars and
non-U.S. currencies and generally are traded in non-U.S. markets.
Wellington Management uses a three-pronged investment strategy:
- Wellington Management determines the relative attractiveness of the many
countries in which the fund may invest based upon its analysis of the
economic and political environment of each country.
- Wellington Management also evaluates industries on a global basis to
determine which industries offer the most potential for capital
appreciation given current and projected global and local economic and
market conditions.
- Wellington Management conducts fundamental research on individual
companies to identify securities for purchase or sale. Fundamental
analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of
value.
In analyzing companies for investment, Wellington Management considers companies
for inclusion in the fund's portfolio that are typically larger, high-quality
companies that operate in established markets. Characteristics of high-quality
growth companies include a strong balance sheet, attractive industry trends,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[HARTFORD INTERNATIONAL OPPORTUNITIES FUND BAR GRAPH]
<TABLE>
<CAPTION>
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
---------------------------------------------
<S> <C>
'97' 0.84%
'98' 12.53%
</TABLE>
- --------------------------------------------------------
BEST QUARTER: up 15.70%, fourth quarter 1998
WORST QUARTER: down 16.14%, third quarter 1998
- --------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 6.34% 6.25%
Class B 6.82% 6.91%
Class C(1) 9.75% 7.60%
EAFE GDP Index 26.71% 15.37%(2)
</TABLE>
INDEX: Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP") Index, an
unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
(2) Return is from 7/31/96 -- 12/31/98
8 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 14
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Trond Skramstad
- - Senior Vice President of Wellington Management
- - Manager of the fund since inception (1996)
- - Joined Wellington Management in 1993
- - Investment professional since 1990
Andrew S. Offit
- - Vice President of Wellington Management
- - Associate Manager of the fund since 1997
- - Joined Wellington Management in 1997
- - Investment professional since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees (1) 0.35% 1.00% 1.00%
Other expenses 0.69% 0.71% 0.98%
Total operating expenses (2) 1.89% 2.56% 2.83%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.65% for Class A, 2.35% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 238 $ 762 $ 307
Year 3 $ 621 $1,106 $ 890
Year 5 $1,028 $1,576 $1,507
Year 10 $2,160 $2,923 $3,169
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 238 $ 262 $ 297
Year 3 $ 621 $ 806 $ 890
Year 5 $1,028 $1,376 $1,507
Year 10 $2,160 $2,923 $3,169
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 9
<PAGE> 15
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Global Leaders Fund seeks growth of
capital by investing primarily in stocks issued by U.S. companies and non-U.S.
companies.
The fund invests primarily in a diversified portfolio of common stocks covering
a broad range of countries, industries and companies. Securities in which the
fund invests are denominated in both U.S. dollars and non-U.S. currencies and
may trade in both U.S. and non-U.S. markets.
Under normal market and economic conditions, the fund invests at least 65% of
its total assets in common stocks of high-quality growth companies worldwide.
These companies must, in the opinion of Wellington Management, be leaders in
their respective industries as indicated by an established market presence and
strong global, regional or country competitive positions. Under normal market
and economic conditions, the fund will diversify its investments in securities
of issuers among at least five countries, which may include the United States.
There are no limits on the amount of the fund's assets that may be invested in
each country.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the global macro-economic and
investment environments. This includes an evaluation of U.S. and non-U.S.
economic and political conditions, fiscal and monetary policies,
demographic trends and investor sentiment. Through top down analysis,
Wellington Management anticipates trends and changes in the markets and
economy to identify companies which offer the most potential for capital
appreciation given current and projected global and local economic and
market conditions.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statements, anticipated
earnings, revenues and other related measures of value.
The fund emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a strong balance sheet, a high return on
equity, a strong management team, and attractive relative value within the
context of the global marketplace or a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history has been provided.
10 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 16
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Rand L. Alexander
- - Senior Vice President of Wellington Management
- - Co-manager of the fund since inception (1998)
- - Joined Wellington Management in 1990
- - Investment professional since 1976
Andrew S. Offit
- - Vice President of Wellington Management
- - Co-manager of the fund since inception (1998)
- - Joined Wellington Management in 1997
- - Investment professional since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 1.51% 1.70% 1.72%
Total operating expenses (2) 2.71% 3.55% 3.57%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has voluntarily agreed to reduce the fee to 0.30%.
This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.65% for Class A, 2.35% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 317 $ 864 $ 382
Year 3 $ 860 $1,407 $1,111
Year 5 $1,427 $2,070 $1,871
Year 10 $2,959 $3,870 $3,859
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 317 $ 364 $ 372
Year 3 $ 860 $1,107 $1,111
Year 5 $1,427 $1,870 $1,871
Year 10 $2,959 $3,870 $3,859
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 11
<PAGE> 17
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Stock Fund seeks long-term growth of
capital, with income as a secondary consideration, by investing primarily in
stocks.
The fund normally invests at least 65% of the fund's total assets in the common
stocks of high-quality growth companies. Many of the companies in which the fund
invests have a history of paying dividends and are expected to continue paying
dividends in the future. The fund invests in a diversified portfolio of
primarily equity securities using a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, demographic trends, and investor sentiment. Through top down
analysis, Wellington Management anticipates trends and
changes in markets in the economy overall and identifies industries and
sectors that are expected to outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
of a company involves the assessment of such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
The key characteristics of high-quality growth companies favored by the fund
include a leadership position within an industry, a strong balance sheet, a high
return on equity, sustainable or increasing dividends, a strong management team
and a globally competitive position.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
The fund's management strategy will influence performance significantly.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on small- or
medium-capitalization stocks. Similarly, if the managers' stock selection
strategy doesn't perform as expected, the fund could underperform its peers or
lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD STOCK FUND
-----------------------
<S> <C>
'97' 31.78%
'98' 31.33%
</TABLE>
- -------------------------------------------------------
BEST QUARTER: up 20.30%, fourth quarter 1998
WORST QUARTER: down 10.25%, third quarter 1998
- -------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 24.11% 29.73%
Class B 25.38% 31.01%
Class C(1) 28.02% 31.27%
S&P 500 Index 28.60% 33.45%
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
12 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 18
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Rand L. Alexander
- - Senior Vice President of Wellington Management
- - Manager of the fund since inception (1996)
- - Joined Wellington Management in 1990
- - Investment professional since 1976
Philip H. Perelmuter
- - Vice President of Wellington Management
- - Associate Manager of the fund since 1996
- - Joined Wellington Management in 1995
- - Investment professional since 1983
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.34% 0.36% 0.44%
Total operating expenses(2) 1.49% 2.16% 2.24%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.45% for Class A, 2.15% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 199 $ 721 $ 247
Year 3 $ 503 $ 983 $ 711
Year 5 $ 829 $1,370 $1,210
Year 10 $1,746 $2,513 $2,581
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 199 $ 221 $ 237
Year 3 $ 503 $ 683 $ 711
Year 5 $ 829 $1,170 $1,210
Year 10 $1,746 $2,513 $2,581
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 13
<PAGE> 19
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Growth and Income Fund seeks growth of
capital and current income by investing primarily in stocks with earnings growth
potential and steady or rising dividends.
The fund invests primarily in a diversified portfolio of common stocks that
typically have steady or rising dividends and whose prospects for capital
appreciation are considered favorable by Wellington Management.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues, dividends and other
related measures of value.
Wellington Management then complements its fundamental research with an
internally-developed analytical approach. This analytical approach consists of
both valuation and timeliness measures. Valuation factors focus on future
dividend growth and cash flow to determine the relative attractiveness of
different stocks in different industries. Timeliness focuses on stocks with
favorable earnings and stock price momentum to assess the appropriate time for
purchase.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history has been provided.
14 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 20
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
James A. Rullo
- - Senior Vice President of Wellington Management
- - Manager of the fund since inception (1998)
- - Joined Wellington Management in 1994
- - Investment professional since 1987
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees (1) 0.35% 1.00% 1.00%
Other expenses 0.48% 0.52% 0.58%
Total operating expenses (2) 1.63% 2.32% 2.38%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.45% for Class A, 2.15% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 213 $ 738 $ 262
Year 3 $ 545 $1,032 $ 753
Year 5 $ 899 $1,453 $1,281
Year 10 $1,893 $2,679 $2,723
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 213 $ 238 $ 252
Year 3 $ 545 $ 732 $ 753
Year 5 $ 899 $1,253 $1,281
Year 10 $1,893 $2,679 $2,723
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 15
<PAGE> 21
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Dividend and Growth Fund seeks a high
level of current income consistent with growth of capital by investing primarily
in stocks.
The fund invests primarily in a diversified portfolio of common stocks that
typically have above average income yields and whose prospects for capital
appreciation are considered favorable by Wellington Management. Under normal
market and economic conditions at least 65% of the fund's total assets are
invested in dividend-paying equity securities. The fund tends to focus on
securities of larger, well-established companies.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues and dividends.
As a key component of its fundamental analysis, Wellington Management evaluates
a company's ability to sustain and potentially increase its dividend payments.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD DIVIDEND AND GROWTH FUND
-------------------------------------
<S> <C>
'97' 30.99%
'98' 14.47%
</TABLE>
- ------------------------------------------------------
BEST QUARTER: up 15.85%, second quarter 1997
WORST QUARTER: down 8.02%, third quarter 1998
- ------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 8.17% 22.24%
Class B 8.62% 23.31%
Class C(1) 11.58% 23.74%
S&P 500 Index 28.60% 33.45%
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
16 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 22
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Laurie A. Gabriel
- - Senior Vice President of Wellington Management
- - Manager of the fund since inception (1996)
- - Joined Wellington Management in 1976
- - Investment professional since 1976
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.33% 0.35% 0.45%
Total operating expenses(2) 1.43% 2.10% 2.20%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.40% for Class A, 2.10% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 194 $ 715 $ 243
Year 3 $ 485 $ 964 $ 698
Year 5 $ 798 $1,339 $1,189
Year 10 $1,683 $2,450 $2,539
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 194 $ 215 $ 233
Year 3 $ 485 $ 664 $ 698
Year 5 $ 798 $1,139 $1,189
Year 10 $1,683 $2,450 $2,539
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 17
<PAGE> 23
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Advisers Fund seeks maximum long-term
total return by investing in stocks, bonds and other debt securities and money
market instruments.
The fund favors stocks issued by high-quality growth companies. The key
characteristics of high-quality growth companies include a leadership position
within an industry, a strong balance sheet, a high return on equity, sustainable
or increasing dividends, a strong management team and a globally competitive
position.
The debt securities in which the fund primarily invests include securities
issued or guaranteed by the U.S. Government and its agencies or
instrumentalities and securities rated investment grade (rated at least BBB by
Standard & Poor's Corporation or Baa by Moody's Investors Service, Inc., or if
unrated, securities deemed by Wellington Management to be of comparable quality.
The fund is not restricted to any specific maturity term.
Asset allocation decisions are based on Wellington Management's judgment of the
projected investment environment for financial assets, relative fundamental
values, the attractiveness of each asset category, and expected future returns
of each asset category. Wellington Management does not attempt to engage in
short-term market timing among asset categories. As a result, shifts in asset
allocation are expected to be gradual and continuous and the fund will normally
have some portion of its assets invested in each asset category. There is no
limit on the amount of fund assets that may be allocated to each asset category
and the allocation is in Wellington Management's discretion.
- --------------------------------------------------------------------------------
MAIN RISKS. This fund has stock market risk, interest rate risk, manager
allocation risk, credit risk and prepayment risk. You could lose money as a
result of your investment.
Stock market risk means the stocks held by the fund may decline in value due to
the activities and financial prospects of individual companies or to general
market and economic conditions.
Interest rate risk refers to the possibility that your investment may go down in
value when interest rates rise.
Manager allocation risk refers to the possibility that the portfolio managers
could incorrectly allocate assets so that the fund underperforms its peers.
Credit risk refers to the possibility that the issuing company may not be able
to pay interest and principal when due.
Prepayment risk refers to the possibility that any mortgage securities held by
the fund may be adversely affected by changes in prepayment rates on the
underlying mortgages. If prepayments increase as a result of lower interest
rates the fund may have to invest a portion of its assets at lower rates.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of broad-based market indices for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
HARTFORD ADVISERS FUND
----------------------
<S> <C>
'97' 23.30%
'98' 21.09%
</TABLE>
- --------------------------------------------------------------------------------
BEST QUARTER: up 12.39%, second quarter 1997
WORST QUARTER: down 3.94%, third quarter 1998
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 14.43% 20.40%
Class B 15.27% 21.48%
Class C(1) 17.95% 21.85%
S&P 500 Index 28.60% 33.45%
LGCB Index 9.47% 10.00%
</TABLE>
INDICES: S&P 500 Index and the Lehman Government Corporate Bond Index,
unmanaged indices of stocks and bonds, respectively.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
18 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 24
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Paul D. Kaplan
- - Senior Vice President of Wellington Management
- - Co-manager of the fund since inception (1996)
- - Joined Wellington Management in 1982
- - Investment professional since 1974
Rand L. Alexander
- - Senior Vice President of Wellington Management
- - Co-manager of the fund since inception (1996)
- - Joined Wellington Management in 1990
- - Investment professional since 1976
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.33% 0.36% 0.43%
Total operating expenses(2) 1.43% 2.11% 2.18%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.40% for Class A, 2.10% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 194 $ 716 $ 241
Year 3 $ 485 $ 967 $ 692
Year 5 $ 798 $1,345 $1,179
Year 10 $1,683 $2,461 $2,519
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 194 $ 216 $ 231
Year 3 $ 485 $ 667 $ 692
Year 5 $ 798 $1,145 $1,179
Year 10 $1,683 $2,461 $2,519
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 19
<PAGE> 25
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford High Yield Fund seeks high current
income by investing in non-investment grade debt securities. Growth of capital
is a secondary objective.
The fund normally invests at least 65%, and may invest up to 100%, of its
portfolio in non-investment grade debt securities (securities rated "Ba" or
lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or lower by
Standard and Poor's Corporation ("S&P"), or securities which, if unrated, are
determined by HIMCO to be of comparable quality). Below investment grade
securities are commonly referred to as "high yield-high risk securities" or
"junk bonds". The fund will invest no more than 10% of total assets in
securities rated below B3 by Moody's or B- by S&P, or if unrated, determined to
be of comparable quality by HIMCO. The fund may invest in bonds of any maturity
although the fund tends to have an average maturity within the intermediate-term
range.
The fund may invest up to 15% of its total assets in preferred stocks,
convertible securities, and securities carrying warrants to purchase equity
securities. The fund will not invest in common stocks directly, but may retain,
for reasonable periods of time, common stocks acquired upon conversion of debt
securities or upon exercise of warrants acquired with debt securities. The fund
may invest up to 30% of its total assets in securities of non-U.S. issuers.
To achieve its goal of high current income, the fund uses what is sometimes
referred to as a top-down analysis to determine which industries may benefit
from current and future changes in the economy. The fund then selects individual
securities within selected industries that appear from a yield perspective to be
attractive. The fund assesses such factors as the company's business
environment, balance sheet, income statement, anticipated earnings and
management team.
The fund seeks its secondary goal of capital growth, when consistent with its
primary objective of high current income, by investing in securities that the
portfolio manager expects to appreciate in value as a result of declines in
long-term interest rates or favorable developments affecting the business or
prospects of the issuer which may improve the issuer's financial condition and
credit rating.
- --------------------------------------------------------------------------------
MAIN RISKS. The major factors affecting this fund's performance are interest
rates and credit risk. When interest rates rise, bond prices fall; generally the
longer a bond's maturity, the more sensitive it is to this risk.
Credit risk depends largely on the perceived financial health of bond issuers.
In general, lower-rated bonds have higher credit risks. Junk bond prices can
fall on bad news about the economy, an industry or a company. Share price, yield
and total return may fluctuate more than with less aggressive bond funds.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. If certain industries or investments don't perform as the
fund expects, it could underperform its peers or lose money.
Junk bonds and foreign securities may make the fund more sensitive to market or
economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or current yield of the portfolio's securities or to the value of
the fund's shares.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history is provided.
20 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 26
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- - Senior Vice President of HIMCO
- - Manager of the fund since inception (1998)
- - Joined HIMCO in 1993
- - Investment professional since 1981
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 4.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 4.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.48% 0.56% 0.56%
Total operating expenses(2) 1.58% 2.31% 2.31%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.40% for Class A, 2.10% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 200 $ 737 $ 254
Year 3 $ 525 $1,029 $ 732
Year 5 $ 872 $1,448 $1,245
Year 10 $1,849 $2,669 $2,652
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 200 $ 237 $ 244
Year 3 $ 525 $ 729 $ 732
Year 5 $ 872 $1,248 $1,245
Year 10 $1,849 $2,669 $2,652
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 21
<PAGE> 27
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Bond Income Strategy Fund seeks a high
level of current income, consistent with a competitive total return, as compared
to bond funds with similar investment objectives and policies, by investing
primarily in debt securities. Debt securities include (1) securities issued or
guaranteed as to principal or interest by the U.S. Government, its agencies or
instrumentalities; (2) non-convertible debt securities issued or guaranteed by
U.S. corporations or other issuers (including foreign governments or
corporations); (3) asset-backed and mortgage-related securities; and (4)
securities issued or guaranteed as to principal or interest by a sovereign
government or one of its agencies or political subdivisions, supranational
entities such as development banks, non-U.S. corporations, banks or bank holding
companies, or other non-U.S. issuers.
The fund normally invests at least 70% of its portfolio in investment grade debt
securities. The fund may invest up to 30% of its total assets in securities
rated in the highest category of below investment grade bonds ("Ba1", "Ba2" or
"Ba3" by Moody's Investors Service, Inc. or "BB+", "BB" or "BB-" by Standard and
Poor's Corporation), or securities which, if unrated, are determined by HIMCO to
be of comparable quality. Securities rated below investment grade are commonly
referred to as "junk bonds".
The fund invests at least 65% of its total assets in debt securities with a
maturity of at least one year. Although the fund does not have a maximum
maturity term restriction, the fund tends to have an average maturity within the
intermediate-term range. The fund may invest up to 15% of its total assets in
preferred stocks, convertible securities, and securities accompanied by warrants
to purchase equity securities. The fund will not invest in common stocks
directly, but may retain, for reasonable periods of time, common stocks acquired
upon conversion of debt securities or upon exercise of warrants acquired with
debt securities. The fund may invest up to 30% of its total assets in debt
securities of non-U.S. companies.
The fund uses what is sometimes referred to as a top-down analysis to determine
which industries may benefit from current and future changes in the economy. The
fund then selects individual securities that appear comparatively undervalued
within selected industries. The portfolio manager assesses such factors as a
company's business environment, balance sheet, income statement, anticipated
earnings and management team.
- --------------------------------------------------------------------------------
MAIN RISKS. The major factors affecting this fund's performance are interest
rates and credit risk. When interest rates rise, bond prices fall; generally the
longer the fund's maturity, the more sensitive it is to this risk.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. In general, lower-rated bonds have higher credit risks. If
certain sectors or investments don't perform as the fund expects, it could
underperform its peers or lose money.
Junk bonds and foreign securities may make the fund more sensitive to market or
economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or current yield of the portfolio's securities or to the value of
the fund's shares.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
HARTFORD BOND INCOME STRATEGY FUND
---------------------------------
<S> <C>
'97' 10.80%
'98' 7.48%
</TABLE>
------------------------------------------------------------------------------
BEST QUARTER:
up 4.07%, second quarter 1997
WORST QUARTER:
down 0.42%, first quarter 1997
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 2.64% 7.84%
Class B 1.70% 7.98%
Class C(1) 4.67% 8.65%
Lehman Government
Corporate Bond Index 9.47% 10.00%
</TABLE>
INDEX: Lehman Government Corporate Bond Index, an unmanaged index of
fixed-income securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
22 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 28
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- - Senior Vice President of HIMCO
- - Manager of the fund since inception (1996)
- - Joined HIMCO in 1993
- - Investment professional since 1981
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 4.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 4.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.65% 0.65% 0.65%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.32% 0.36% 0.48%
Total operating expenses(2) 1.32% 2.01% 2.13%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.25% for Class A, 1.95% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 174 $ 706 $ 236
Year 3 $ 447 $ 936 $ 677
Year 5 $ 740 $1,292 $1,153
Year 10 $1,571 $2,355 $2,467
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 174 $ 206 $ 226
Year 3 $ 447 $ 636 $ 677
Year 5 $ 740 $1,092 $1,153
Year 10 $1,571 $2,355 $2,467
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 23
<PAGE> 29
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Money Market Fund seeks maximum current
income consistent with liquidity and preservation of capital. The fund seeks to
maintain a stable share price of $1.00.
The fund focuses on specific short-term money market instruments such as debt
securities issued by corporations and financial institutions which are rated in
the first two investment tiers by at least one nationally recognized statistical
rating organization, or if unrated, determined to be of comparable quality by
HIMCO. Money market instruments include (1) banker's acceptances; (2)
obligations of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.
The fund purchases securities which it believes offer attractive returns
relative to the risks undertaken. In addition, the portfolio manager adjusts the
average maturity of the portfolio in anticipation of interest rate changes.
- --------------------------------------------------------------------------------
MAIN RISKS. An investment in the fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the fund seeks to preserve the value of your investment at $1.00 per share,
there is a risk that the fund's share price could fall below $1.00, which would
reduce the value of your account.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures do not include the effect of sales charges as no front-end sales charge
is applicable to the Class A shares of this fund. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
HARTFORD MONEY MARKET FUND
--------------------------
<S> <C>
'97' 4.73%
'98' 4.69%
</TABLE>
- -------------------------------------------------------------------------------
BEST QUARTER: up 1.19%, third quarter 1997
WORST QUARTER: up 1.10%, fourth quarter 1998
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 4.69% 4.69%
Class B -1.03% 1.09%
Class C(1) 1.90% 3.22%
60-Day Treasury Bill
Index 4.94% 5.13%
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term treasury
bills.
Current 7-day yield as of December 31, 1998: 4.26%
Effective 7-day yield (which indicates the effect of daily compounding) as of
December 31, 1998: 4.35%
Please call 1-888-843-7824 for the most recent current and effective yield
information.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
24 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 30
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
William H. Davison, Jr.
- - Senior Vice President of HIMCO
- - Manager of the fund since inception (1996)
- - Joined HIMCO in 1990
- - Investment professional since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) None 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price None None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.50% 0.50% 0.50%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.40% 0.36% 0.52%
Total operating expenses(2) 1.25% 1.86% 2.02%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee to
0.30%. This waiver may be discontinued at any time.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution fees and extraordinary
expenses as follows: 1.00% for Class A, 1.70% for Classes B and C. This
policy may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 128 $ 691 $ 225
Year 3 $ 399 $ 890 $ 643
Year 5 $ 690 $1,214 $1,097
Year 10 $1,518 $2,195 $2,352
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 128 $ 191 $ 215
Year 3 $ 399 $ 590 $ 643
Year 5 $ 690 $1,014 $1,097
Year 10 $1,518 $2,195 $2,352
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 25
<PAGE> 31
PRIOR PERFORMANCE OF SIMILAR FUNDS
- --------------------------------------------------------------------------------
Because the mutual funds that are the subject of this prospectus (the "Retail
Funds") began operations in July, 1996, or later, they have limited operating
and performance histories. However, the Capital Appreciation Fund, International
Opportunities Fund, Stock Fund, Dividend and Growth Fund and Advisers Fund are
modeled after existing funds (the "HLS Funds") that are managed by the same
portfolio managers at HIMCO or Wellington Management and have investment
objectives, policies and strategies substantially similar to those of the
corresponding funds. Depending on the fund involved, similarity of investment
characteristics may involve factors such as industry diversification, country
diversification, portfolio beta, portfolio quality, average maturity of
fixed-income assets, equity/non-equity mixes, and individual holdings. The HLS
Funds are used as investment vehicles for the assets of variable annuity and
variable life insurance contracts issued by The Hartford affiliates.
Below you will find information about the performance of the HLS Funds. Because
the expenses of the HLS Funds are generally lower than the Retail Funds the
performance of the HLS Funds would have been lower had the Retail Funds expenses
been applied.
The table below sets forth each fund, its corresponding HLS Fund, and their
respective inception date and asset sizes as of December 31, 1998. Any fund's
future performance may be greater or less than the performance of the
corresponding HLS Fund due to, among other things, differences in expenses,
asset sizes and cash flows between a fund and the corresponding HLS Fund.
<TABLE>
<CAPTION>
FUND CORRESPONDING HLS FUND
- ---- ----------------------
<S> <C>
Capital Appreciation (July Hartford Capital Appreciation HLS Fund, Inc. (April 2, 1984)
22, 1996) $698,638,678 $5,813,421,612
International Opportunities Hartford International Opportunities HLS Fund, Inc. (July 2,
(July 22, 1996) $56,020,588 1990) $1,197,356,582
Stock (July 22, 1996) Hartford Stock HLS Fund, Inc. (August 31, 1977)
$497,388,744 $7,193,213,170
Dividend and Growth (July Hartford Dividend and Growth HLS Fund, Inc. (March 8, 1994)
22, 1996) $317,618,659 $3,039,893,797
Advisers (July 22, 1996) Hartford Advisers HLS Fund, Inc. (March 31, 1983)
$667,192,259 $11,840,125,134
</TABLE>
26 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 32
The following table shows the average annualized total returns for the HLS Funds
for the one, three, five and ten year (or life of the HLS Fund, if shorter)
periods ended December 31, 1998. These figures are based on the actual gross
investment performance of the HLS Funds. From the gross investment performance
figures, the maximum Total Fund Operating Expenses for each Retail Fund are
deducted to arrive at the net return. Please remember that past performance is
not indicative of future returns.
<TABLE>
<CAPTION>
10 YEARS OR
HLS FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
-------- ------ ------- ------- ---------------
<S> <C> <C> <C> <C>
HARTFORD CAPITAL
APPRECIATION HLS FUND, INC.
Class A expenses plus maximum load 8.24% 16.29% 15.65% 17.10%
Class A expenses with no load(1) 14.54% 18.51% 16.96% 17.76%
Class B expenses with redemption 8.74% 16.95% 15.92% 16.94%
Class B expenses without redemption 13.74% 17.68% 16.14% 16.94%
Class C expenses with maximum load and redemption 11.60% 17.28% 15.91% 16.82%
Class C expenses without load or redemption 13.74% 17.68% 16.14% 16.94%
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC.
Class A expenses plus maximum load 5.99% 5.68% 5.42% 5.87%
Class A expenses with no load(1) 12.16% 7.69% 6.55% 6.57%
Class B expenses with redemption 6.37% 6.06% 5.48% 5.83%
Class B expenses without redemption 11.37% 6.94% 5.81% 5.83%
Class C expenses with maximum load and redemption 9.26% 6.58% 5.59% 5.70%
Class C expenses without load or redemption 11.37% 6.94% 5.81% 5.83%
HARTFORD STOCK HLS FUND, INC.
Class A expenses plus maximum load 24.87% 26.00% 20.88% 16.74%
Class A expenses with no load(1) 32.14% 28.39% 22.26% 17.40%
Class B expenses with redemption 26.22% 26.88% 21.22% 16.58%
Class B expenses without redemption 31.22% 27.50% 21.41% 16.58%
Class C expenses with maximum load and redemption 28.91% 27.07% 21.16% 16.46%
Class C expenses without load or redemption 31.22% 27.50% 21.41% 16.58%
HARTFORD DIVIDEND AND
GROWTH HLS FUND, INC.
Class A expenses plus maximum load 9.19% 20.41% N/A 19.94%
Class A expenses with no load(1) 15.55% 22.70% N/A 21.36%
Class B expenses with redemption 9.44% 21.17% N/A 20.20%
Class B expenses without redemption 14.74% 21.84% N/A 20.51%
Class C expenses with maximum load and redemption 12.59% 21.44% N/A 20.26%
Class C expenses without load or redemption 14.74% 21.84% N/A 20.51%
HARTFORD ADVISERS HLS FUND, INC.
Class A expenses plus maximum load 16.89% 18.66% 15.49% 13.67%
Class A expenses with no load(1) 23.69% 20.92% 16.80% 14.31%
Class B expenses with redemption 17.83% 19.38% 15.77% 13.51%
Class B expenses without redemption 22.83% 20.08% 15.99% 13.51%
Class C expenses with maximum load and redemption 20.60% 19.68% 15.75% 13.40%
Class C expenses without load or redemption 22.83% 20.08% 15.99% 13.51%
</TABLE>
- ---------------
(1) Certain persons may purchase Class A Shares that are not subject to the
Class A Initial Sales Charge and certain other persons may purchase Class A
Shares subject to less than the maximum Initial Sales Charge (see "Sales
Charge Reductions and Waivers" in this Prospectus).
THE HARTFORD MUTUAL FUNDS, INC. 27
<PAGE> 33
ADDITIONAL INVESTMENT MATTERS
- --------------------------------------------------------------------------------
USE OF OPTIONS AND FUTURES
Each fund (other than the Money Market fund) may purchase and sell options and
enter into futures contracts, in each case with respect to stocks, bonds, groups
of securities (such as financial indices) or foreign currencies. These
techniques permit a fund to gain exposure to a particular security or group of
securities, and thereby earn returns similar to those which would be earned by
direct investments in those securities. These techniques are also used to manage
risk by hedging a fund's portfolio investments. Use of these techniques may
result in losses to a fund or increase volatility.
USE OF MONEY MARKET INVESTMENTS
FOR TEMPORARY DEFENSIVE PURPOSES
From time to time each fund (other than the Money Market fund) may invest some
or all of its assets in high quality money market securities for temporary
defensive purposes in response to adverse market, economic or political
conditions. To the extent a fund is in a defensive position, the fund may lose
the benefit of upswings and may not achieve its investment objective.
ABOUT EACH FUND'S INVESTMENT GOAL
Each fund's investment goal may be changed without approval of the shareholders
of the fund. A fund may not be able to achieve its goal.
TAX CONSEQUENCES OF PORTFOLIO
TRADING PRACTICES
At times each fund may engage in short-term trading, which could produce higher
brokerage expenses for a fund and higher taxable distributions to the fund's
shareholders. The funds are not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
YEAR 2000
The services provided to the funds by HIFSCO, HIMCO, Wellington Management and
other service providers depend on the smooth functioning of their computer
systems. Many computer software systems in use today cannot distinguish the year
2000 from the year 1900 because of the way dates are encoded and calculated.
That failure could have a negative impact on the handling of securities trades,
pricing and account services. HIFSCO, HIMCO, Wellington Management and other
service providers have been actively working on necessary changes to their
computer systems to deal with the year 2000 issue and expect that their systems
will be adapted in time for that event. In addition, to the extent that a
company in a fund's portfolio suffers from a Year 2000 problem, a fund's
performance could be adversely affected.
28 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 34
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
THE INVESTMENT MANAGER
Hartford Investment Financial Services Company ("HIFSCO") is the investment
manager to each fund. HIFSCO is a majority-owned indirect subsidiary of The
Hartford Financial Services Group, Inc. ("The Hartford"), a Connecticut
financial services company with over $130 billion in assets. As of December 31,
1998 HIFSCO had over $2.5 billion in assets under management. HIFSCO is
responsible for the general business management of each fund and supervises the
activities of the investment sub-advisers described below. HIFSCO is principally
located at 200 Hopmeadow Street, Simsbury, Connecticut 06070.
THE INVESTMENT SUB-ADVISERS
Wellington Management Company, LLP ("Wellington Management") is the investment
sub-adviser to the Small Company Fund, Capital Appreciation Fund, MidCap Fund,
International Opportunities Fund, Global Leaders Fund, Stock Fund, Growth and
Income Fund, Dividend and Growth Fund and Advisers Fund. Wellington Management,
a Massachusetts limited liability partnership, is a professional investment
counseling firm that provides services to investment companies, employee benefit
plans, endowments, foundations and other institutions and individuals.
Wellington Management and its predecessor organizations have provided investment
advisory services since 1928. As of December 31, 1998 Wellington Management had
investment management authority over approximately $211 billion in assets.
Wellington Management is principally located at 75 State Street, Boston,
Massachusetts 02109.
The Hartford Investment Management Company ("HIMCO") is the investment
sub-adviser to the High Yield Fund, Bond Income Strategy Fund and Money Market
Fund. HIMCO is a professional money management firm that provides services to
investment companies, employee benefit plans and insurance companies. HIMCO is a
wholly-owned subsidiary of The Hartford. As of December 31, 1998 HIMCO and its
wholly-owned subsidiary had investment management authority over approximately
$61.2 billion in assets. HIMCO is principally located at 55 Farmington Avenue,
Hartford, Connecticut 06105.
MANAGEMENT FEES
For the year ended December 31, 1998, the investment advisory fees paid to
HIFSCO for each fund with at least one full year of operations, expressed as a
percentage of net assets, were as follows:
<TABLE>
<CAPTION>
FUND NAME ANNUAL RATE
- --------- -----------
<S> <C>
The Hartford Small Company Fund 0.85%
The Hartford Capital Appreciation
Fund 0.80%
The Hartford MidCap Fund 0.85%
The Hartford International
Opportunities Fund 0.85%
The Hartford Stock Fund 0.80%
The Hartford Dividend and Growth
Fund 0.75%
The Hartford Advisers Fund 0.75%
The Hartford Bond Income Strategy
Fund 0.65%
The Hartford Money Market Fund 0.50%
</TABLE>
The fee schedule below indicates annualized management fees based on average
daily net assets for the three funds that have been in operation for less than
one year.
HARTFORD GLOBAL LEADERS FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.85%
Next $500,000,000 0.75%
Amount Over $1 billion 0.70%
</TABLE>
HARTFORD GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.80%
Next $500,000,000 0.70%
Amount Over $1 billion 0.65%
</TABLE>
HARTFORD HIGH YIELD FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.75%
Next $500,000,000 0.65%
Amount Over $1 billion 0.60%
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 29
<PAGE> 35
ABOUT YOUR ACCOUNT
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Each share class has its own cost structure, allowing you to choose the one that
best meets your needs. Your financial representative can help you decide.
CLASS A
- - Front-end sales charges, as described at right.
- - Distribution and service (12b-1) fees of 0.35% (currently 0.30% due to waiver
by the distributor).
CLASS B
- - No front-end sales charge; all your money goes to work for you right away.
- - Distribution and service (12b-1) fees of 1.00%.
- - A deferred sales charge, as described on the following page.
- - Automatic conversion to Class A shares after eight years, thus reducing future
annual expenses.
CLASS C
- - 1% front-end sales charge.
- - Distribution and service (12b-1) fees of 1.00%
- - A 1.00% contingent deferred sales charge on shares sold within one year of
purchase.
- - No automatic conversion to Class A shares, so annual expenses continue at the
Class C level throughout the life of your investment.
For actual past expenses of each share class, see the fund-by-fund information
earlier in this prospectus.
Each class has adopted Rule 12b-1 plans which allow the class to pay
distribution fees for the sale and distribution of its shares. Because these
fees are paid out of a fund's assets on an ongoing basis, over time these fees
will increase the cost of your investment and may cost you more than paying
other types of sales charges.
HOW SALES CHARGES ARE CALCULATED
CLASS A sales charges for the Small Company Fund, Capital Appreciation Fund,
MidCap Fund, International Opportunities Fund, Global Leaders Fund, Stock Fund,
Growth and Income Fund, Dividend and Growth Fund and Advisers Fund are listed
below. The term offering price includes the front end sales load.
<TABLE>
<CAPTION>
AS A % OF AS A %
OFFERING OF NET
YOUR INVESTMENT PRICE INVESTMENT
<S> <C> <C>
Less than $50,000 5.50% 5.82%
$ 50,000 -- $99,999 4.50% 4.71%
$100,000 -- $249,999 3.50% 3.63%
$250,000 -- $499,999 2.50% 2.56%
$500,000 -- $999,999 2.00% 2.04%
$1 million or more(1) 0% 0%
</TABLE>
CLASS A sales charges for the Bond Income Strategy Fund and High Yield Fund are
as follows:
<TABLE>
<CAPTION>
AS A % OF AS A %
OFFERING OF NET
YOUR INVESTMENT PRICE INVESTMENT
<S> <C> <C>
Less than $50,000 4.50% 4.71%
$ 50,000 -- $99,999 4.00% 4.17%
$100,000 -- $249,999 3.50% 3.63%
$250,000 -- $499,999 2.50% 2.56%
$500,000 -- $999,999 2.00% 2.04%
$1 million or more(1) 0% 0%
</TABLE>
(1) Investments of $1 million or more in Class A shares may be made with no
front-end sales charge. However, there is a contingent deferred sales charge
(CDSC) of 1% on any shares sold within 18 months of purchase. For purposes
of this CDSC, all purchases made during a calendar month are counted as
having been made on the first day of that month. The CDSC is based on the
lesser of the original purchase cost or the current market value of the
shares being sold, and is not charged on shares you acquired by reinvesting
your dividends. To keep your CDSC as low as possible, each time you place a
request to sell shares we will first sell any shares in your account that
are not subject to a CDSC.
CLASS B shares are offered at their net asset value per share, without any
initial sales charge. However, you may be charged a contingent deferred sales
charge (CDSC) on shares you sell within a certain time after you bought them, as
described in the tables below. There is no CDSC on shares acquired through
reinvestment of dividends. The CDSC is based on the original purchase cost or
the current market value of
30 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 36
the shares being sold, whichever is less. The CDSCs are as follows:
<TABLE>
<CAPTION>
YEARS AFTER
PURCHASE CDSC
<S> <C>
1st year 5.00%
2nd year 4.00%
3rd year 3.00%
4th year 3.00%
5th year 2.00%
6th year 1.00%
After 6 years None
</TABLE>
Because in most cases it is more advantageous for an investor to purchase Class
A shares for amounts in excess of $500,000, orders for amounts of $500,000 or
greater will be considered purchases of Class A shares.
CLASS C sales charges for all funds are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FRONT END SALES CHARGE CDSC
<CAPTION>
AS A % OF AS A % OF YEARS
OFFERING NET AFTER
PRICE(1) INVESTMENT PURCHASE CDSC
<S> <C> <C> <C>
1.01% 1.00%
1.00% 1st year
</TABLE>
(1) The term offering price includes the front end sales load.
Because in most cases it is more advantageous for an investor to purchase Class
A shares for amounts in excess of $1,000,000, orders for amounts of $1,000,000
or greater will be considered purchases of Class A shares.
For purposes of Class B and Class C CDSCs, all purchases made during a calendar
month are counted as having been made on the first day of that month. CDSC
calculations are based on the number of shares involved, not on the value of
your account. To keep your CDSC as low as possible, each time you place a
request to sell shares we will first sell any shares in your account that carry
no CDSC. If there are not enough of these to meet your request, we will sell
those shares that have the lowest CDSC.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCING YOUR CLASS A SALES CHARGES There are several ways you can combine
multiple purchases of Class A shares of the funds to take advantage of the
breakpoints in the sales charge schedule. The first three ways can be combined
in any manner:
- - ACCUMULATION PRIVILEGE -- lets you add the value of any shares of the funds
you or members of your family already own to the amount of your next Class A
investment for purposes of calculating the sales charge. In addition, if you
are a natural person who owns a Hartford Director (or version thereof)
variable annuity or single premium variable life contract, the current account
value of your contract or policy will be included. You must notify your broker
that you are eligible for this privilege each time you make a purchase.
- - LETTER OF INTENTION -- lets you purchase Class A shares of a fund over a
13-month period and receive the same sales charge as if all shares had been
purchased at once.
- - COMBINATION PRIVILEGE -- lets you combine Class A shares of multiple funds for
purposes of calculating the sales charge.
CDSC WAIVERS As long as the transfer agent is notified at the time you sell,
the CDSC for each share class will generally be waived in the following cases:
- - to make payments through certain systematic withdrawal plans,
- - to make certain distributions from a retirement plan,
- - because of shareholder death or disability,
- - because of the death or disability of the grantor of a living trust.
In addition, the CDSC is waived for redemptions made under reorganization,
liquidation, merger or acquisition transactions involving other investment
companies.
REINSTATEMENT PRIVILEGE If you sell shares of a fund, you may reinvest some or
all of the proceeds in the same share class of any fund within 180 days without
a sales charge, as long as the transfer agent is notified before you invest. If
you paid a CDSC when you sold your shares, you will be credited with the amount
of the CDSC. All accounts involved must have the same registration.
WAIVERS FOR CERTAIN INVESTORS Class A shares may be offered without front-end
sales charges or CDSCs to various individuals and institutions, including:
- - selling brokers and their employees and sales representatives,
- - financial representatives utilizing fund shares in fee-based investment
products under signed agreement with the funds,
- - present or former officers, directors and employees (and their families) of
the funds, The Hartford, Wellington Management, the transfer agent, and their
affiliates,
- - participants in certain retirement plans with at least 100 eligible employees
or if the total amount invested is $500,000 or more (18-month CDSC applies),
- - individuals purchasing shares with the proceeds from shares redeemed within
the last 60 days on which an initial or contingent deferred sales charge was
paid,
- - one or more members of a group (including spouses and dependent children) of
at least 100 persons engaged, or previously engaged in a common business,
profession, civic or charitable endeavor or other activity.
THE HARTFORD MUTUAL FUNDS, INC. 31
<PAGE> 37
OPENING AN ACCOUNT
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investment for each
fund is as follows:
- non-retirement accounts: $500
- retirement accounts: $250
- Automatic Investment Plans $25 to open; you must invest at least $25 a
month
Minimum investment amounts may be waived for employees of The Hartford,
Wellington Management and their affiliates.
3 Complete the appropriate parts of the account application including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional application if you want to
add privileges later. If you have questions, please contact your financial
representative or call the transfer agent at the number shown below.
4 Make your initial investment selection. You and your financial representative
can initiate any purchase, exchange or sale of shares.
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 8416
BOSTON, MA 02266-8416 OR CONTACT YOUR FINANCIAL REPRESENTATIVE FOR INSTRUCTIONS
AND ASSISTANCE.
</TABLE>
32 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 38
BUYING SHARES
<TABLE>
<C> <C> <S> <C> <C>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
BY CHECK
- Make out a check for the investment amount, - Make out a check for the investment amount,
CHECK ICON payable to "The Hartford Mutual Funds, Inc." payable to "The Hartford Mutual Funds, Inc."
- Deliver the check and your completed - Fill out the detachable investment slip from
application to your financial representative, an account statement. If no slip is available,
or mail to the address listed below. include a note specifying the fund name, your
share class, your account number and the
name(s) in which the account is registered.
- Deliver the check and your investment slip or
note to your financial representative, or mail
to the address listed below.
BY EXCHANGE
- Call your financial representative or the - Call your financial representative or the
EXCHANGE ICON transfer agent at the number below to request transfer agent at the number below to request
an exchange. The minimum exchange amount is an exchange. The minimum exchange amount is
$500 per fund. $500 per fund.
BY WIRE
- Deliver your completed application to your - Instruct your bank to wire the amount of your
WIRE ICON financial representative, or mail it to the investment to:
address below. State Street Bank and Trust Company
Account # 9905-205-2
- Obtain your account number by calling your Routing # 011000028
financial representative or the phone number
below. Specify the fund name, your share class, your
account number and the name(s) in which the
- Instruct your bank to wire the amount of your account is registered. Your bank may charge a
investment to: fee to wire funds.
State Street Bank and Trust Company
Account # 9905-205-2
Routing # 011000028
Specify the fund name, your choice of share
class, the new account number and the name(s)
in which the account is registered. Your bank
may charge a fee to wire funds.
BY PHONE
- See "By Wire" and "By Exchange" - Verify that your bank or credit union is a
PHONE ICON member of the Automated Clearing House (ACH)
system.
- Complete the "Telephone Exchanges and
Telephone Redemption" and "Bank Account or
Credit Union Information" sections on your
account application.
- Call the transfer agent at the number below to
verify that these features are in place on
your account.
- Tell the transfer agent representative the
fund name, your share class, your account
number, the name(s) in which the account is
registered and the amount of your investment.
To open or add to an account using the Automatic Investment Plan,
see "Additional Investor Services".
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 8416
BOSTON, MA 02266-8416 OR CONTACT YOUR FINANCIAL REPRESENTATIVE FOR INSTRUCTIONS
AND ASSISTANCE.
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 33
<PAGE> 39
SELLING SHARES
<TABLE>
<C> <C> <S>
BY LETTER
- Write a letter of instruction or complete a power of
LETTER ICON attorney indicating the fund name, your share class, your
account number, the name(s) in which the account is
registered and the dollar value or number of shares you wish
- to sell.
- Include all signatures and any additional documents that may
be required (see next page)
Mail the materials to the address below.
- A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
letter of instruction.
BY PHONE
- Restricted to sales of up to $50,000 in any 7-day period.
PHONE ICON
- For automated service 24 hours a day using your touch-tone
phone, call the number shown below.
-
To place your order with a representative, call the transfer
agent at the number below between 8 A.M. and 6 P.M. Eastern
Time on most business days.
BY WIRE OR ELECTRONIC FUNDS TRANSFER (EFT)
- Fill out the "Telephone Exchanges and Telephone Redemption"
WIRE ICON and "Bank Account or Credit Union Information" sections of
your new account application.
-
Call the transfer agent at the number below to verify that
the telephone redemption privilege is in place on an
- account, or to request the forms to add it to an existing
account.
Amounts of $1,000 or more will be wired on the next business
day. Your bank may charge a fee for this service.
- Amounts of less than $1,000 may be sent by EFT or by check.
Funds from EFT transactions are generally available by the
second business day. Your bank may charge a fee for this
service.
- Phone requests are limited to amounts up to $50,000 in a
7-day period.
BY EXCHANGE
- Obtain a current prospectus for the fund into which you are
ARROW ICON exchanging by calling your financial representative or the
transfer agent at the number below.
-
Call your financial representative or the transfer agent to
request an exchange.
BY CHECK -- APPLIES TO MONEY MARKET FUND (CLASS A SHARES ONLY)
- Fill out the checkwriting section of the application.
CHECK ICON
- Request checkwriting on your account application.
- Verify that the shares to be sold were purchased more than
15 days earlier or were purchased by wire.
-
Write a check for any amount over $100.
To sell shares through a systematic withdrawal plan, see "Additional Investor
Services".
</TABLE>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 8416
BOSTON, MA 02266-8416 OR CONTACT YOUR
FINANCIAL REPRESENTATIVE
FOR INSTRUCTIONS AND ASSISTANCE.
34 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 40
SELLING SHARES IN WRITING
<TABLE>
<C> <C> <S>
BY LETTER
In certain circumstances, you will need to make your request to sell shares in
writing. You may need to include additional items with your request, as shown
in the table below. You may also need to include a signature guarantee, which
protects you against fraudulent orders. You will need a signature guarantee
if:
- your address of record has changed within the past 30 days
LETTER ICON
- you are selling more than $50,000 worth of shares
- you are requesting payment other than by a check mailed to
the address of record and payable to the registered owner(s)
Please note that a notary public CANNOT provide a signature guarantee. Please
check with a representative of your bank or other financial institution about
obtaining a signature guarantee.
REQUIREMENTS FOR WRITTEN REQUESTS BY SELLER
OWNERS OF INDIVIDUAL, JOINT, SOLE PROPRIETORSHIP, UGMA/UTMA (CUSTODIAL
ACCOUNTS FOR MINORS) OR GENERAL PARTNER ACCOUNTS.
- Letter of instruction.
- On the letter, the signatures and titles of all persons
authorized to sign for the account, exactly as the account
is registered.
- Signature guarantee if applicable (see above).
OWNERS OF CORPORATE OR ASSOCIATION ACCOUNTS.
- Letter of instruction.
- Corporate resolution, certified within the past twelve
months.
- On the letter and the resolution, the signature of the
person(s) authorized to sign for the account.
- Signature guarantee if applicable (see above).
OWNERS OR TRUSTEES OF TRUST ACCOUNTS.
- Letter of instruction.
- On the letter, the signature(s) of the trustee(s).
- Provide a copy of the trust document certified within the
past twelve months.
- Signature guarantee if applicable (see above).
JOINT TENANCY SHAREHOLDERS WHOSE CO-TENANTS ARE DECEASED.
- Letter of instruction signed by surviving tenant.
- Copy of death certificate.
- Signature guarantee if applicable (see above).
EXECUTORS OF SHAREHOLDER ESTATES.
- Letter of instruction signed by executor.
- Copy of order appointing executor, certified within the past
twelve months.
- Signature guarantee if applicable (see above).
ADMINISTRATORS, CONSERVATORS, GUARDIANS AND OTHER SELLERS OR ACCOUNT TYPES
NOT LISTED ABOVE.
- Call 1-888-843-7824 for instructions.
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 35
<PAGE> 41
TRANSACTION POLICIES
- --------------------------------------------------------------------------------
VALUATION OF SHARES
The net asset value per share (NAV) for each fund and class is determined each
business day at the close of regular trading on the New York Stock Exchange
("NYSE") (typically 4 P.M. Eastern Time). Except for the Money Market Fund, the
funds use market prices in valuing portfolio securities, but may use fair-value
estimates, as determined in good faith by the Board of Directors, if reliable
market prices are unavailable. The Money Market Fund's assets are valued at
amortized cost.
Trading on many foreign securities markets is completed at various times before
or after the close of the NYSE or on days the NYSE is not open for business.
Consequently, the calculation of a fund's NAV may take place at a time that is
different than when prices are determined for certain foreign securities. As a
result, events affecting the values of foreign portfolio securities that occur
after the close of the NYSE will not be reflected in a fund's calculation of
NAV.
BUY AND SELL PRICES
When you buy shares, you pay the NAV plus any applicable sales charges, as
described earlier. When you sell shares, you receive the NAV minus any
applicable deferred sales charges.
EXECUTION OF REQUESTS
Each fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV to be calculated after your request is received by the transfer agent or
authorized broker-dealers and third-party administrators.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.
In unusual circumstances, any fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to three business days
or longer, as allowed by federal securities laws.
TELEPHONE TRANSACTIONS
For your protection, telephone requests may be recorded in order to verify their
accuracy. Also for your protection, telephone transactions are not permitted on
accounts whose names or addresses have changed within the past 30 days. Proceeds
from telephone transactions can only be mailed to the address of record.
EXCHANGES
You may exchange shares of one fund for shares of the same class of any other,
generally without paying any
additional sales charges (except when exchanging from Class A shares of the
Money Market Fund). The registration for both accounts involved must be
identical. Class B shares will continue to age from the original date of
purchase.
Each fund reserves the right to refuse or delay exchanges by any person or group
if, in HIMCO's or Wellington Management's judgment, a fund would be unable to
invest the money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected. Your exchanges
may be restricted or refused if a fund receives or anticipates simultaneous
orders affecting significant portions of the fund's assets. In particular, a
pattern of exchanges that coincides with a "market timing" strategy may be
disruptive to the fund. Although a fund will attempt to give you prior notice
whenever it is reasonably able to do so, it may impose these restrictions at any
time. Each fund reserves the right to terminate or modify the exchange privilege
in the future.
CERTIFICATED SHARES
Shares are electronically recorded and therefore share certificates are not
issued.
SMALL ACCOUNTS
(NON-RETIREMENT ONLY)
If you draw down a non-retirement account so that its total value is less than
$1,000, you may be asked to purchase more shares within 30 days. If you do not
take action, your fund may close out your account and mail you the proceeds. You
will not be charged a CDSC if your account is closed for this reason, and your
account will not be closed if its drop in value is due to fund performance or
the effects of sales charges.
SALES IN ADVANCE OF
PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 15 business days after the purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, each fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities as prescribed by the Directors. When the shareholder sells portfolio
securities received in this fashion, he would incur a brokerage charge. Any such
securities would be
36 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 42
valued for the purposes of making such payment at the same value as used in
determining net asset value. The funds have elected to be governed by Rule 18f-1
under the 1940 Act, pursuant to which each fund is obligated to redeem shares
solely in cash up to the lesser of $250,000 or 1% of the net asset value of the
applicable fund during any 90 day period for any one account.
PAYMENT REQUIREMENTS
All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks and made payable to The Hartford Mutual Funds, Inc., or in the case
of a retirement account, to the custodian or trustee. You may not purchase
shares with a third party check.
DIVIDENDS AND ACCOUNT POLICIES
ACCOUNT STATEMENTS In general, you will receive account statements as follows:
- - after every transaction (except a dividend reinvestment) that affects your
account balances
- - after any changes of name or address of the registered owner(s)
- - in all other circumstances, every quarter
DIVIDENDS Each fund intends to distribute substantially all of its net income
and capital gains to shareholders at least once a year. Normally, dividends from
net investment income of the Small Company Fund, Capital Appreciation Fund,
MidCap Fund, International Opportunities Fund, Global Leaders Fund and Stock
Fund will be declared and paid annually; dividends from the net investment
income of the Growth and Income Fund, Dividend and Growth Fund and Advisers Fund
will be declared and paid quarterly; dividends from the net investment income of
the Bond Income Strategy Fund and High Yield Fund will be declared and paid
monthly and dividends from net investment income of the Money Market Fund will
be declared daily and paid monthly. Dividends from the Money Market Fund are not
paid on shares until the day following the date on which the shares are issued.
Unless shareholders specify otherwise, all dividends and distributions will be
automatically reinvested in additional full or fractional shares of each fund.
TAXABILITY OF DIVIDENDS Dividends you receive from a fund, whether reinvested
or taken as cash, are generally considered taxable. Dividends from a fund's
long-term capital gains are taxable as capital gains; dividends from short-term
capital gains and income are generally taxable as ordinary income. Some
dividends paid in January may be taxable as if they had been paid the previous
December. Tax rates may vary depending on how long a fund investment is held.
See your application for distribution options.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
TAXABILITY OF TRANSACTIONS Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
ADDITIONAL INVESTOR SERVICES
ELECTRONIC TRANSFERS THROUGH AUTOMATED CLEARING HOUSE (ACH) NETWORK allow you to
initiate a purchase or redemption for as little as $100 or as much as $50,000
between your bank account and fund account using the ACH network. Sales charges
and initial purchase minimums apply.
AUTOMATIC INVESTMENT PLAN (AIP) AIP lets you set up regular investments from
your paycheck or bank account to The Hartford Mutual Fund(s) of your choice. You
determine the frequency and amount of your investments, and you can terminate
your program at any time. To establish:
- - Complete the appropriate parts of your account application.
- - If you are using AIP to open an account, make out a check ($25 minimum) for
your first investment amount payable to "The Hartford Mutual Funds, Inc."
Deliver your check and application to your financial representative or the
transfer agent.
SYSTEMATIC WITHDRAWAL PLAN This plan may be used for routine bill payments or
periodic withdrawals from your account. To establish:
- - Make sure you have at least $5,000 worth of shares in your account and that
the amount per transaction is $50 or more per fund.
- - Make sure you are not planning to invest more money in this account (buying
shares during a period when you are also selling shares of the same fund is
not advantageous to you, because of sales charges).
- - SPECIFY THE PAYEE(S). The payee may be yourself or any other party, and there
is no limit to the number of payees you may have, as long as they are all on
the same payment schedule.
- - Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
- - FILL OUT THE RELEVANT PART OF THE ACCOUNT APPLICATION. To add a systematic
withdrawal plan to an existing account, contact your financial representative
or the transfer agent.
THE HARTFORD MUTUAL FUNDS, INC. 37
<PAGE> 43
DOLLAR COST AVERAGING PROGRAMS (DCA) let you set up monthly or quarterly
exchanges from one fund to the same class of shares of another fund. To
establish:
- - Fill out the relevant part of the account application.
- - Be sure that the amount is for $100 or more.
- - Be sure that the accounts involved have identical registrations.
AUTOMATIC DIVIDEND DIVERSIFICATION (ADD) lets you automatically reinvest
dividends and capital gains paid by one fund into the same class of another
fund. To establish:
- - Fill out the relevant portion of the account application.
- - Be sure that the accounts involved have identical registrations.
RETIREMENT PLANS The Hartford Mutual Funds, Inc. offer a range of retirement
plans, including traditional and Roth IRAs, SIMPLE plans, SEPs and 401(k) plans.
Using these plans, you can invest in any fund offered by The Hartford Mutual
Funds, Inc. with a low minimum investment of $250. To find out more, call
1-888-843-7824.
38 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 44
ADDITIONAL SHARE CLASSES
- --------------------------------------------------------------------------------
Each fund also offers Class Y shares by a separate prospectus. Class Y shares
are available only to the following types of institutional investors: (i)
tax-qualified plans which have (a) at least $10 million in plan assets, or (b)
750 or more employees eligible to participate at the time of purchase; (ii)
banks and insurance companies purchasing shares for their own account; (iii)
investment companies; and (iv) tax-qualified retirement plans of The Hartford,
Wellington Management or broker-dealer wholesalers and their affiliates.
Class Y shares are available to eligible institutional investors at net asset
value without the imposition of an initial or deferred sales charge and are not
subject to ongoing distribution fees imposed under a plan adopted pursuant to
Rule 12b-1 under the 1940 Act. The minimum initial investment in Class Y shares
is $1,000,000, but this requirement may be waived at the discretion of the
fund's officers. The differences in class expenses may affect performance.
The Systematic Withdrawal Plan, Dollar Cost Averaging Plan, Automatic Dividend
Diversification Plan and Automatic Investment Plan are not available for Class Y
shares.
If you are considering a purchase of Class Y shares of a fund, please call the
Transfer Agent at 1-888-843-7824 to obtain information about eligibility.
THE HARTFORD MUTUAL FUNDS, INC. 39
<PAGE> 45
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD SMALL COMPANY FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/96- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97 12/31/96(1) 12/31/98(6)
--------- -------- ----------- -------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.16 $10.68 $10.00 $12.04 $10.65 $10.00 $10.00
Income from investment operations:
Net investment income (loss) (0.06) (0.02) (0.02) (0.12) (0.03) (0.02) (0.02)
Net realized and unrealized gain
(loss) on investments 1.33 2.05 1.42 1.29 1.97 1.39 0.50
------- ------- ------- ------- ------- ------- -------
Total from investment operations 1.27 2.03 1.40 1.17 1.94 1.37 0.48
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (0.12) (0.55) (0.72) (0.12) (0.55) (0.72) 0.00
Return of capital 0.000 0.000 0.000 0.000 0.000 0.000 0.00
------- ------- ------- ------- ------- ------- -------
Total distributions (0.12) (0.55) (0.72) (0.12) (0.55) (0.72) 0.00
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $13.31 $12.16 $10.68 $13.09 $12.04 $10.65 $10.48
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN(2) 10.46% 19.28% 14.11%(3) 9.73% 18.49% 13.81%(3) 4.80%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $37,623 $19,391 $4,673 $18,345 $9,694 $241 $2,765
Ratio of expenses to average net
assets before waivers and
reimbursements 1.52% 1.77% 4.24%(4) 2.22% 2.53% 20.03%(4) 2.46%(4)
Ratio of expenses to average net
assets after waivers and
reimbursements 1.45% 1.45% 1.45%(4) 2.15% 2.15% 2.15%(4) 2.15%(4)
Ratio of net investment income (loss)
to average net assets (0.79%) (0.61%) (0.60%)(4) (1.49%) (1.30%) (1.30%)(4) (1.49%)(4)
Portfolio turnover rate(5) 266.82% 255.37% 69.92% -- -- -- --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(6) Class C shares were first offered on July 31, 1998.
40 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 46
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD CAPITAL APPRECIATION FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/96- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97 12/31/96(1) 12/31/98(6)
--------- -------- ----------- -------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $19.90 $13.36 $10.00 $19.71 $13.32 $10.00 $10.00
Income from investment operations:
Net investment income (loss) (0.10) (0.03) (0.03) (0.21) (0.06) (0.02) (0.03)
Net realized and unrealized gain
(loss) on investments 0.75 7.34 3.80 0.71 7.22 3.75 0.24
-------- ------- ------- -------- -------- ------- -------
Total from investment operations 0.65 7.31 3.77 0.50 7.16 3.73 0.21
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (0.13) (0.77) (0.41) (0.13) (0.77) (0.41) 0.00
Return of capital 0.000 0.000 0.000 0.000 0.000 0.000 0.00
-------- ------- ------- -------- -------- ------- -------
Total distributions (0.13) (0.77) (0.41) (0.13) (0.77) (0.41) 0.00
-------- ------- ------- -------- -------- ------- -------
Net asset value, end of period $20.42 $19.90 $13.36 $20.08 $19.71 $13.32 $10.21
======== ======= ======= ======== ======== ======= =======
TOTAL RETURN(2) 3.26% 55.11% 37.75%(3) 2.52% 54.15% 37.35%(3) 2.10%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $364,951 $233,601 $9,028 $290,756 $174,392 $889 $15,231
Ratio of expenses to average net
assets before waivers and
reimbursements 1.44% 1.64% 4.10%(4) 2.15% 2.38% 9.05%(4) 2.29%(4)
Ratio of expenses to average net
assets after waivers and
reimbursements 1.44% 1.45% 1.45%(4) 2.15% 2.15% 2.15%(4) 2.15%(4)
Ratio of net investment income (loss)
to average net assets (0.70%) (0.80%) (0.70%)(4) (1.39%) (1.46%) (1.53%)(4) 1.34%(4)
Portfolio turnover rate(5) 123.42% 119.62% 149.99%(3) -- -- -- --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(6) Class C shares were first offered on July 31, 1998.
THE HARTFORD MUTUAL FUNDS, INC. 41
<PAGE> 47
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MIDCAP FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C -
CLASS A - CLASS B - PERIOD ENDED:
PERIOD ENDED: PERIOD ENDED: 7/31/98-
12/31/98(1) 12/31/98(1) 12/31/98(6)
------------- ------------- ---------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00 $10.00 $10.00
Income from investment operations:
Net investment income (loss) (0.05) (0.10) (0.03)
Net realized and unrealized gain (loss) on investments 2.35 2.32 0.90
------- ------- -------
Total from investment operations 2.30 2.22 0.87
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains 0.00 0.00 0.00
Return of capital 0.00 0.00 0.00
------- ------- -------
Total distributions 0.00 0.00 0.00
------- ------- -------
Net asset value, end of period $12.30 $12.22 $10.87
======= ======= =======
TOTAL RETURN(2) 23.12% 22.32% 8.70%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $24,294 $8,403 $1,077
Ratio of expenses to average net assets before waivers and
reimbursements 1.57% 2.31% 2.57%(5)
Ratio of expenses to average net assets after waivers and
reimbursements 1.45% 2.15% 2.15%(5)
Ratio of net investment income (loss) to average net assets (0.78%) (1.48%) (1.45%)(5)
Portfolio turnover rate(3) 139.02% -- --
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
December 31, 1997.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
(6) Class C shares were first offered on July 31, 1998.
42 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 48
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/96- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97 12/31/96(1) 12/31/98(6)
-------- -------- -------------- -------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.58 $10.72 $10.00 $10.49 $10.69 $10.00 $10.00
Income from investment operations:
Net investment income (loss) 0.07 0.09 (0.02) 0.01 0.07 (0.01) (0.01)
Net realized and unrealized gain
(loss) on investments 1.26 (0.01) 0.79 1.23 (0.06) 0.80 (0.39)
------- ------- ------- ------- ------- ------- -------
Total from investment operations 1.33 0.08 0.81 1.24 0.01 0.79 (0.40)
Less distributions:
Dividends from net investment
income (0.02) (0.05) (0.06) 0.00 (0.04) (0.07) (0.03)
Distributions from capital gains 0.000 (0.17) (0.03) 0.00 (0.17) (0.03) 0.00
Return of capital 0.000 0.000 0.000 0.00 0.000 0.000 0.00
------- ------- ------- ------- ------- ------- -------
Total distributions (0.02) (0.22) (0.09) 0.00 (0.21) (0.10) (0.03)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $11.89 $10.58 $10.72 $11.73 $10.49 $10.69 $9.57
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN(2) 12.53% 0.84% 8.14%(3) 11.82% 0.12% 7.86%(3) (4.05%)(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $32,014 $15,701 $4,294 $11,767 $7,188 $163 $1,379
Ratio of expenses to average net
assets before waivers and
reimbursements 1.84% 2.25% 5.35%(4) 2.56% 3.03% 32.61%(4) 2.83%(4)
Ratio of expenses to average net
assets after waivers and
reimbursements 1.65% 1.65% 1.65%(4) 2.35% 2.35% 2.35%(4) 2.35%(4)
Ratio of net investment income (loss)
to average net assets 0.69% 0.88% 0.51%(4) 0.01% (0.05%) (0.86%)(4) (0.71%)(4)
Portfolio turnover rate(5) 148.58% 59.16% 21.51%(3) -- -- -- --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(6) Class C shares were first offered on July 31, 1998.
THE HARTFORD MUTUAL FUNDS, INC. 43
<PAGE> 49
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GLOBAL LEADERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
9/30/98- 9/30/98- 9/30/98-
12/31/98(1) 12/31/98(1) 12/31/98(1)
--------------- ------------- -------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00 $10.00 $10.00
Income from investment operations:
Net investment income (loss) (0.01) (0.02) (0.02)
Net realized and unrealized gain (loss) on investments 3.03 3.02 3.02
------- ------ ------
Total from investment operations 3.02 3.00 3.00
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.35) (0.35) (0.35)
Return of capital 0.00 0.00 0.00
------- ------ ------
Total distributions (0.35) (0.35) (0.35)
------- ------ ------
Net asset value, end of period $12.67 $12.65 $12.65
======= ====== ======
TOTAL RETURN(2) 30.36%(4) 30.16%(4) 30.16%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,771 $486 $517
Ratio of expenses to average net assets before waivers and
reimbursements 2.66%(5) 3.55%(5) 3.57%(5)
Ratio of expenses to average net assets after waivers and
reimbursements 1.65%(5) 2.35%(5) 2.35%(5)
Ratio of net investment income (loss) to average net assets (0.19%)(5) (0.92%)(5) (0.90%)(5)
Portfolio turnover rate(3) 49.04% -- --
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
44 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 50
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD STOCK FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/96- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97 12/31/96(1) 12/31/98(6)
-------- -------- ----------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.16 $11.53 $10.00 $15.01 $11.50 $10.00 $10.00
Income from investment operations:
Net investment income (loss) (0.01) 0.00 0.02 (0.05) (0.02) 0.00 (0.01)
Net realized and unrealized gain (loss)
on investments 4.75 3.66 1.53 4.60 3.56 1.52 0.48
-------- ------- ------- -------- ------- ------- -------
Total from investment operations 4.74 3.66 1.55 4.55 3.54 1.52 0.47
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 (0.02) (0.01)
Distributions from capital gains (0.19) (0.03) (0.02) (0.19) (0.03) 0.00 (0.01)
Return of capital (0.01) 0.000 0.000 (0.01) 0.000 0.000 0.00
-------- ------- ------- -------- ------- ------- -------
Total distributions (0.20) (0.03) (0.02) (0.20) (0.03) (0.02) (0.02)
-------- ------- ------- -------- ------- ------- -------
Net asset value, end of period $19.70 $15.16 $11.53 $19.36 $15.01 $11.50 $10.45
======== ======= ======= ======== ======= ======= =======
TOTAL RETURN(2) 31.33% 31.78% 15.50%(3) 30.38% 30.82% 15.20%(3) 6.60%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $268,226 $65,763 $6,273 $185,205 $35,294 $1,254 $36,039
Ratio of expenses to average net assets
before waivers and reimbursements 1.44% 1.64% 3.96%(4) 2.16% 2.38% 7.76%(4) 2.24%(4)
Ratio of expenses to average net assets
after waivers and reimbursements 1.44% 1.45% 1.45%(4) 2.15% 2.15% 2.15%(4) 2.15%(4)
Ratio of net investment income (loss) to
average net assets (0.07%) 0.06% 0.71%(4) (0.77%) (0.66%) (0.12%)(4) (0.76%)(4)
Portfolio turnover rate(5) 37.03% 42.83% 11.87%(3) -- -- -- --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(6) Class C shares were first offered on July 31, 1998.
THE HARTFORD MUTUAL FUNDS, INC. 45
<PAGE> 51
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GROWTH AND INCOME FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
4/30/98- 4/30/98- 7/31/98-
12/31/98(1) 12/31/98(1) 12/31/98(6)
------------- ------------- -------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00 $10.00 $10.00
Income from investment operations:
Net investment income (loss) 0.02 (0.01) 0.01
Net realized and unrealized gain (loss) on investments 1.45 1.43 1.27
------- ------- -------
Total from investment operations 1.47 1.42 1.28
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.02) (0.01) (0.03)
Return of capital 0.00 0.00 0.00
------- ------- -------
Total distributions (0.02) (0.01) (0.03)
------- ------- -------
Net asset value, end of period $11.45 $11.41 $11.25
======= ======= =======
TOTAL RETURN(2) 14.78%(4) 14.21%(4) 12.80%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $11,120 $3,538 $3,726
Ratio of expenses to average net assets before waivers and
reimbursements 1.58%(5) 2.32%(5) 2.38%(5)
Ratio of expenses to average net assets after waivers and
reimbursements 1.45%(5) 2.15%(5) 2.15%(5)
Ratio of net investment income (loss) to average net assets 0.23%(5) (0.47%)(5) (0.53%)(5)
Portfolio turnover rate(3) 35.10% -- --
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
April 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
(6) Class C shares were first offered on July 31, 1998.
46 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 52
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD DIVIDEND AND GROWTH FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/96- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97 12/31/96(1) 12/31/98(6)
-------- -------- -------------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $14.72 $11.45 $10.00 $14.61 $11.40 $10.00 $10.00
Income from investment operations:
Net investment income (loss) 0.15 0.13 0.07 0.06 0.13 0.01 0.03
Net realized and unrealized gain
(loss) on investments 1.97 3.40 1.46 1.92 3.30 1.48 0.44
-------- ------- ------- -------- ------- ------- ------
Total from investment operations 2.12 3.53 1.53 1.98 3.43 1.49 0.47
Less distributions:
Dividends from net investment income (0.15) (0.12) (0.06) (0.05) (0.08) (0.07) (0.06)
Distributions from capital gains (0.07) (0.14) (0.02) (0.07) (0.14) (0.02) (0.07)
Return of capital 0.000 (0.000) 0.000 0.000 0.000 0.000 0.00
-------- ------- ------- -------- ------- ------- ------
Total distributions (0.22) (0.26) (0.08) (0.12) (0.22) (0.09) (0.13)
-------- ------- ------- -------- ------- ------- ------
Net asset value, end of period $16.62 $14.72 $11.45 $16.47 $14.61 $11.40 $10.34
======== ======= ======= ======== ======= ======= ======
TOTAL RETURN(2) 14.47% 30.99% 15.29%(3) 13.62% 30.20% 14.82%(3) 4.82%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $182,495 $67,861 $6,083 $108,344 $33,730 $33,741 $9,682
Ratio of expenses to average net
assets before waivers and
reimbursements 1.38% 1.59% 4.12%(4) 2.10% 2.34% 12.97%(4) 2.20%(4)
Ratio of expenses to average net
assets after waivers and
reimbursements 1.38% 1.40% 1.40%(4) 2.10% 2.10% 2.10%(4) 2.10%(4)
Ratio of net investment income (loss)
to average net assets 1.08% 1.42% 1.95%(4) 0.39% 0.69% 0.82%(4) 0.23%(4)
Portfolio turnover rate(5) 46.43% 28.75% 29.80%(3) -- -- -- --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(6) Class C shares were first offered on July 31, 1998.
THE HARTFORD MUTUAL FUNDS, INC. 47
<PAGE> 53
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD ADVISERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/96- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97 12/31/96(1) 12/31/98(6)
--------- -------- ----------- -------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.41 $11.08 $10.00 $13.33 $11.05 $10.00 $10.00
Income from investment operations:
Net investment income (loss) 0.23 0.16 0.09 0.15 0.16 0.02 0.10
Net realized and unrealized gain
(loss) on investments 2.58 2.41 1.07 2.54 2.31 1.11 0.41
-------- ------- ------- -------- ------- ------- -------
Total from investment operations 2.81 2.57 1.16 2.69 2.47 1.13 0.51
Less distributions:
Dividends from net investment income (0.25) (0.17) (0.08) (0.17) (0.12) (0.08) (0.14)
Distributions from capital gains (0.26) (0.07) 0.00 (0.26) (0.07) 0.00 (0.26)
Return of capital 0.000 0.000 0.000 0.000 0.000 0.000 0.00
-------- ------- ------- -------- ------- ------- -------
Total distributions (0.51) (0.24) (0.08) (0.42) (0.19) (0.08) (0.40)
-------- ------- ------- -------- ------- ------- -------
Net asset value, end of period $15.71 $13.41 $11.08 $15.59 $13.33 $11.05 $10.11
======== ======= ======= ======== ======= ======= =======
TOTAL RETURN(2) 21.09% 23.30% 11.56%(3) 20.27% 22.44% 11.28%(3) 5.25%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $316,435 $98,633 $14,347 $237,959 $39,334 $1,499 $54,907
Ratio of expenses to average net
assets before waivers and
reimbursements 1.38% 1.55% 2.94%(4) 2.11% 2.31% 6.71%(4) 2.18%(4)
Ratio of expenses to average net
assets after waivers and
reimbursements 1.38% 1.40% 1.40%(4) 2.10% 2.10% 2.10%(4) 2.10%(4)
Ratio of net investment income (loss)
to average net assets 1.67% 1.54% 2.13%(4) 0.98% 0.80% 1.24%(4) 1.06%(4)
Portfolio turnover rate(5) 40.24% 38.62% 19.75%(3) -- -- -- --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(6) The Class C shares were first offered on July 31, 1998.
48 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 54
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD HIGH YIELD FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
9/30/98- 9/30/98- 9/30/98-
12/31/98(1) 12/31/98(1) 12/31/98(1)
--------------- ----------- ---------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00 $10.00 $10.00
Income from investment operations:
Net investment income (loss) 0.19 0.16 0.16
Net realized and unrealized gain (loss) on investments 0.13 0.14 0.14
------ ------ ------
Total from investment operations 0.32 0.30 0.30
Less distributions:
Dividends from net investment income (0.17) (0.16) (0.16)
Distributions from capital gains 0.00 0.00 0.00
Return of capital 0.00 0.00 0.00
------ ------ ------
Total distributions (0.17) (0.16) (0.16)
------ ------ ------
Net asset value, end of period $10.15 $10.14 $10.14
====== ====== ======
TOTAL RETURN(2) 3.33%(4) 3.09%(4) 3.08%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,507 $2,322 $2,278
Ratio of expenses to average net assets before waivers and
reimbursements 1.53%(5) 2.31%(5) 2.31%(5)
Ratio of expenses to average net assets after waivers and
reimbursements 1.40%(5) 2.10%(5) 2.10%(5)
Ratio of net investment income (loss) to average net assets 7.06%(5) 6.50%(5) 6.49%(5)
Portfolio turnover rate(3) 10.85% -- --
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
THE HARTFORD MUTUAL FUNDS, INC. 49
<PAGE> 55
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD BOND INCOME STRATEGY FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/96- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97 12/31/96(1) 12/31/98(6)
--------- -------- ----------- -------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.61 $10.26 $10.00 $10.58 $10.25 $10.00 $10.00
Income from investment operations:
Net investment income (loss) 0.54 0.57 0.26 0.47 0.53 0.20 0.18
Net realized and unrealized gain
(loss) on investments 0.23 0.50 0.31 0.22 0.46 0.34 0.14
------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.77 1.07 0.57 0.69 0.99 0.54 0.32
Less distributions:
Dividends from net investment income (0.54) (0.56) (0.25) (0.47) (0.50) (0.23) (0.20)
Distributions from capital gains (0.08) (0.16) (0.06) (0.08) (0.16) (0.06) (0.06)
Return of capital 0.000 0.000 0.000 0.000 0.000 0.000 0.00
------- ------- ------- ------- ------- ------- -------
Total distributions (0.62) (0.72) (0.31) (0.55) (0.66) (0.29) (0.26)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $10.76 $10.61 $10.26 $10.72 $10.58 $10.25 $10.06
======= ======= ======= ======= ======= ======= =======
TOTAL RETURN(2) 7.48% 10.80% 5.73%(3) 6.70% 9.96% 5.38%(3) 3.19%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $47,143 $28,589 $10,925 $16,772 $5,745 $124 $5,420
Ratio of expenses to average net
assets before waivers and
reimbursements 1.27% 1.44% 2.72%(4) 2.01% 2.19% 22.36%(4) 2.13%(4)
Ratio of expenses to average net
assets after waivers and
reimbursements 1.25% 1.25% 1.25%(4) 1.95% 1.95% 1.95%(4) 1.95%(4)
Ratio of net investment income (loss)
to average net assets 5.04% 5.59% 5.72%(4) 4.32% 4.85% 5.22%(4) 4.13%(4)
Portfolio turnover rate(5) 135.01% 220.45% 75.52%(3) -- -- -- --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(6) Class C shares were first offered on July 31, 1998.
50 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 56
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MONEY MARKET FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
7/1/96- 8/22/97- 7/31/98-
12/31/98 12/31/97 12/31/96(1) 12/31/98 12/31/97(1) 12/31/98(5)
-------- -------- -------------- -------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) 0.50 0.05 0.02 0.40 0.01 0.20
Net realized and unrealized gain (loss) on
investments 0.00 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- ------- ------
Total from investment operations 0.50 0.05 0.02 0.40 0.01 0.20
Less distributions:
Dividends from net investment income (0.50) (0.05) (0.02) (0.40) (0.01) (0.20)
Distributions from capital gains 0.00 (0.00) 0.00 0.00 0.00 0.00
Return of capital 0.000 0.000 0.000 0.000 0.00 0.000
------- ------- ------- ------- ------- ------
Total distributions (0.50) (0.05) (0.02) (0.40) (0.01) (0.20)
------- ------- ------- ------- ------- ------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= ======
TOTAL RETURN(2) 4.69% 4.73% 2.01%(3) 3.97% 1.45%(3) 1.58%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $29,424 $22,578 $10,754 $11,936 $4,449 $1,203
Ratio of expenses to average net assets before
waivers and reimbursements 1.20% 1.23% 2.70%(4) 1.86% 3.63%(4) 2.02%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.00% 1.00% 1.00%(4) 1.70% 1.70%(4) 1.70%(4)
Ratio of net investment income (loss) to
average net assets 4.57% 4.67% 4.49%(4) 3.83% 3.92%(4) 3.57%(4)
Portfolio turnover rate N/A N/A N/A N/A N/A --
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) Class C shares were first offered on July 31, 1998.
THE HARTFORD MUTUAL FUNDS, INC. 51
<PAGE> 57
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 58
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 59
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT
TO SHAREHOLDERS
Additional information on each fund is contained in the financial statements and
portfolio holdings of the fund's annual and semi-annual reports. In the fund's
annual report you will also find a discussion of the market conditions and
investment strategies that significantly affected performance during the last
fiscal year, and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION
(SAI)
The SAI contains more detailed information about the funds.
A current SAI and annual report have been filed with the Securities and Exchange
Commission and are incorporated by reference into (are legally a part of) this
prospectus.
To request a free copy of the current annual/ semiannual report and/or the SAI
or for shareholder inquiries, please contact the funds at:
BY MAIL:
The Hartford Mutual Funds, Inc., P.O. Box 8416, Boston, MA 02266-8416
BY PHONE:
1-888-843-7824
ON THE INTERNET:
www.invest.hartfordlife.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-800-SEC-0330.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET:
www.sec.gov
SEC FILE NUMBER: 811-07589
<PAGE> 60
THE HARTFORD MUTUAL FUNDS, INC.
CLASS Y SHARES
PROSPECTUS
MAY 1, 1999
<TABLE>
<S> <C>
AS WITH ALL MUTUAL FUNDS, THE SMALL COMPANY FUND
SECURITIES AND EXCHANGE COMMISSION CAPITAL APPRECIATION FUND
HAS NOT APPROVED OR DISAPPROVED MIDCAP FUND
THESE SECURITIES OR PASSED UPON INTERNATIONAL OPPORTUNITIES FUND
THE ADEQUACY OF THIS PROSPECTUS. GLOBAL LEADERS FUND
ANY REPRESENTATION TO THE CONTRARY STOCK FUND
IS A CRIMINAL OFFENSE. GROWTH AND INCOME FUND
DIVIDEND AND GROWTH FUND
ADVISERS FUND
HIGH YIELD FUND
BOND INCOME STRATEGY FUND
MONEY MARKET FUND
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 8416
BOSTON, MA 02266-8416
<PAGE> 61
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 62
INTRODUCTION
- --------------------------------------------------------------------------------
The Hartford Mutual Funds, Inc. is a family of twelve mutual funds, each with
its own investment strategy and risk/reward profile. This prospectus relates to
the Class Y shares of each fund. Information on each fund can be found on the
pages following this introduction.
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosures carefully before investing.
CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
A summary of each fund's goals, The Hartford Small Company Fund 3
strategies, risks, performance and The Hartford Capital Appreciation Fund 5
expenses. The Hartford MidCap Fund 7
The Hartford International Opportunities Fund 9
The Hartford Global Leaders Fund 11
The Hartford Stock Fund 13
The Hartford Growth and Income Fund 15
The Hartford Dividend and Growth Fund 17
The Hartford Advisers Fund 19
The Hartford High Yield Fund 21
The Hartford Bond Income Strategy Fund 23
The Hartford Money Market Fund 25
Prior performance of similar funds 27
Description of additional Additional investment matters 28
investment strategies and
investment risks.
Investment manager and management Management of the funds 29
fee information.
Information on your About your account 30
account. Class Y investor requirements 30
Opening an account 30
Buying shares 31
Selling shares 32
Transaction policies 34
Dividends and account policies 35
Additional investor services 35
Further information on the funds. Additional share classes 36
Financial highlights 37
For more information back
cover
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 1
<PAGE> 63
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Small Company Fund seeks growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Russell 2000 Index. As of December 31, 1998 this range was between approximately
$4 million and $3.4 billion, and the average market capitalization was $560
million.
Through fundamental analysis Wellington Management identifies companies that it
believes have substantial potential for near-term capital appreciation.
Wellington Management selects securities of companies that, in its opinion:
- have potential for above-average earnings growth,
- are undervalued in relation to their investment potential,
- have positive business and/or fundamental financial characteristics that
are overlooked or misunderstood by investors, or
- are relatively obscure and undiscovered by the overall investment
community.
Fundamental analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on small
companies, its performance may be more volatile than that of a fund that invests
primarily in larger companies.
Stocks of smaller companies may be more risky than stocks of larger companies.
Many of these companies are young and have limited operating or business
history. Because these businesses frequently rely on narrow product lines and
niche markets, they can suffer severely from isolated business setbacks.
The fund's management strategy will influence performance significantly. Small
company stocks as a group could fall out of favor with the market, causing the
fund to underperform funds that focus on other types of stocks. Similarly, if
the managers' stock selection strategy doesn't perform as expected, the fund
could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD SMALL COMPANY FUND
-------------------------------
<S> <C>
'97' 19.69
'98' 11.05
</TABLE>
BEST QUARTER: up 28.04%, fourth quarter 1998
WORST QUARTER: down 20.72%, third quarter 1998
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 11.05% 18.71%
Russell 2000 Index -2.55% 13.84%
</TABLE>
INDEX: Russell 2000 Index, an unmanaged index of small company equity
securities.
2 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 64
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Mark E. Waterhouse
- Vice President of
Wellington Management
- Manager of the fund since
1997
- Joined Wellington Management
in 1995
- Investment professional
since 1984
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses(1) 0.17%
Total operating expenses(1) 1.02%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 1.00%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 105
Year 3 $ 326
Year 5 $ 566
Year 10 $1,253
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 3
<PAGE> 65
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Capital Appreciation Fund seeks growth
of capital by investing primarily in stocks selected on the basis of potential
for capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
small, medium and large companies.
Through fundamental analysis, Wellington Management identifies companies that it
believes have substantial near-term capital appreciation potential regardless of
company size or industry sector. This strategy is sometimes referred to as a
"stock picking" approach. Small and medium sized companies are selected
primarily on the basis of dynamic earnings growth potential. Larger companies
are selected primarily based on the expectation of a significant event that
Wellington Management believes will trigger an increase in the stock price.
In analyzing a prospective investment Wellington Management looks at a number of
factors, such as business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends and other related measures
of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that of a
fund that invests primarily in larger companies.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD CAPITAL APPRECIATION FUND
--------------------------------------
<S> <C>
'97' 56.00
'98' 3.68
</TABLE>
BEST QUARTER: up 32.08%, second quarter 1997
WORST QUARTER: down 21.79%, third quarter 1998
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 3.68% 38.88%
S&P 500 Index 28.56% 33.43%
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
4 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 66
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Saul J. Pannell
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1979
- Investment professional
since 1974
Mark E. Waterhouse
- Vice President of Wellington
Management
- Associate Manager of the
fund since 1996
- Joined Wellington Management
in 1995
- Investment professional
since 1984
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.80%
Distribution and service (12b-1) fees None
Other expenses(1) 0.16%
Total operating expenses(1) 0.96%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 1.00%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 98
Year 3 $ 307
Year 5 $ 533
Year 10 $1,182
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 5
<PAGE> 67
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford MidCap Fund seeks long-term growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Standard & Poor's MidCap 400 Index. As of December 31, 1998 this range was
between approximately $142 million and $11.6 billion and the average market
capitalization was $2.2 billion.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, and demographic trends. Through top down analysis, Wellington
Management anticipates trends and changes in markets and the economy
overall and identifies industries and sectors that are expected to
outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, and other related measures of value.
The fund favors high-quality growth companies. The key characteristics of
high-quality growth companies include a leadership position within an industry,
a strong balance sheet, a high return on equity, and a strong management team.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on
mid-sized companies, its performance may be more volatile than that of a fund
that invests primarily in larger companies.
Stocks of mid-sized companies may be more risky than stocks of larger companies.
These companies may be young and have more limited operating or business
history. Because these businesses frequently rely on narrower product lines and
niche markets, they can suffer from isolated business setbacks.
The fund's management strategy will influence performance significantly.
Mid-sized company stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on other types of stocks.
Similarly, if the managers' stock selection strategy doesn't perform as
expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart indicates the fund's total return for one calendar
year while the table shows the fund's performance over time (along with that of
a broad based market index for comparison). The bar chart figures and average
annual figures do not include the effect of sales charges as no sales charge is
applicable to the Class Y shares. All figures assume that all dividends and
distributions were reinvested. Keep in mind that past performance does not
indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[Hartford Midcap Fund Bar Graph]
<TABLE>
<CAPTION>
THE HARTFORD MIDCAP FUND
------------------------
<S> <C>
'98' 23.62
</TABLE>
BEST QUARTER: up 27.71%, fourth quarter 1998
WORST QUARTER: down 15.91%, third quarter 1998
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 12/31/97)
<S> <C> <C>
Class Y 23.62% 23.43%
S&P MidCap 400 Index 19.11% 19.07%
</TABLE>
INDEX: Standard & Poor's MidCap 400 Index, an unmanaged index of equity
securities.
6 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 68
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Phillip H. Perelmuter
- Vice President of Wellington
Management
- Manager of the fund since
inception (1997)
- Joined Wellington Management
in 1995
- Investment professional
since 1983
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses(1) 0.27%
Total operating expenses(1) 1.12%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 1.00%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 115
Year 3 $ 358
Year 5 $ 620
Year 10 $1,369
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 7
<PAGE> 69
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford International Opportunities Fund seeks
growth of capital by investing primarily in stocks issued by non-U.S. companies.
The fund normally invests at least 65% of its assets in stocks issued by
non-U.S. companies which trade in foreign markets generally considered to be
well established. Under normal market conditions the fund diversifies its
investments among at least three countries other than the United States. The
securities in which the fund invests are denominated in both U.S. dollars and
non-U.S. currencies and generally are traded in
non-U.S. markets.
Wellington Management uses a three-pronged investment strategy:
- Wellington Management determines the relative attractiveness of the many
countries in which the fund may invest based upon its analysis of the
economic and political environment of each country.
- Wellington Management also evaluates
industries on a global basis to determine which
industries offer the most potential for capital appreciation given current
and projected
global and local economic and market
conditions.
- Wellington Management conducts fundamental research on individual
companies to identify securities for purchase or sale. Fundamental
analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of
value.
In analyzing companies for investment, Wellington Management considers companies
for inclusion in the fund's portfolio that are typically larger, high quality
companies that operate in established markets. Characteristics of high quality
growth companies include a strong balance sheet, attractive industry trends,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[HARTFORD INTERNATIONAL OPPORTUNITY FUND BAR GRAPH]
<TABLE>
<CAPTION>
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
---------------------------------------------
<S> <C>
'97' 1.31
'98' 13.11
</TABLE>
<TABLE>
<C> <S>
BEST QUARTER: up 15.95%, fourth quarter 1998
WORST QUARTER: down 16.11%, third quarter 1998
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 13.11% 9.26%
EAFE GDP Index 26.71% 15.07%(1)
</TABLE>
INDEX: Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP") Index, an
unmanaged index of equity securities.
(1) Return is from 7/31/96 -- 12/31/98
8 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 70
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Trond Skramstad
- Senior Vice President of
Wellington Management
- Manager of the fund
since inception (1996)
- Joined Wellington Management
in 1993
- Investment professional
since 1990
Andrew S. Offit
- Vice President of Wellington
Management
- Associate Manager of the fund
since 1997
- Joined Wellington Management
in 1997
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses (1) 0.51%
Total operating expenses (1) 1.36%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 1.20%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 139
Year 3 $ 433
Year 5 $ 749
Year 10 $1,643
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 9
<PAGE> 71
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Global Leaders Fund seeks growth of
capital by investing primarily in stocks issued by U.S. companies and non-U.S.
companies.
The fund invests primarily in a diversified portfolio of common stocks covering
a broad range of countries, industries and companies. Securities in which the
fund invests are denominated in both U.S. dollars and non-U.S. currencies and
may trade in both U.S. and non-U.S. markets.
Under normal market and economic conditions, the fund invests at least 65% of
its total assets in common stocks of high-quality growth companies worldwide.
These companies must, in the opinion of Wellington Management, be leaders in
their respective industries as indicated by an established market presence and
strong global, regional or country competitive positions. Under normal market
and economic conditions, the fund will diversify its investments in securities
of issuers among at least five countries, which may include the United States.
There are no limits on the amount of the fund's assets that may be invested in
each country.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the global macro-economic and
investment environments. This includes an evaluation of U.S. and non-U.S.
economic and political conditions, fiscal and monetary policies,
demographic trends and investor sentiment. Through top down analysis,
Wellington Management anticipates trends and changes in the markets and
economy to identify companies which offer the most potential for capital
appreciation given current and projected global and local economic and
market conditions.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statements, anticipated
earnings, revenues and other related measures of value.
The fund emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a strong balance sheet, a high return on
equity, a strong management team, and attractive relative value within the
context of the global marketplace or a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history has been provided.
10 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 72
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1998)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
Andrew S. Offit
- Vice President of Wellington
Management
- Co-manager of the fund since
inception (1998)
- Joined Wellington Management
in 1997
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses(1) 1.61%
Total operating expenses(1) 2.46%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 1.20%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 252
Year 3 $ 775
Year 5 $1,325
Year 10 $2,822
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 11
<PAGE> 73
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Stock Fund seeks long-term growth of
capital, with income as a secondary consideration, by investing primarily in
stocks.
The fund normally invests at least 65% of the fund's total assets in the common
stocks of high-quality growth companies. Many of the companies in which the fund
invests have a history of paying dividends and are expected to continue paying
dividends in the future. The fund invests in a diversified portfolio of
primarily equity securities using a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, demographic trends, and investor sentiment. Through top down
analysis, Wellington Management anticipates trends and changes in markets
in the economy overall and identifies industries and sectors that are
expected to outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
of a company involves the assessment of such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
The key characteristics of high-quality growth companies favored by the fund
include a leadership position within an industry, a strong balance sheet, a high
return on equity, sustainable or increasing dividends, a strong management team
and a globally competitive position.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
The fund's management strategy will influence performance significantly.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on small- or
medium-capitalization stocks. Similarly, if the managers' stock selection
strategy doesn't perform as expected, the fund could underperform its peers or
lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD STOCK FUND
-----------------------
<S> <C>
'97' 32.33
'98' 31.80
</TABLE>
BEST QUARTER: up 20.36%, fourth quarter 1998
WORST QUARTER: down 10.12%, third quarter 1998
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 31.80% 33.33%
S&P 500 Index 28.56% 33.43%
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
12 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 74
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
Philip H. Perelmuter
- Vice President of Wellington
Management
- Associate Manager of the
fund since 1996
- Joined Wellington Management
in 1995
- Investment professional
since 1983
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.80%
Distribution and service (12b-1) fees None
Other expenses(1) 0.16%
Total operating expenses(1) 0.96%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 1.00%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 98
Year 3 $ 307
Year 5 $ 533
Year 10 $1,182
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 13
<PAGE> 75
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Growth and Income Fund seeks growth of capital
and current income by investing primarily in stocks with earnings growth
potential and steady or rising dividends.
The fund invests primarily in a diversified portfolio of common stocks that
typically have steady or rising dividends and whose prospects for capital
appreciation are considered favorable by Wellington Management.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues, dividends and other
related measures of value.
Wellington Management then complements its fundamental research with an
internally-developed analytical approach. This analytical approach consists of
both valuation and timeliness measures. Valuation factors focus on future
dividend growth and cash flow to determine the relative attractiveness of
different stocks in different industries. Timeliness focuses on stocks with
favorable earnings and stock price momentum to assess the appropriate time for
purchase.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history has been provided.
14 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 76
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
James A. Rullo
- Vice President of Wellington
Management
- Manager of the fund since
inception (1998)
- Joined Wellington Management
in 1994
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.80%
Distribution and service (12b-1) fees None
Other expenses(1) 0.40%
Total operating expenses(1) 1.20%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 1.00%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 123
Year 3 $ 383
Year 5 $ 663
Year 10 $1,461
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 15
<PAGE> 77
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Dividend and Growth Fund seeks a high
level of current income consistent with growth of capital by investing primarily
in stocks.
The fund invests primarily in a diversified portfolio of common stocks that
typically have above average income yields and whose prospects for capital
appreciation are considered favorable by Wellington Management. Under normal
market and economic conditions at least 65% of the fund's total assets are
invested in dividend-paying equity securities. The fund tends to focus on
securities of larger, well-established companies.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues and dividends.
As a key component of its fundamental analysis, Wellington Management evaluates
a company's ability to sustain and potentially increase its dividend payments.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD DIVIDEND AND GROWTH FUND
-------------------------------------
<S> <C>
'97' 31.59
'98' 14.86
</TABLE>
BEST QUARTER: up 15.92%, second quarter 1997
WORST QUARTER: down 7.92%, third quarter 1998
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 14.86% 25.60%
S&P 500 Index 28.56% 33.43%
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
16 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 78
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Laurie A. Gabriel
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1976
- Investment professional
since 1976
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.75%
Distribution and service (12b-1) fees None
Other expenses (1) 0.16%
Total operating expenses (1) 0.91%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 0.95%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 93
Year 3 $ 291
Year 5 $ 506
Year 10 $1,123
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 17
<PAGE> 79
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Advisers Fund seeks maximum long-term
total return by investing in stocks, bonds and other debt securities and money
market instruments.
The fund favors stocks issued by high-quality growth companies. The key
characteristics of high-quality growth companies include a leadership position
within an industry, a strong balance sheet, a high return on equity, sustainable
or increasing dividends, a strong management team and a globally competitive
position.
The debt securities in which the fund primarily invests include securities
issued or guaranteed by the U.S. Government and its agencies or
instrumentalities and securities rated investment grade (rated at least BBB by
Standard & Poor's Corporation or Baa by Moody's Investors Service, Inc., or if
unrated, securities deemed by Wellington Management to be of comparable quality.
The fund is not restricted to any specific maturity term.
Asset allocation decisions are based on Wellington Management's judgment of the
projected investment environment for financial assets, relative fundamental
values, the attractiveness of each asset category, and expected future returns
of each asset category. Wellington Management does not attempt to engage in
short-term market timing among asset categories. As a result, shifts in asset
allocation are expected to be gradual and continuous and the fund will normally
have some portion of its assets invested in each asset category. There is no
limit on the amount of fund assets that may be allocated to each asset category
and the allocation is in Wellington Management's discretion.
- --------------------------------------------------------------------------------
MAIN RISKS. This fund has stock market risk, interest rate risk, manager
allocation risk, credit risk and prepayment risk. You could lose money as a
result of your investment.
Stock market risk means the stocks held by the fund may decline in value due to
the activities and financial prospects of individual companies or to general
market and economic conditions.
Interest rate risk refers to the possibility that your investment may go down in
value when interest rates rise.
Manager allocation risk refers to the possibility that the portfolio managers
could incorrectly allocate assets so that the fund underperforms its peers.
Credit risk refers to the possibility that the issuing company may not be able
to pay interest and principal when due.
Prepayment risk refers to the possibility that any mortgage securities held by
the fund may be adversely affected by changes in prepayment rates on the
underlying mortgages. If prepayments increase as a result of lower interest
rates the fund may have to invest a portion of its assets at lower rates.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of broad-based market indices for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
THE HARTFORD ADVISERS FUND
--------------------------
<S> <C>
'97' 23.80
'98' 21.62
</TABLE>
BEST QUARTER: up 12.57%, second quarter 1997
WORST QUARTER: down 3.85%, third quarter 1998
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 21.62% 23.78%
S&P 500 Index 28.56% 33.43%
LGCB Index 9.47% 9.99%
</TABLE>
INDICES: S&P 500 Index and the Lehman Government Corporate Bond Index,
unmanaged indices of stocks and bonds, respectively.
18 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 80
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Paul D. Kaplan
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1996)
- Joined Wellington Management
in 1982
- Investment professional
since 1974
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1996)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.75%
Distribution and service (12b-1) fees None
Other expenses(1) 0.15%
Total operating expenses(1) 0.90%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 0.95%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 92
Year 3 $ 288
Year 5 $ 500
Year 10 $1,112
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 19
<PAGE> 81
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford High Yield Fund seeks high current
income by investing in non-investment grade debt securities. Growth of capital
is a secondary objective.
The fund normally invests at least 65%, and may invest up to 100%, of its
portfolio in non-investment grade debt securities (securities rated "Ba" or
lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or lower by
Standard and Poor's Corporation ("S&P"), or securities which, if unrated, are
determined by HIMCO to be of comparable quality). Below investment grade
securities are commonly referred to as "high yield-high risk securities" or
"junk bonds". The fund will invest no more than 10% of total assets in
securities rated below B3 by Moody's or B- by S&P, or if unrated, determined to
be of comparable quality by HIMCO. The fund may invest in bonds of any maturity
although the fund tends to have an average maturity within the intermediate-term
range.
The fund may invest up to 15% of its total assets in preferred stocks,
convertible securities, and securities carrying warrants to purchase equity
securities. The fund will not invest in common stocks directly, but may retain,
for reasonable periods of time, common stocks acquired upon conversion of debt
securities or upon exercise of warrants acquired with debt securities. The fund
may invest up to 30% of its total assets in securities of non-U.S. issuers.
To achieve its goal of high current income, the fund uses what is sometimes
referred to as a top-down analysis to determine which industries may benefit
from current and future changes in the economy. The fund then selects individual
securities within selected industries that appear from a yield perspective to be
attractive. The fund assesses such factors as the company's business
environment, balance sheet, income statement, anticipated earnings and
management team.
The fund seeks its secondary goal of capital growth, when consistent with its
primary objective of high current income, by investing in securities that the
portfolio manager expects to appreciate in value as a result of declines in
long-term interest rates or favorable developments affecting the business or
prospects of the issuer which may improve the issuer's financial condition and
credit rating.
- --------------------------------------------------------------------------------
MAIN RISKS. The major factors affecting this fund's performance are interest
rates and credit risk. When interest rates rise, bond prices fall; generally the
longer a bond's maturity, the more sensitive it is to this risk.
Credit risk depends largely on the perceived financial health of bond issuers.
In general, lower-rated bonds have higher credit risks. Junk bond prices can
fall on bad news about the economy, an industry or a company. Share price, yield
and total return may fluctuate more than with less aggressive bond funds.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. If certain industries or investments don't perform as the
fund expects, it could underperform its peers or lose money.
Junk bonds and foreign securities may make the fund more sensitive to market or
economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or current yield of the portfolio's securities or to the value of
the fund's shares.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history is provided.
20 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 82
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1998)
- Joined HIMCO in 1993
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.75%
Distribution and service (12b-1) fees None
Other expenses(1) 0.42%
Total operating expenses(1) 1.17%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 0.95%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 120
Year 3 $ 374
Year 5 $ 647
Year 10 $1,427
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 21
<PAGE> 83
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Bond Income Strategy Fund seeks a high
level of current income, consistent with a competitive total return, as compared
to bond funds with similar investment objectives and policies, by investing
primarily in debt securities. Debt securities include (1) securities issued or
guaranteed as to principal or interest by the U.S. Government, its agencies or
instrumentalities; (2) non-convertible debt securities issued or guaranteed by
U.S. corporations or other issuers (including foreign governments or
corporations); (3) asset-backed and mortgage-related securities; and (4)
securities issued or guaranteed as to principal or interest by a sovereign
government or one of its agencies or political subdivisions, supranational
entities such as development banks, non-U.S. corporations, banks or bank holding
companies, or other non-U.S. issuers.
The fund normally invests at least 70% of its portfolio in investment grade
fixed income securities. The fund may invest up to 30% of its total assets in
securities rated in the highest category of below investment grade bonds ("Ba1",
"Ba2" or "Ba3" by Moody's Investors Service, Inc. or "BB+", "BB" or "BB-" by
Standard & Poor's Corporation), or securities which, if unrated, are determined
by HIMCO to be of comparable quality. Securities rated below investment grade
are commonly referred to as "junk bonds".
The fund invests at least 65% of its total assets in debt securities with a
maturity of at least one year. Although the fund does not have a maximum
maturity term restriction, the fund tends to have an average maturity within the
intermediate-term range. The fund may invest up to 15% of its total assets in
preferred stocks, convertible securities, and securities accompanied by warrants
to purchase equity securities. The fund will not invest in common stocks
directly, but may retain, for reasonable periods of time, common stocks acquired
upon conversion of debt securities or upon exercise of warrants acquired with
debt securities. The fund may invest up to 30% of its total assets in debt
securities of non-U.S. companies.
The fund uses what is sometimes referred to as a top-down analysis to determine
which industries may benefit from current and future changes in the economy. The
fund then selects individual securities that appear comparatively undervalued
within selected industries. The portfolio manager assesses such factors as a
company's business environment, balance sheet, income statement, anticipated
earnings and management team.
- --------------------------------------------------------------------------------
MAIN RISKS. The major factors affecting this fund's performance are interest
rates and credit risk. When interest rates rise, bond prices fall; generally the
longer the fund's maturity, the more sensitive it is to this risk.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. In general, lower-rated bonds have higher credit risks. If
certain sectors or investments don't perform as the fund expects, it could
underperform its peers or lose money.
Junk bonds and foreign securities may make the fund more sensitive to market or
economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or current yield of the portfolio's securities or to the value of
the fund's shares.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
THE HARTFORD SMALL COMPANY FUND
-------------------------------
<S> <C>
'97' 11.30
'98' 7.98
</TABLE>
BEST QUARTER:
up 4.13%, second quarter 1997
WORST QUARTER:
down 0.25%, first quarter 1997
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 7.98% 10.39%
Lehman Government
Corporate Bond Index 9.47% 9.99%
</TABLE>
INDEX: Lehman Government Corporate Bond Index, an unmanaged index of
fixed-income securities.
22 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 84
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1996)
- Joined HIMCO in 1993
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.65%
Distribution and service (12b-1) fees None
Other expenses(1) 0.19%
Total operating expenses(1) 0.84%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 0.80%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 86
Year 3 $ 269
Year 5 $ 468
Year 10 $1,040
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 23
<PAGE> 85
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL AND STYLE. The Hartford Money Market Fund seeks maximum current
income consistent with liquidity and preservation of capital. The fund seeks to
maintain a stable share price of $1.00.
The fund focuses on specific short-term money market instruments such as debt
securities issued by corporations and financial institutions which are rated in
the first two investment tiers by at least one nationally recognized statistical
rating organization, or if unrated, determined to be of comparable quality by
HIMCO. Money market instruments include (1) banker's acceptances; (2)
obligations of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.
The fund purchases securities which it believes offer attractive returns
relative to the risks undertaken. In addition, the portfolio manager adjusts the
average maturity of the portfolio in anticipation of interest rate changes.
- --------------------------------------------------------------------------------
MAIN RISKS. An investment in the fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the fund seeks to preserve the value of your investment at $1.00 per share,
there is a risk that the fund's share price could fall below $1.00, which would
reduce the value of your account.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
figures and average annual figures do not include the effect of sales charges as
no sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL
RETURNS BY CALENDAR YEAR
[chart]
<TABLE>
<CAPTION>
THE HARTFORD SMALL COMPANY FUND
-------------------------------
<S> <C>
'97' 5.23
'98' 5.16
</TABLE>
BEST QUARTER: up 1.32%, fourth quarter 1996
WORST QUARTER: up 1.22%, fourth quarter 1998
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 5.16% 5.23%
60-Day Treasury Bill
Index 4.94% 5.13%
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term treasury
bills.
Current 7-day yield as of December 31, 1998: 4.72%
Effective 7-day yield (which indicates the effect of daily compounding) as of
December 31, 1998: 4.83%
Please call 1-888-843-7824 for the most recent current and effective yield
information.
24 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 86
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
William H. Davison, Jr.
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1996)
- Joined HIMCO in 1990
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.50%
Distribution and service (12b-1) fees None
Other expenses(1) 0.21%
Total operating expenses(1) 0.71%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions, certain distribution
fees and extraordinary expenses to 0.55%. This policy
may be discontinued at any time.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The example also assumes that your investment has
a 5% return each year, that the fund's operating expenses
remain the same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 73
Year 3 $228
Year 5 $396
Year 10 $885
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 25
<PAGE> 87
PRIOR PERFORMANCE OF SIMILAR FUNDS
- --------------------------------------------------------------------------------
Because the mutual funds that are the subject of this prospectus (the "Retail
Funds") began operations in July, 1996, or later, they have limited operating
and performance histories. However, the Capital Appreciation Fund, International
Opportunities Fund, Stock Fund, Dividend and Growth Fund and Advisers Fund are
modeled after existing funds (the "HLS Funds") that are managed by the same
portfolio managers at HIMCO or Wellington Management and have investment
objectives, policies and strategies substantially similar to those of the
corresponding funds. Depending on the fund involved, similarity of investment
characteristics may involve factors such as industry diversification, country
diversification, portfolio beta, portfolio quality, average maturity of
fixed-income assets, equity/non-equity mixes, and individual holdings. The HLS
Funds are used as investment vehicles for the assets of variable annuity and
variable life insurance contracts issued by The Hartford affiliates.
Below you will find information about the performance of the HLS Funds. Because
the expenses of the HLS Funds are generally lower than the Retail Funds the
performance of the HLS Funds would have been lower had the Retail Fund expenses
been applied.
The table below sets forth each fund, its corresponding HLS Fund, and their
respective inception date and asset sizes as of December 31, 1998. Any fund's
future performance may be greater or less than the performance of the
corresponding HLS Fund due to, among other things, differences in expenses,
asset sizes and cash flows between a fund and the corresponding HLS Fund.
<TABLE>
<CAPTION>
FUND CORRESPONDING HLS FUND
- ---- ----------------------
<S> <C>
Capital Appreciation (July Hartford Capital Appreciation HLS Fund, Inc. (April 2, 1984)
22, 1996) $698,638,678 $5,813,421,612
International Opportunities Hartford International Opportunities HLS Fund, Inc. (July 2,
(July 22, 1996) $56,020,588 1990) $1,197,356,582
Stock (July 22, 1996) Hartford Stock HLS Fund, Inc. (August 31, 1977)
$497,388,744 $7,193,213,170
Dividend and Growth (July Hartford Dividend and Growth HLS Fund, Inc. (March 8, 1994)
22, 1996) $317,618,659 $3,039,893,797
Advisers (July 22, 1996) Hartford Advisers HLS Fund, Inc. (March 31, 1983)
$667,192,259 $11,840,125,134
</TABLE>
The following table shows the average annualized total returns for the HLS Funds
for the one, three, five and ten year (or life of the HLS Fund, if shorter)
periods ended December 31, 1998. These figures are based on the actual gross
investment performance of the HLS Funds. From the gross investment performance
figures, the maximum Total Fund Operating Expenses for each fund are deducted to
arrive at the net return. Please remember that past performance is not
indicative of future returns.
<TABLE>
<CAPTION>
10 YEARS OR
HLS FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
-------- ------ ------- ------- ---------------
<S> <C> <C> <C> <C>
Hartford Capital Appreciation HLS Fund, Inc. 15.06% 19.04% 17.49% 18.29%
Hartford International Opportunities HLS Fund, Inc. 12.66% 8.18% 7.03% 7.05%
Hartford Stock HLS Fund, Inc. 32.74% 28.97% 22.81% 17.93%
Hartford Dividend and Growth HLS Fund, Inc. 16.07% 23.25% N/A 21.91%
Hartford Advisers HLS Fund, Inc. 24.25% 21.47% 17.33% 14.83%
</TABLE>
26 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 88
ADDITIONAL INVESTMENT MATTERS
- --------------------------------------------------------------------------------
USE OF OPTIONS AND FUTURES
Each fund (other than the Money Market fund) may purchase and sell options and
enter into futures contracts, in each case with respect to stocks, bonds, groups
of securities (such as financial indices) or foreign currencies. These
techniques permit a fund to gain exposure to a particular security or group of
securities, and thereby earn returns similar to those which would be earned by
direct investments in those securities. These techniques are also used to manage
risk by hedging a fund's portfolio investments. Use of these techniques may
result in losses to a fund or increase volatility.
USE OF MONEY MARKET INVESTMENTS
FOR TEMPORARY DEFENSIVE PURPOSES
From time to time each fund (other than the Money Market fund) may invest some
or all of its assets in high quality money market securities for temporary
defensive purposes in response to adverse market, economic or political
conditions. To the extent a fund is in a defensive position, the fund may lose
the benefit of upswings and limit its ability to meet its investment objective.
ABOUT EACH FUND'S INVESTMENT GOAL
Each fund's investment goal may be changed without approval of the shareholders
of the fund. A fund may not be able to achieve its goal.
TAX CONSEQUENCES OF PORTFOLIO
TRADING PRACTICES
At times each fund may engage in short-term trading, which could produce higher
brokerage expenses for a fund and higher taxable distributions to the fund's
shareholders. The funds are not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
YEAR 2000
The services provided to the Funds by HIFSCO, HIMCO, Wellington Management and
other service providers depend on the smooth functioning of their computer
systems. Many computer software systems in use today cannot distinguish the year
2000 from the year 1900 because of the way dates are encoded and calculated.
That failure could have a negative impact on the handling of securities trades,
pricing and account services. HIFSCO, HIMCO, Wellington Management and other
service providers have been actively working on necessary changes to their
computer systems to deal with the year 2000 issue and expect that their systems
will be adapted in time for that event. In addition, to the extent that a
portfolio company suffers from a Year 2000 problem, a fund's performance could
be adversely affected.
THE HARTFORD MUTUAL FUNDS, INC. 27
<PAGE> 89
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
THE INVESTMENT MANAGER
Hartford Investment Financial Services Company ("HIFSCO") is the investment
manager to each fund. HIFSCO is a majority-owned indirect subsidiary of The
Hartford Financial Services Group, Inc. ("The Hartford"), a Connecticut
financial services company with over $130 billion in assets. As of December 31,
1998 HIFSCO had over $2.5 billion in assets under management. HIFSCO is
responsible for the general business management of each fund and supervises the
activities of the investment sub-advisers described below. HIFSCO is principally
located at 200 Hopmeadow Street, Simsbury, Connecticut 06070.
THE INVESTMENT SUB-ADVISERS
Wellington Management Company, LLP ("Wellington Management") is the investment
sub-adviser to the Small Company Fund, Capital Appreciation Fund, MidCap Fund,
International Opportunities Fund, Global Leaders Fund, Stock Fund, Growth and
Income Fund, Dividend and Growth Fund and Advisers Fund. Wellington Management,
a Massachusetts limited liability partnership, is a professional investment
counseling firm that provides services to investment companies, employee benefit
plans, endowments, foundations and other institutions and individuals.
Wellington Management and its predecessor organizations have provided investment
advisory services since 1928. As of December 31, 1998 Wellington Management had
investment management authority over approximately $211 billion in assets.
Wellington Management is principally located at 75 State Street, Boston,
Massachusetts 02109.
The Hartford Investment Management Company ("HIMCO") is the investment
sub-adviser to the High Yield Fund, Bond Income Strategy Fund and Money Market
Fund. HIMCO is a professional money management firm that provides services to
investment companies, employee benefit plans and insurance companies. HIMCO is a
wholly-owned subsidiary of The Hartford. As of December 31, 1998 HIMCO and its
wholly-owned subsidiary had investment management authority over approximately
$61.2 billion in assets. HIMCO is principally located at 55 Farmington Avenue,
Hartford, Connecticut 06105.
MANAGEMENT FEES
For the year ended December 31, 1998, the investment advisory fees paid to
HIFSCO for each fund with at least one full year of operations, expressed as a
percentage of net assets, were as follows:
<TABLE>
<CAPTION>
FUND NAME ANNUAL RATE
- --------- -----------
<S> <C>
The Hartford Small Company Fund 0.85%
The Hartford Capital Appreciation
Fund 0.80%
The Hartford MidCap Fund 0.85%
The Hartford International
Opportunities Fund 0.85%
The Hartford Stock Fund 0.80%
The Hartford Dividend and Growth
Fund 0.75%
The Hartford Advisers Fund 0.75%
The Hartford Bond Income Strategy
Fund 0.65%
The Hartford Money Market Fund 0.50%
</TABLE>
The fee schedule below indicates annualized management fees based on average
daily net assets for the three funds that have been in operation for less than
one year.
HARTFORD GLOBAL LEADERS FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.85%
Next $500,000,000 0.75%
Amount Over $1 billion 0.70%
</TABLE>
HARTFORD GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.80%
Next $500,000,000 0.70%
Amount Over $1 billion 0.65%
</TABLE>
HARTFORD HIGH YIELD FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.75%
Next $500,000,000 0.65%
Amount Over $1 billion 0.60%
</TABLE>
28 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 90
ABOUT YOUR ACCOUNT
- --------------------------------------------------------------------------------
CLASS Y SHARE INVESTOR REQUIREMENTS
In order to buy Class Y shares you must qualify as one of the following types of
institutional investors: (i) tax qualified plans which have (A) at least $10
million in plan assets, or (B) have 750 or more employees eligible to
participate at the time of the purchase, (ii) banks and insurance companies
purchasing shares for their own account, (iii) investment companies, and (iv)
tax-qualified retirement plans of The Hartford, Wellington Management or
broker-dealer wholesalers and their affiliates.
OPENING AN ACCOUNT
Please note that if you are purchasing shares through your employer's tax
qualified retirement plan, you may need to call the administrator of the plan
for details on purchases, redemptions and other account activity.
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investment for each
fund is $1 million although this minimum may be waived at the discretion of
the funds' officers.
3 Complete the appropriate parts of the account application, including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional application if you want to
add privileges later. If you have questions, please contact your financial
representative or call the transfer agent at the number shown below.
4 Make your initial investment selection.
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 8416
BOSTON, MA 02266-8416 OR CONTACT YOUR FINANCIAL REPRESENTATIVE FOR INSTRUCTIONS
AND ASSISTANCE.
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 29
<PAGE> 91
BUYING SHARES
<TABLE>
<C> <S> <C>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
BY CHECK
CHECK ICON - Make out a check for the investment amount, - Make out a check for the investment amount,
payable to "The Hartford Mutual Funds, Inc." payable to "The Hartford Mutual Funds, Inc."
- Deliver the check and your completed - Fill out the detachable investment slip from
application to your financial representative, or an account statement. If no slip is available,
mail to the address listed below. include a note specifying the fund name, your
share class, your account number and the
name(s) in which the account is registered.
- Deliver the check and your investment slip or
note to your financial representative, or mail
it to the address below.
BY EXCHANGE
ARROW ICON - Call your financial representative, plan - Call your financial representative, plan
administrator or the transfer agent at the administrator or the transfer agent at the
number below to request an exchange. The number below to request an exchange. The
minimum exchange amount is $500 per fund. minimum exchange amount is $500 per fund.
BY WIRE
WIRE ICON - Deliver your completed application to your - Instruct your bank to wire the amount of your
financial representative, or mail to the investment to:
address below. State Street Bank and Trust Company
Account # 9905-205-2
- Obtain your account number by calling your Routing # 011000028
financial representative or the phone number Specify the fund name, your share class, your
below. account number and the name(s) in which the
account is registered. Your bank may charge a
- Instruct your bank to wire the amount of your fee to wire funds.
investment to:
State Street Bank and Trust Company
Account # 9905-205-2
Routing # 011000028
Specify the fund name, your choice of share
class, the new account number and the name(s)
in which the account is registered. Your bank
may charge a fee to wire funds.
BY PHONE
PHONE ICON - See "By Wire" and "By Exchange" - Verify that your bank or credit union is a
member of the Automated Clearing House (ACH)
system.
- Complete the "Telephone Exchanges and
Telephone Redemption" and "Bank Account or
Credit Union Information" sections on your
account application.
- Call the transfer agent at the number below to
verify that these features are in place on
your account.
- Tell the transfer agent representative the
fund name, your share class, your account
number, the name(s) in which the account is
registered and the amount of your investment.
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 8416
BOSTON, MA 02266-8416 OR CONTACT YOUR FINANCIAL REPRESENTATIVE
FOR INSTRUCTIONS AND ASSISTANCE.
</TABLE>
30 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 92
SELLING SHARES
<TABLE>
<C> <S>
BY LETTER
- Write a letter of instruction or complete a power of
LETTER ICON attorney indicating the fund name, your share class, your
account number, the name(s) in which the account is
registered and the dollar value or number of shares you
wish to sell.
- Include all signatures and any additional documents that
may be required (see next page).
- Mail the materials to the address below.
- A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
letter of instruction.
BY PHONE
PHONE ICON - For automated service 24 hours a day using your touch-tone
phone, call the number shown below.
- To place your order with a representative, call the
transfer agent at the number below between 8 A.M. and 6 P.M.
Eastern Time on most business days.
BY WIRE OR ELECTRONIC FUNDS TRANSFER (EFT)
- Fill out the "Telephone Exchanges and Telephone
WIRE ICON Redemption" and "Bank Account or Credit Union Information"
sections of your new account application.
- Call the transfer agent at the number below to verify that
the telephone redemption privilege is in place on an
account, or to request the forms to add it to an existing
account.
- Amounts of $1,000 or more will be wired on the next
business day. Your bank may charge a fee for this service.
- Amounts of less than $1,000 may be sent by EFT or by
check. Funds from EFT transactions are generally available
by the second business day. Your bank may charge a fee for
this service.
- Phone requests are limited to amounts up to $50,000 in a
7-day period.
BY EXCHANGE
- Obtain a current prospectus for the fund into which you
ARROW ICON are exchanging by calling your financial representative or
the transfer agent at the number below.
- Call your financial representative or the transfer agent
to request an exchange.
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 8416
BOSTON, MA 02266-8416 OR CONTACT YOUR FINANCIAL REPRESENTATIVE FOR INSTRUCTIONS
AND ASSISTANCE.
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 31
<PAGE> 93
SELLING SHARES IN WRITING
<TABLE>
<C> <S>
In certain circumstances, you will need to make your request to sell shares
in writing. You may need to include additional items with your request, as
shown in the table below. You may also need to include a signature
guarantee, which protects you against fraudulent orders. You will need a
signature guarantee if:
- your address of record has changed within the past 30 days
LETTER ICON
- you are selling more than $50,000 worth of shares
- you are requesting payment other than by a check mailed to
the address of record and payable to the registered owner(s)
Please note that a notary public CANNOT provide a signature guarantee.
Please check with a representative of your bank or other financial
institution about obtaining a signature guarantee.
</TABLE>
32 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 94
TRANSACTION POLICIES
- --------------------------------------------------------------------------------
VALUATION OF SHARES
The net asset value per share (NAV) for each fund and class is determined each
business day at the close of regular trading on the New York Stock Exchange
("NYSE") (typically 4 P.M. Eastern Time). Except for the Money Market Fund, the
funds use market prices in valuing portfolio securities, but may use fair-value
estimates, as determined in good faith by the Board of Directors, if reliable
market prices are unavailable. The Money Market Fund's assets are valued at
amortized cost.
Trading on many foreign securities markets is completed at various times before
or after the close of the NYSE or on days the NYSE is not open for business.
Consequently, the calculation of a fund's NAV may take place at a time that is
different than when prices are determined for certain foreign securities. As a
result, events affecting the values of foreign portfolio securities that occur
after the close of the NYSE will not be reflected in a fund's calculation of
NAV.
BUY AND SELL PRICES
When you buy shares, you pay the NAV. When you sell shares, you receive the NAV.
EXECUTION OF REQUESTS
Each fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV to be calculated after your request is received by the transfer agent or
authorized broker-dealers and third-party administrators.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.
In unusual circumstances, any fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to three business days
or longer, as allowed by federal securities laws.
TELEPHONE TRANSACTIONS
For your protection, telephone requests may be recorded in order to verify their
accuracy. Also for your protection, telephone transactions are not permitted on
accounts whose names or addresses have changed within the past 30 days. Proceeds
from telephone transactions can only be mailed to the address of record.
EXCHANGES
You may exchange shares of one fund for shares of the same class of any other.
The registration for both accounts involved must be identical.
Each fund reserves the right to refuse or delay exchanges by any person or group
if, in HIMCO's or Wellington Management's judgment, a fund would be unable to
invest the money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected. Your exchanges
may be restricted or refused if a fund receives or anticipates simultaneous
orders affecting significant portions of the fund's assets. In particular, a
pattern of exchanges that coincides with a "market timing" strategy may be
disruptive to the fund. Although a fund will attempt to give you prior notice
whenever it is reasonably able to do so, it may impose these restrictions at any
time. Each fund reserves the right to terminate or modify the exchange privilege
in the future.
CERTIFICATED SHARES
Shares are electronically recorded and therefore share certificates are not
issued.
SALES IN ADVANCE OF
PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 15 business days after the purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, each fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities as prescribed by the Directors. When the shareholder sells portfolio
securities received in this fashion, he would incur a brokerage charge. Any such
securities would be valued for the purposes of making such payment at the same
value as used in determining net asset value. The funds have elected to be
governed by Rule 18f-1 under the 1940 Act, pursuant to which each fund is
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the applicable fund during any 90 day period for any one
account.
THE HARTFORD MUTUAL FUNDS, INC. 33
<PAGE> 95
PAYMENT REQUIREMENTS
All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks and made payable to The Hartford Mutual Funds, or in the case of a
retirement account, to the custodian or trustee. You may not purchase shares
with a third party check.
DIVIDENDS AND ACCOUNT POLICIES
ACCOUNT STATEMENTS In general, you will receive account statements as follows:
- - after every transaction (except a dividend reinvestment) that affects your
account balances
- - after any changes of name or address of the registered owner(s)
- - in all other circumstances, every quarter
Every year you should also receive, if applicable, a Form 1099 tax information
statement.
If you are a participant in an employer-sponsored retirement plan you will
receive statements from your plan administrator.
DIVIDENDS Each fund intends to distribute substantially all of its net income
and capital gains to shareholders at least once a year. Normally, dividends from
net investment income of the Small Company Fund, Capital Appreciation Fund,
MidCap Fund, International Opportunities Fund, Global Leaders Fund and Stock
Fund will be declared and paid annually; dividends from the net investment
income of the Growth and Income Fund, Dividend and Growth Fund and Advisers Fund
will be declared and paid quarterly; dividends from the net investment income of
the Bond Income Strategy Fund and High Yield Fund will be declared and paid
monthly and dividends from net investment income of the Money Market Fund will
be declared daily and paid monthly. Dividends from the Money Market Fund are not
paid on shares until the day following the date on which the shares are issued.
Unless shareholders specify otherwise, all dividends and distributions will be
automatically reinvested in additional full or fractional shares of each fund.
TAXABILITY OF DIVIDENDS Dividends you receive from a fund, whether reinvested
or taken as cash, are generally considered taxable. Dividends from a fund's
long-term capital gains are taxable as capital gains; dividends from short-term
capital gains and income are generally taxable as ordinary income. Some
dividends paid in January may be taxable as if they had been paid the previous
December. Tax rates may vary depending on how long a fund investment is held.
See your application for distribution options.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
TAXABILITY OF TRANSACTIONS Any time you sell or exchange shares, it is
considered a taxable event for you unless the sale or exchange is within a
qualified retirement plan. Depending on the purchase price and the sale price of
the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
ADDITIONAL INVESTOR SERVICES
ELECTRONIC TRANSFERS THROUGH AUTOMATED CLEARING HOUSE ("ACH") allow you to
initiate a purchase or redemption for as little as $100 or as much as $50,000
between your bank account and fund account using the ACH network.
If you are a participant in a tax qualified retirement plan, check with your
plan administrator for additional investor services.
34 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 96
ADDITIONAL SHARE CLASSES
- --------------------------------------------------------------------------------
In addition to Class Y shares, each fund also offers Class A, Class B and Class
C shares. Class A, Class B and Class C shares are available to individual
investors. Class A, Class B and Class C shares generally have operating expenses
similar to Class Y shares, except for certain sales charges and distribution and
transfer agent fees. Such expenses may affect performance. Please call
1-888-843-7824 for additional information on the purchase of Class A, Class B or
Class C shares.
THE HARTFORD MUTUAL FUNDS, INC. 35
<PAGE> 97
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD SMALL COMPANY FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/98 12/31/97 12/31/96(1)
--------- -------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.24 $10.71 $10.00
Income from investment operations:
Net investment income (loss) (0.03) (0.01) 0.00
Net realized and unrealized gain (loss) on investments 1.38 2.09 1.43
------- ------- -------
Total from investment operations 1.35 2.08 1.43
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.12) (0.55) (0.72)
Return of capital 0.000 0.000 0.000
------- ------- -------
Total distributions (0.12) (0.55) (0.72)
------- ------- -------
Net asset value, end of period $13.47 $12.24 $10.71
======= ======= =======
TOTAL RETURN 11.05% 19.69% 14.41%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $13,004 $9,062 $72
Ratio of expenses to average net assets before waivers and
reimbursements 1.02% 1.30% 115.33%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 1.00% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net assets (0.33%) (0.14%) 0.03%(3)
Portfolio turnover rate(4) 266.82% 255.37% 69.92%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
36 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 98
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD CAPITAL APPRECIATION FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/98 12/31/97 12/31/96(1)
--------- --------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $20.05 $13.38 $10.00
Income from investment operations:
Net investment income (loss) (0.06) (0.03) 0.00
Net realized and unrealized gain (loss) on investments 0.80 7.47 3.79
-------- -------- -------
Total from investment operations 0.74 7.44 3.79
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.13) (0.77) (0.41)
Return of capital 0.000 0.000 0.000
-------- -------- -------
Total distributions (0.13) (0.77) (0.41)
-------- -------- -------
Net asset value, end of period $20.66 $20.05 $13.38
======== ======== =======
TOTAL RETURN 3.68% 56.00% 37.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $27,700 $26,693 $107
Ratio of expenses to average net assets before waivers and
reimbursements 0.96% 1.13% 93.64%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.96% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net assets (0.27%) (0.35%) 0.04%(3)
Portfolio turnover rate(4) 123.42% 119.62% 149.99%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 37
<PAGE> 99
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MIDCAP FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
12/31/98(1)
-------------
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income (loss) (0.02)
Net realized and unrealized gain (loss) on investments 2.37
-------
Total from investment operations 2.35
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital 0.000
-------
Total distributions 0.00
-------
Net asset value, end of period $12.35
=======
TOTAL RETURN 23.62%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,750
Ratio of expenses to average net assets before waivers and
reimbursements 1.12%
Ratio of expenses to average net assets after waivers and
reimbursements 1.00%
Ratio of net investment income (loss) to average net assets (0.33%)
Portfolio turnover rate(2) 139.02%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
December 31, 1997.
(2) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
38 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 100
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED: 7/1/96-
12/31/98 12/31/97 12/31/96(1)
-------- ------------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.62 $10.73 $10.00
Income from investment operations:
Net investment income (loss) 0.12 0.15 0.00
Net realized and unrealized gain (loss) on investments 1.27 (0.02) 0.84
------- ------- -------
Total from investment operations 1.39 0.13 0.84
Less distributions:
Dividends from net investment income (0.04) (0.07) (0.08)
Distributions from capital gains 0.00 (0.17) (0.03)
Return of capital 0.000 0.000 0.000
------- ------- -------
Total distributions (0.04) (0.24) (0.11)
------- ------- -------
Net asset value, end of period $11.97 $10.62 $10.73
======= ======= =======
TOTAL RETURN 13.11% 1.31% 8.36%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $10,860 $6,422 $64
Ratio of expenses to average net assets before waivers and
reimbursements 1.36% 1.76% 126.52%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 1.20% 1.20% 1.20%(3)
Ratio of net investment income (loss) to average net assets 1.17% 1.33% 0.57%(3)
Portfolio turnover rate(4) 148.58% 59.16% 21.51%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 39
<PAGE> 101
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GLOBAL LEADERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
9/30/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.01
Net realized and unrealized gain (loss) on investments 3.03
------
Total from investment operations 3.04
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.35)
Return of capital 0.000
------
Total distributions (0.35)
------
Net asset value, end of period $12.69
======
TOTAL RETURN(2) 30.57%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $392
Ratio of expenses to average net assets before waivers and
reimbursements 2.46%(5)
Ratio of expenses to average net assets after waivers and
reimbursements 1.20%(5)
Ratio of net investment income (loss) to average net assets 0.31%(5)
Portfolio turnover rate(3) 49.04%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
40 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 102
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD STOCK FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.25 $11.55 $10.00
Income from investment operations:
Net investment income (loss) 0.06 0.03 0.01
Net realized and unrealized gain (loss) on investments 4.78 3.70 1.57
------ ------ --------
Total from investment operations 4.84 3.73 1.58
Less distributions:
Dividends from net investment income 0.00 0.00 (0.03)
Distributions from capital gains (0.19) (0.03) 0.00
Return of capital (0.01) 0.000 0.000
------ ------ --------
Total distributions (0.20) (0.03) (0.03)
------ ------ --------
Net asset value, end of period $19.89 $15.25 $11.55
====== ====== ========
TOTAL RETURN 31.80% 32.33% 15.80%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $7,919 $5,510 $44
Ratio of expenses to average net assets before waivers and
reimbursements 0.96% 1.11% 133.50%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.96% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net assets 0.36% 0.53% 1.37%(3)
Portfolio turnover rate(4) 37.03% 42.83% 11.87%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 41
<PAGE> 103
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GROWTH AND INCOME FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
4/30/98-
12/31/98(1)
-------------
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.05
Net realized and unrealized gain (loss) on investments 1.46
------
Total from investment operations 1.51
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital (0.03)
------
Total distributions (0.03)
------
Net asset value, end of period $11.48
======
TOTAL RETURN(2) 15.18%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $386
Ratio of expenses to average net assets before waivers and
reimbursements 1.20%(5)
Ratio of expenses to average net assets after waivers and
reimbursements 1.00%(5)
Ratio of net investment income (loss) to average net assets 0.76%(5)
Portfolio turnover rate(3) 35.10%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
April 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
42 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 104
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD DIVIDEND AND GROWTH FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $14.77 $11.46 $10.00
Income from investment operations:
Net investment income (loss) 0.24 0.21 0.02
Net realized and unrealized gain (loss) on investments 1.94 3.39 1.53
------- ------- -------
Total from investment operations 2.18 3.60 1.55
Less distributions:
Dividends from net investment income (0.19) (0.15) (0.07)
Distributions from capital gains (0.07) (0.14) (0.02)
Return of capital 0.000 (0.000) 0.000
------- ------- -------
Total distributions (0.26) (0.29) (0.09)
------- ------- -------
Net asset value, end of period $16.69 $14.77 $11.46
======= ======= =======
TOTAL RETURN 14.86% 31.59% 15.49%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $17,098 $13,236 $13,241
Ratio of expenses to average net assets before waivers and
reimbursements 0.91% 1.09% 141.53%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.91% 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net assets 1.53% 1.83% 2.41%(3)
Portfolio turnover rate(4) 46.43% 28.75% 29.80%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 43
<PAGE> 105
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD ADVISERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.46 $11.10 $10.00
Income from investment operations:
Net investment income (loss) 0.29 0.31 0.03
Net realized and unrealized gain (loss) on investments 2.59 2.32 1.16
------- ------- -------
Total from investment operations 2.88 2.63 1.19
Less distributions:
Dividends from net investment income (0.28) (0.20) (0.09)
Distributions from capital gains (0.26) (0.07) 0.00
Return of capital 0.000 0.000 0.000
------- ------- -------
Total distributions (0.54) (0.27) (0.09)
------- ------- -------
Net asset value, end of period $15.80 $13.46 $11.10
======= ======= =======
TOTAL RETURN 21.62% 23.80% 11.88%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $57,891 $39,773 $34
Ratio of expenses to average net assets before waivers and
reimbursements 0.90% 1.03% 144.82%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.90% 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net assets 2.09% 2.08% 2.75%(3)
Portfolio turnover rate(4) 40.24% 38.62% 19.75%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
44 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 106
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD HIGH YIELD FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
9/30/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.21
Net realized and unrealized gain (loss) on investments 0.13
-------
Total from investment operations 0.34
Less distributions:
Dividends from net investment income (0.18)
Distributions from capital gains 0.00
Return of capital 0.000
-------
Total distributions (0.18)
-------
Net asset value, end of period $10.16
=======
TOTAL RETURN(2) 3.51%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,034
Ratio of expenses to average net assets before waivers and
reimbursements 1.17%(5)
Ratio of expenses to average net assets after waivers and
reimbursements 0.95%(5)
Ratio of net investment income (loss) to average net assets 7.48%(5)
Portfolio turnover rate(3) 10.85%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
THE HARTFORD MUTUAL FUNDS, INC. 45
<PAGE> 107
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD BOND INCOME STRATEGY FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/98 12/31/97 12/31/96(1)
-------- -------- ------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.64 $10.27 $10.00
Income from investment operations:
Net investment income (loss) 0.58 0.58 0.28
Net realized and unrealized gain (loss) on investments 0.24 0.54 0.31
-------- -------- --------
Total from investment operations 0.82 1.12 0.59
Less distributions:
Dividends from net investment income (0.57) (0.59) (0.26)
Distributions from capital gains (0.08) (0.16) (0.06)
Return of capital 0.000 0.000 0.000
-------- -------- --------
Total distributions (0.65) (0.75) (0.32)
-------- -------- --------
Net asset value, end of period $10.81 $10.64 $10.27
======== ======== ========
TOTAL RETURN 7.98% 11.30% 5.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $10,766 $5,756 $5
Ratio of expenses to average net assets before waivers and
reimbursements 0.84% 1.01% 185.34%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.80% 0.80% 0.80%(3)
Ratio of net investment income (loss) to average net assets 5.48% 5.98% 6.17%(3)
Portfolio turnover rate(4) 135.01% 220.45% 75.52%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
46 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 108
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MONEY MARKET FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
that an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/98 12/31/97 12/31/96(1)
-------- -------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) 0.50 0.05 0.02
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00
------- ------- --------
Total from investment operations 0.50 0.05 0.02
Less distributions:
Dividends from net investment income (0.50) (0.05) (0.02)
Distributions from capital gains 0.00 (0.00) 0.00
Return of capital 0.000 0.000 0.000
------- ------- --------
Total distributions (0.50) (0.05) (0.02)
------- ------- --------
Net asset value, end of period $1.00 $1.00 $1.00
======= ======= ========
TOTAL RETURN 5.16% 5.23% 2.34%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $5,320 $2,638 $0.3
Ratio of expenses to average net assets before waivers and
reimbursements 0.71% 0.82% 3496.38%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.55% 0.55% 0.55%(3)
Ratio of net investment income (loss) to average net assets 4.99% 5.13% 4.56%(3)
Portfolio turnover rate N/A N/A N/A
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
THE HARTFORD MUTUAL FUNDS, INC. 47
<PAGE> 109
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 110
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 111
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT
TO SHAREHOLDERS
Additional information on each fund is contained in the financial statements and
portfolio holdings in the fund's annual and semi-annual report. In the fund's
annual report you will also find a discussion of the market conditions and
investment strategies that significantly affected performance during the last
fiscal year, and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION
(SAI)
The SAI contains more detailed information on all aspects of the funds.
A current SAI and annual report have been filed with the Securities and Exchange
Commission and are incorporated by reference into (are legally a part of) this
prospectus.
To request a free copy of the current annual/ semiannual report and/or the SAI
or for shareholder inquiries, please contact the funds at:
BY MAIL:
The Hartford Mutual Funds, Inc., P.O. Box 8416,
Boston, MA 02266-8416
BY PHONE:
1-888-843-7824
ON THE INTERNET:
www.invest.hartfordlife.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-800-SEC-0330.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET:
www.sec.gov
SEC FILE NUMBER: 811-07589
48 THE HARTFORD MUTUAL FUNDS, INC.
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PART B
THE HARTFORD MUTUAL FUNDS, INC. (the "Company")
THE HARTFORD SMALL COMPANY FUND
THE HARTFORD CAPITAL APPRECIATION FUND
THE HARTFORD MIDCAP FUND
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
THE HARTFORD GLOBAL LEADERS FUND
THE HARTFORD STOCK FUND
THE HARTFORD GROWTH AND INCOME FUND
THE HARTFORD DIVIDEND AND GROWTH FUND
THE HARTFORD ADVISERS FUND
THE HARTFORD HIGH YIELD FUND
THE HARTFORD BOND INCOME STRATEGY FUND
THE HARTFORD MONEY MARKET FUND
CLASS A, CLASS B, CLASS C AND CLASS Y SHARES
P.O. Box 8416
Boston, MA 02266-8416
1-888-843-7824
This Statement of Additional Information ("SAI") is not a prospectus
but should be read in conjunction with the Company's Class A, Class B and Class
C prospectus and Class Y prospectus. To obtain a free copy of either prospectus
send a written request to: The Hartford Mutual Funds, Inc., P.O. Box 8416,
Boston, MA 02266-8416 or call the number listed above.
Date of Prospectus: May 1, 1999
Date of Statement of Additional Information: May 1, 1999
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<TABLE>
<CAPTION>
<S> <C>
TABLE OF CONTENTS PAGE
GENERAL INFORMATION............................................................3
INVESTMENT OBJECTIVES AND POLICIES.............................................3
MANAGEMENT OF THE COMPANY.....................................................18
INVESTMENT ADVISORY ARRANGEMENTS..............................................28
FUND EXPENSES.................................................................31
DISTRIBUTION ARRANGEMENTS.....................................................32
DISTRIBUTION FINANCING PLANS..................................................34
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................37
DETERMINATION OF NET ASSET VALUE..............................................39
PURCHASE AND REDEMPTION OF SHARES.............................................40
INVESTMENT PERFORMANCE........................................................44
TAXES.........................................................................54
PRINCIPAL UNDERWRITER.........................................................59
CUSTODIAN.....................................................................59
TRANSFER AGENT SERVICES.......................................................59
INDEPENDENT PUBLIC ACCOUNTANTS................................................59
OTHER INFORMATION.............................................................59
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS.................................59
APPENDIX......................................................................60
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GENERAL INFORMATION
The Hartford Mutual Funds, Inc. (the "Company") is an open-end
management investment company consisting of twelve separate diversified
portfolios (each a "Fund" or together the "Funds"). The Company was organized as
a Maryland Corporation on March 21, 1996. This SAI relates to all twelve Funds.
Hartford Investment Financial Services Company ("HIFSCO") is the investment
manager to each Fund. HIFSCO is an indirect majority owned subsidiary of The
Hartford Financial Services Group, Inc. ("The Hartford"), an insurance holding
company with over $130 billion in assets. In addition, Wellington Management
Company ("Wellington Management") and The Hartford Investment Management Company
("HIMCO(R)") provide the day-to-day investment management of the Funds.
INVESTMENT OBJECTIVES AND POLICIES
A. FUNDAMENTAL RESTRICTIONS OF THE FUNDS
Each Fund has adopted the following fundamental investment restrictions
which may not be changed without approval of a majority of the applicable Fund's
outstanding voting securities. Under the Investment Company Act of 1940 (the
"1940 Act"), and as used in the Prospectus and this SAI, a "majority of the
outstanding voting securities" means the approval of the lesser of (1) the
holders of 67% or more of the shares of a Fund represented at a meeting if the
holders of more than 50% of the outstanding shares of the Fund are present in
person or by proxy or (2) the holders of more than 50% of the outstanding shares
of the Fund.
The investment objective and investment strategies of each Fund are set
forth in the Prospectus. Set forth below are the fundamental investment policies
applicable to each Fund followed by the non-fundamental policies applicable to
each Fund.
Each Fund may not:
1. Issue senior securities. For purposes of this restriction, the
issuance of shares of common stock in multiple classes or series, obtaining of
short-term credits as may be necessary for the clearance of purchases and sales
of portfolio securities, short sales against the box, and the following
practices when a segregated account has been established to cover such
transactions or when an offsetting position has been established by the Fund are
not deemed to be issuances of senior securities: the purchase or sale of
permissible options and futures transactions (and the use of initial and
maintenance margin arrangements with respect to futures contracts or related
options transactions), the purchase or sale of securities on a when issued or
delayed delivery basis, permissible borrowings entered into in accordance with
the Fund's investment policies, and reverse repurchase agreements and mortgage
dollar rolls.
2. Borrow money, except from banks and then only if immediately after
each such borrowing there is asset coverage of at least 300% as defined in the
1940 Act. Although reverse
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repurchase agreements, mortgage dollar rolls, short sales against the box,
futures contracts, options on futures contracts, securities or indices, when
issued and delayed delivery transactions and securities lending are not subject
to this restriction, in most cases a segregated account will be set up to cover
such transactions.
3. Act as an underwriter, except to the extent that in connection with
the disposition of portfolio securities, a Fund may be deemed to be an
underwriter for purposes of the Securities Act of 1933 (the "1933 Act").
4. Purchase or sell real estate, except that a Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (e.g. real estate investment trusts)
(iii) invest in securities that are secured by real estate or interests therein,
(iv) purchase and sell mortgage-related securities, (v) hold and sell real
estate acquired by the Fund as a result of the ownership of securities and (vi)
invest in real estate limited partnerships.
5. Invest in commodities, except that a Fund may (i) invest in
securities of issuers that invest in commodities, and (ii) engage in permissible
options and futures transactions and forward foreign currency contracts, entered
into in accordance with the Fund's investment policies.
6. Make loans, except that a Fund (i) may lend portfolio securities in
accordance with the Fund's investment policies in amounts up to 33-1/3% of the
Fund's total assets taken at market value, (ii) enter into fully collateralized
repurchase agreements, and (iii) purchase debt obligations in which the Fund may
invest consistent with its investment policies.
7. Purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such purchase, the value of
its investments in such industry would exceed 25% of its total assets taken at
market value at the time of such investment. This limitation does not apply to
investments in obligations issued or guaranteed by the U.S. Government or any of
its agencies, instrumentalities or authorities.
In addition, each Fund will operate as a "diversified" fund within the
meaning of the 1940 Act. This means that with respect to 75% of a Fund's total
assets, a Fund will not purchase securities of an issuer (other than cash, cash
items or securities issued or guaranteed by the U.S. Government, its agencies,
instrumentalities or authorities), if
(a) such purchase would cause more than 5% of the Fund's total
assets taken at market value to be invested in the securities
of such issuer; or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the
Fund.
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If a percentage restriction on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later change
in percentage resulting from changes in the values of a Fund's assets will not
be considered a violation of the restriction; provided, however, that the asset
coverage requirement applicable to borrowings under Section 18(f)(1) of the 1940
Act shall be maintained in the manner contemplated by that Section.
In order to permit the sale of shares of the Funds in certain states,
the Board of Directors may, in its sole discretion, adopt restrictions on
investment policy more restrictive than those described above. Should the Board
of Directors determine that any such more restrictive policy is no longer in the
best interest of a Fund and its shareholders, the Fund may cease offering shares
in the state involved and the Board of Directors may revoke such restrictive
policy. Moreover, if the states involved shall no longer require any such
restrictive policy, the Board of Directors may, in its sole discretion, revoke
such policy.
B. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUNDS.
The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without the approval of shareholders.
Each Fund may not:
1. Pledge, mortgage or hypothecate its assets, except to the extent
required to secure permitted borrowings. This investment restriction shall not
apply to any required segregated account or securities lending arrangements. The
deposit of underlying securities and other assets in escrow and collateral
arrangements with respect to margin for futures contracts and related options is
not deemed to be a pledge or other encumbrance.
2. Purchase any securities on margin (except that a Fund may obtain
such short-term credits as may be necessary for the clearance of purchases and
sales of portfolio securities) or make short sales of securities (except short
sales against the box) or maintain a short position. The deposit or payment by a
Fund of initial or maintenance margin in connection with futures contracts or
related options transactions is not considered the purchase of a security on
margin.
3. Purchase securities which are illiquid if, as a result of any such
purchase, more than 15% of its net assets (10% for the Money Market Fund) would
consist of such securities.
4. Purchase securities while outstanding borrowings exceed 5% of a
Fund's total assets.
5. Purchase interests in oil, gas, or other mineral exploration
programs or mineral leases; however, this policy will not prohibit the
acquisition of securities of companies engaged in the production or transmission
of oil, gas, or other minerals.
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6. Invest for the purpose of exercising control over or management of
any company.
If a percentage restriction on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later change
in percentage resulting from changes in the values of a Fund's assets will not
be considered a violation of the restriction.
MISCELLANEOUS INVESTMENT STRATEGIES AND RISKS
A further description of certain investment strategies of each Fund is
set forth below. The percentage limits described in the sections below are based
on market value and are determined as of the time securities are purchased.
MONEY MARKET INSTRUMENTS AND TEMPORARY INVESTMENT STRATEGIES
In addition to the Money Market Fund which may hold cash and invest in
money market instruments at any time, all other Funds may hold cash and invest
in high quality money market instruments under appropriate circumstances as
determined by HIMCO or Wellington Management. Such Funds may invest up to 100%
of their assets in cash or money market instruments only for temporary defensive
purposes.
Money market instruments include: (1) banker's acceptances; (2)
obligations of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.
REPURCHASE AGREEMENTS
A repurchase agreement is an agreement by which the seller of a
security agrees to repurchase the security sold at a mutually agreed upon time
and price. It may also be viewed as the loan of money by a Fund to the seller.
The resale price would be in excess of the purchase price, reflecting an agreed
upon market interest rate.
Each Fund is permitted to enter into fully collateralized repurchase
agreements. The Company's Board of Directors has established standards for
evaluation of the creditworthiness of the banks and securities dealers with
which the Funds will engage in repurchase agreements and monitors on a quarterly
basis HIMCO and Wellington Management's compliance with such standards.
Presently, each Fund may enter into repurchase agreements only with commercial
banks with at least $1 billion in primary capital or with recognized government
securities dealers with a minimum net capital of $100 million.
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HIMCO or Wellington Management will monitor such transactions to ensure
that the value of underlying collateral will be at least equal at all times to
the total amount of the repurchase obligation, including the accrued interest.
If the seller defaults, the Fund could realize a loss on the sale of the
underlying security to the extent that the proceeds of sale including accrued
interest are less than the resale price provided in the agreement including
interest.
REVERSE REPURCHASE AGREEMENTS
Each Fund may also enter into reverse repurchase agreements. Reverse
repurchase agreements involve sales by a Fund of portfolio assets concurrently
with an agreement by a Fund to repurchase the same assets at a later date at a
fixed price. Reverse repurchase agreements carry the risk that the market value
of the securities which a Fund is obligated to repurchase may decline below the
repurchase price. A reverse repurchase agreement is viewed as a collateralized
borrowing by a Fund. Borrowing magnifies the potential for gain or loss on the
portfolio securities of a Fund and, therefore, increases the possibility of
fluctuation in a Fund's net asset value. A Fund will establish a segregated
account with the Company's custodian bank in which a Fund will maintain cash,
cash equivalents, U.S. government securities or other high quality debt
securities equal in value to a Fund's obligations in respect of reverse
repurchase agreements. A Fund will not enter into reverse repurchase
transactions if the combination of all borrowings from banks and the value of
all reverse repurchase agreements for the particular Fund equals more than
33-1/3% of the value the Fund's total assets.
DEBT SECURITIES
Each Fund is permitted to invest in debt securities including: (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) non-convertible debt
securities issued or guaranteed by U.S. corporations or other issuers (including
foreign governments or corporations); (3) asset-backed securities (Advisers
Fund, High Yield Fund, Bond Income Strategy Fund and Money Market Fund only) and
mortgage-related securities, including collateralized mortgage obligations
("CMO's") (Advisers Fund, High Yield Fund and Bond Income Strategy Fund only);
and (4) securities issued or guaranteed as to principal or interest by a
sovereign government or one of its agencies or political subdivisions,
supranational entities such as development banks, non-U.S.
corporations, banks or bank holding companies, or other non-U.S. issuers.
INVESTMENT GRADE DEBT SECURITIES
Each Fund is permitted to invest in debt securities rated within the
four highest rating categories (i.e., Aaa, Aa, A or Baa by Moody's or AAA, AA, A
or BBB by S&P) (or, if unrated, securities of comparable quality as determined
by HIMCO or Wellington Management). These securities are generally referred to
as "investment grade securities." Each rating category has within it different
gradations or sub-categories. If a Fund is authorized to invest in a certain
rating category, the Fund is also permitted to invest in any of the
sub-categories or gradations within
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that rating category. If a security is downgraded to a rating category which
does not qualify for investment, HIMCO or Wellington Management will use its
discretion on whether to hold or sell based upon its opinion on the best method
to maximize value for shareholders over the long term. Debt securities carrying
the fourth highest rating (i.e., "Baa" by Moody's and "BBB" by S&P), and unrated
securities of comparable quality (as determined by HIMCO or Wellington
Management) are viewed to have adequate capacity for payment of principal and
interest, but do involve a higher degree of risk than that associated with
investments in debt securities in the higher rating categories and such
securities lack outstanding investment characteristics and do have speculative
characteristics.
HIGH YIELD-HIGH RISK DEBT SECURITIES
Each of the Capital Appreciation Fund, MidCap Fund, Growth and Income
Fund, Dividend and Growth Fund, International Opportunities Fund, Global Leaders
Fund, Small Company Fund, Stock Fund, and Advisers Fund is permitted to invest
up to 5% of its assets in fixed income securities rated as low as "C" by Moody's
or "CC" by S&P or of comparable quality if not rated. The Bond Income Strategy
Fund is permitted to invest up to 30% of its assets in securities rated in the
highest level below investment grade (i.e., "Ba" for Moody's or "BB" by S&P), or
if unrated, securities determined to be of comparable quality by HIMCO. Although
the High Yield Fund is permitted to invest up to 100% of its total assets in
securities rated below investment grade, no more than 10% of total assets will
be invested in securities rated below B3 by Moody's or B- by S&P, or if unrated,
determined to be of comparable quality by HIMCO. Securities rated below
investment grade are commonly referred to as "high yield-high risk debt
securities" or "junk bonds". Each rating category has within it different
gradations or sub-categories. For instance the "Ba" rating for Moody's includes
"Ba3", "Ba2" and "Ba1". Likewise the S&P rating category of "BB" includes "BB+",
"BB" and "BB-". If a Fund is authorized to invest in a certain rating category,
the Fund is also permitted to invest in any of the sub-categories or gradations
within that rating category. Securities in the highest category below investment
grade are considered to be of poor standing and predominantly speculative.
Descriptions of the debt securities ratings system, including their speculative
characteristics attributable to each ratings category, are set forth as an
appendix to this SAI. These securities are considered speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligations. Accordingly, it is possible that these types of
factors could, in certain instances, reduce the value of securities held by a
Fund with a commensurate effect on the value of a Fund's shares. If a security
is downgraded to a rating category which does not qualify for investment, HIMCO
or Wellington Management will use its discretion on whether to hold or sell
based upon its opinion on the best method to maximize value for shareholders
over the long term.
MORTGAGE-RELATED SECURITIES
The mortgage-related securities in which the Advisers Fund, High Yield
Fund and Bond Income Strategy Fund may invest include interests in pools of
mortgage loans made by lenders
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such as savings and loan institutions, mortgage bankers, commercial banks and
others. Pools of mortgage loans are assembled for sale to investors (such as the
Funds) by various governmental, government-related and private organizations.
These Funds may also invest in similar mortgage-related securities which provide
funds for multi-family residences or commercial real estate properties.
The value of these securities may be significantly affected by interest
rates, the market's perception of the issuers and the creditworthiness of the
parties involved. These securities may also be subject to prepayment risk. The
yield characteristics of the mortgage securities differ from those of
traditional debt securities. Among the major differences are that interest and
principal payments are made more frequently on mortgage securities, usually
monthly, and that principal may be prepaid at any time because the underlying
mortgage loans or other assets generally permit prepayment at any time.
Evaluating the risks associated with prepayment and determining the rate at
which prepayment is influenced by a variety of economic, geographic,
demographic, social and other factors including interest rate levels, changes in
housing needs, net equity built by mortgagors in the mortgaged properties, job
transfers, and unemployment rates. If a Fund purchases these securities at a
premium, a prepayment rate that is faster than expected will reduce yield to
maturity, while a prepayment rate that is slower than expected will have the
opposite effect of increasing yield to maturity. Conversely, if a Fund purchases
these securities at a discount, faster than expected prepayments will increase,
while slower than expected prepayments will reduce, yield to maturity. Amounts
available for reinvestment are likely to be greater during a period of declining
interest rates and, as a result, are likely to be reinvested at lower interest
rates than during a period of declining interest rates and, as a result, are
likely to be reinvested at lower interest rates than during a period of rising
interest rates. Accelerated prepayments on securities purchased by a Fund at a
premium also impose a risk of loss of principal because the premium may not have
been fully amortized at the time the principal is repaid in full.
The mortgage securities in which each Fund invests differ from
conventional bonds in that principal is paid back over the life of the mortgage
securities rather than at maturity. As a result, the holder of the mortgage
securities (i.e., a Fund) receives monthly scheduled payments of principal and
interest, and may receive unscheduled principal payments representing
prepayments on the underlying mortgages. When the holder reinvests the payments
and any unscheduled prepayments of principal it receives, it may receive a rate
of interest which is lower than the rate on the existing mortgage securities.
For this reason, mortgage securities are less effective than other types of U.S.
Government securities as a means of "locking in" long-term interest rates. See
"Illiquid Securities."
Up to 25% of the value of the Bond Income Strategy Fund's total assets
may be applied to mortgage dollar roll transactions. In a mortgage dollar roll a
fund sells mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type, coupon
and maturity) securities on a specified future date. The Fund will engage in
"covered rolls" or, if not covered, the Fund will establish a segregated account
with the Company's custodian consisting of cash, U.S. Government securities and
other liquid, high quality
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debt securities. A "covered roll" is a specific type of dollar roll for which
there is an offsetting cash position or a cash equivalent security position
which matures on or before the forward settlement date of the dollar roll
transaction.
ASSET-BACKED SECURITIES
The Advisers Fund, High Yield Fund, Bond Income Strategy Fund and Money
Market Fund may invest in asset-backed securities. The securitization techniques
used for asset-backed securities are similar to those used for mortgage-related
securities. The collateral for these securities has included home equity loans,
automobile and credit card receivables, boat loans, computer leases, airplane
leases, mobile home loans, recreational vehicle loans and hospital accounts
receivables. These Funds may invest in these and other types of asset-backed
securities that may be developed in the future. These securities may be subject
to the risk of prepayment or default. The ability of an issuer of asset-backed
securities to enforce its security interest in the underlying securities may be
limited.
EQUITY SECURITIES
Each Fund except the Bond Income Strategy Fund and High Yield Fund as
described below and except the Money Market Fund may invest all or a portion of
their assets in equity securities which include common stocks, preferred stocks
(including convertible preferred stock) and rights to acquire such securities.
In addition, these Funds may invest in securities such as bonds, debentures and
corporate notes which are convertible into common stock at the option of the
holder. The Bond Income Strategy Fund and High Yield Fund may each invest up to
15% of its total assets in preferred stocks, convertible securities, and
securities carrying warrants to purchase equity securities. The Bond Income
Strategy Fund and High Yield Fund will not invest in common stocks directly, but
may retain, for reasonable periods of time, common stocks acquired upon
conversion of debt securities or upon exercise of warrants acquired with debt
securities.
SMALL CAPITALIZATION SECURITIES
All Funds except the Money Market Fund may invest in equity securities
of companies with market capitalizations within the range represented by the
Russell 2000 Index ("Small Capitalization Securities"). Because the issuers of
Small Capitalization Securities tend to be smaller or less well-established
companies, they may have limited product lines, market share or financial
resources. As a result, Small Capitalization Securities are often less
marketable and experience a higher level of price volatility than securities of
larger or more well-established companies.
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NON-U.S. SECURITIES
Each Fund is permitted to invest a portion of its assets in non-U.S.
securities, including, in the case of permitted equity investments, American
Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs"). ADRs are
certificates issued by a U.S. bank or trust company and represent the right to
receive securities of a non-U.S. issuer deposited in a domestic bank or non-U.S.
branch of a U.S. bank. ADRs are traded on a U.S. securities exchange, or in an
over-the-counter market, and are denominated in U.S. dollars. GDRs are
certificates issued globally and evidence a similar ownership arrangement. GDRs
are traded on non-U.S. securities exchanges and are denominated in non-U.S.
currencies. The value of an ADR or a GDR will fluctuate with the value of the
underlying security, will reflect any changes in exchange rates and otherwise
will involve risks associated with investing in non-U.S. securities. When
selecting securities of non-U.S. issuers, HIMCO or Wellington Management will
evaluate the economic and political climate and the principal securities markets
of the country in which an issuer is located.
The Small Company, Capital Appreciation, MidCap, Stock, Growth and
Income, Dividend and Growth, and Advisers Funds are permitted to invest up to
20% of their assets in non-U.S. companies. The Money Market Fund may invest up
to 25% of its assets, the Bond Income Strategy and High Yield Funds are
permitted to invest up to 30% of their assets and the International
Opportunities Fund may invest up to 100% of its assets in such companies. The
Global Leaders Fund invests in at least five countries, one of which is the
United States, however, the fund has no limit on the amount of assets that must
be invested in each country.
Investing in securities issued by non-U.S. issuers involves
considerations and potential risks not typically associated with investing in
obligations issued by U.S. issuers. Less information may be available about
non-U.S. issuers compared with U.S. issuers. For example, non-U.S. companies
generally are not subject to uniform accounting, auditing and financial
reporting standards or to other regulatory practices and requirements comparable
to those applicable to U.S. companies. In addition, the values of non-U.S.
securities are affected by changes in currency rates or exchange control
regulations, restrictions or prohibition on the repatriation of non-U.S.
currencies, application of non-U.S. tax laws, including withholding taxes,
changes in governmental administration or economic or monetary policy (in the
U.S. or outside the U.S.) or changed circumstances in dealings between nations.
Costs are also incurred in connection with conversions between various
currencies.
Investing in non-U.S. sovereign debt will expose a Fund to the direct
or indirect consequences of political, social or economic changes in the
developing and emerging countries that issue the securities. The ability and
willingness of sovereign obligers in developing and emerging countries or the
governmental authorities that control repayment of their external debt to pay
principal and interest on such debt when due may depend on general economic and
political conditions within the relevant country. Countries such as those in
which the Funds may invest have historically experienced, and may continue to
experience, high rates of inflation, high interest rates, exchange rate trade
difficulties and unemployment. Some of these countries are also characterized by
political uncertainty or instability. Additional factors which may influence the
ability or willingness to service debt include, but are not limited to, a
country's cash flow situation, the availability of sufficient foreign exchange
on the date a payment is due, the relative size of its debt service burden to
the economy as a whole, and its government's policy towards the IMF, the World
Bank and other international agencies.
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From time to time, the International Opportunities Fund, Global Leaders
Fund, High Yield Fund and Bond Income Strategy Fund may invest up to 25%, 25%,
30% and 30%, respectively, of their assets in securities of issuers located in
emerging countries. Compared to the United States and other developed countries,
developing countries may have relatively unstable governments, economies based
on only a few industries, and securities markets that are less liquid and trade
a small number of securities. Prices on these exchanges tend to be volatile and,
in the past, securities in these countries have offered greater potential for
gain (as well as loss) than securities of companies located in developed
countries. Although the High Yield Fund may invest up to 30% of its assets in
assets of non-U.S. companies, only 10% of such amount may be represented in
non-U.S. currencies.
CURRENCY TRANSACTIONS
Each Fund, except the Money Market Fund, may engage in currency
transactions to hedge the value of portfolio securities denominated in
particular currencies against fluctuations in relative value. Currency
transactions include forward currency contracts, currency swaps, exchange-listed
and over-the-counter ("OTC") currency futures contracts and options thereon and
exchange listed and OTC options on currencies.
Forward currency contracts involve a privately negotiated obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. Currency swaps are agreements to exchange
cash flows based on the notional difference between or among two or more
currencies. See "Swap Agreements."
The use of currency transactions to protect the value of a Fund's
assets against a decline in the value of a currency does not eliminate potential
losses arising from fluctuations in the value of the Fund's underlying
securities. Further, the Funds may enter into currency transactions only with
counterparties that HIMCO or Wellington Management deems to be creditworthy.
The Funds may also enter into options and futures contracts relative to
foreign currency to hedge against fluctuations in foreign currency rates. See
"Options and Futures Contracts" for a discussion of risk factors relating to
foreign currency transactions including options and futures contracts related
thereto.
OPTIONS AND FUTURES CONTRACTS
In seeking to protect against the effect of changes in equity market
values, currency exchange rates or interest rates that are adverse to the
present or prospective position of the Funds, for cash flow management, and, to
a lesser extent, to enhance returns, each Fund, except the Money Market Fund,
may employ certain hedging, income enhancement and risk management techniques,
including the purchase and sale of options, futures and options on futures
involving equity and debt securities and foreign currencies, aggregates of
equity and debt securities, indices
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of prices of equity and debt securities and other financial indices. A Fund's
ability to engage in these practices may be limited by tax considerations and
certain other legal considerations.
A Fund may write covered options and purchase put and call options on
individual securities as a partial hedge against an adverse movement in the
security and in circumstances consistent with the objective and policies of the
Fund. This strategy limits potential capital appreciation in the portfolio
securities subject to the put or call option.
The Funds may also write covered put and call options and purchase put
and call options on foreign currencies to hedge against the risk of foreign
exchange fluctuations on foreign securities the particular Fund holds in its
portfolio or that it intends to purchase. For example, if a Fund enters into a
contract to purchase securities denominated in foreign currency, it could
effectively establish the maximum U.S. dollar cost of the securities by
purchasing call options on that foreign currency. Similarly, if a Fund held
securities denominated in a foreign currency and anticipated a decline in the
value of that currency against the U.S. dollar, the Fund could hedge against
such a decline by purchasing a put option on the foreign currency involved.
Aggregates are composites of equity or debt securities that are not
tied to a commonly known index. An index is a measure of the value of a group of
securities or other interests. An index assigns relative values to the
securities included in that index, and the index fluctuates with changes in the
market value of those securities. A Fund may purchase put and call options and
write covered put and call options on aggregates of equity and debt securities,
and may enter into futures contracts and options thereon for the purchase or
sale of aggregates of equity and debt securities, indices of equity and debt
securities and other financial indices, all for the purpose of protecting
against potential changes in the market value of portfolio securities or in
interest rates.
A Fund may write covered options only. "Covered" means that, so long as
a Fund is obligated as the writer of a call option on particular securities or
currency, it will own either the underlying securities or currency or an option
to purchase the same underlying securities or currency having an expiration date
not earlier than the expiration date of the covered option and an exercise price
equal to or less than the exercise price of the covered option, or will
establish or maintain with its custodian for the term of the option a segregated
account consisting of cash, U.S. Government securities or other liquid, high
grade debt obligations having a value equal to the fluctuating market value of
the optioned securities or currencies. A Fund will cover any put option it
writes on particular securities or currency by maintaining a segregated account
with its custodian as described above.
To hedge against fluctuations in currency exchange rates, a Fund may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. For
example, a Fund may use foreign currency futures contracts when it anticipates a
general weakening of the foreign currency exchange rate that could adversely
affect the market values of the Fund's foreign securities holdings. In this
case, the sale of futures contracts on the underlying currency may reduce the
risk of a reduction in market value
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<PAGE> 125
caused by foreign currency variations and, by so doing, provide an alternative
to the liquidation of securities positions in the Fund and resulting transaction
costs. When the Fund anticipates a significant foreign exchange rate increase
while intending to invest in a non-U.S. security, the Fund may purchase a
foreign currency futures contract to hedge or partially hedge against a rise in
foreign exchange rates pending completion of the anticipated transaction. Such a
purchase of a futures contract would serve as a temporary measure to protect the
Fund against any rise in the foreign exchange rate that may add additional costs
to acquiring the non-U.S. security position. The Fund similarly may use futures
contracts on equity and debt securities to hedge against fluctuations in the
value of securities it owns or expects to acquire.
The Funds also may purchase call or put options on foreign currency
futures contracts to obtain a fixed foreign exchange rate at limited risk. A
Fund may purchase a call option on a foreign currency futures contract to hedge
against a rise in the foreign exchange rate while intending to invest in a
non-U.S. security of the same currency. A Fund may purchase put options on
foreign currency futures contracts to hedge against a decline in the foreign
exchange rate or the value of its non-U.S. securities. A Fund may write a call
option on a foreign currency futures contract as a partial hedge against the
effects of declining foreign exchange rates on the value of non-U.S. securities
and in circumstances consistent with a Fund's investment objectives and
policies.
Options on indexes are settled in cash, not in delivery of securities.
The exercising holder of an index option receives, instead of a security, cash
equal to the difference between the closing price of the securities index and
the exercise price of the option. When a Fund writes a covered option on an
index, a Fund will be required to deposit and maintain with a custodian cash or
high-grade, liquid short-term debt securities equal in value to the aggregate
exercise price of a put or call option pursuant to the requirements and the
rules of the applicable exchange. If, at the close of business on any day, the
market value of the deposited securities falls below the contract price, the
Fund will deposit with the custodian cash or high-grade, liquid short-term debt
securities equal in value to the deficiency.
To the extent that a Fund enters into futures contracts, options on
futures contracts and options on foreign currencies that are traded on an
exchange regulated by the Commodities Futures Trading Commission ("CFTC"), in
each case that are not for "bona fide hedging" purposes (as defined by
regulations of the CFTC), the aggregate initial margin and premiums required to
establish those positions may not exceed 5% of the liquidation value of the
Fund's portfolio, after taking into account the unrealized profits and
unrealized losses on any such contracts the Fund has entered into. However,
options which are currently exercisable may be excluded in computing the 5%
limit. Adoption of this guideline will not limit the percentage of a Fund's
assets at risk to 5%.
Although any one Fund may not employ all or any of the foregoing
strategies, its use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve certain
investment risks and transaction costs to which it
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<PAGE> 126
might not be subject were such strategies not employed. Such risks include: (1)
dependence on the ability of HIMCO or Wellington Management to predict movements
in the prices of individual securities, fluctuations in the general securities
markets or market sections and movements in interest rates and currency markets;
(2) imperfect correlation between movements in the price of the securities or
currencies hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts and options thereon or to use forward
currency contracts are different from those needed to select the securities in
which a Fund invests; (4) lack of assurance that a liquid secondary market will
exist for any particular option, futures contract, option thereon or forward
contract at any particular time, which may affect a Fund's ability to establish
or close out a position; (5) possible impediments to effective portfolio
management or the ability to meet current obligations caused by the segregation
of a large percentage of a Fund's assets to cover its obligations; and (6) the
possible need to defer closing out certain options, futures contracts, options
thereon and forward contracts in order to continue to qualify for the beneficial
tax treatment afforded "regulated investment companies" under the Code. In the
event that the anticipated change in the price of the securities or currencies
that are the subject of such a strategy does not occur, it may be that a Fund
would have been in a better position had it not used such a strategy at all.
SWAP AGREEMENTS
Each Fund, except the Money Market Fund, may enter into interest rate
swaps, currency swaps, and other types of swap agreements such as caps, collars,
and floors. In a typical interest rate swap, one party agrees to make regular
payments equal to a floating interest rate multiplied by a "notional principal
amount," in return for payments equal to a fixed rate multiplied by the same
amount, for a specified period of time. If a swap agreement provides for
payments in different currencies, the parties might agree to exchange the
notional principal amount as well. Swaps may also depend on other prices or
rates, such as the value of an index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate exceeds
an agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.
Swap agreements will tend to shift a Fund's investment exposure from
one type of investment to another. For example, if a Fund agreed to exchange
floating rate payments for fixed rate payments, the swap agreement would tend to
decrease the Fund's exposure to rising interest rates. Caps and floors have an
effect similar to buying or writing options. Depending on how they are used,
swap agreements may increase or decrease the overall volatility of a Fund's
investments and its share price and yield.
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<PAGE> 127
The Funds will usually enter into interest rate swaps on a net basis,
i.e., where the two parties make net payments with a Fund receiving or paying,
as the case may be, only the net amount of the two payments. The net amount of
the excess, if any, of a Fund's obligations over its entitlement with respect to
each interest rate swap will be U.S. Government Securities or other liquid high
grade debt obligations having an aggregate net asset value at least equal to the
accrued excess will be maintained by the Company's custodian in a segregated
account. If a Fund enters into a swap on other than a net basis, the Fund will
maintain in the segregated account the full amount of the Fund's obligations
under each such swap. The Fund may enter into swaps, caps, collars and floors
with member banks of the Federal Reserve System, members of the New York Stock
Exchange or other entities determined by HIMCO or Wellington Management,
pursuant to procedures adopted and reviewed on an ongoing basis by the Board of
Directors, to be creditworthy. If a default occurs by the other party to such
transaction, a Fund will have contractual remedies pursuant to the agreements
related to the transaction but such remedies may be subject to bankruptcy and
insolvency laws which could affect such Fund's rights as a creditor.
The swap market has grown substantially in recent years with a large
number of banks and financial services firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap market
has become relatively liquid. Caps, collars and floors are more recent
innovations and they are less liquid than swaps. There can be no assurance,
however, that a Fund will be able to enter into interest rate swaps or to
purchase interest rate caps, collars or floors at prices or on terms HIMCO or
Wellington Management, as appropriate, believes are advantageous to such Fund.
In addition, although the terms of interest rate swaps, caps, collars and floors
may provide for termination, there can be no assurance that a Fund will be able
to terminate an interest rate swap or to sell or offset interest rate caps,
collars or floors that it has purchased. Interest rate swaps, caps, collars and
floors are considered by the SEC to be illiquid securities.
The successful utilization of hedging and risk management transactions
requires skills different from those needed in the selection of a Fund's
portfolio securities and depends on HIMCO's or Wellington Management's ability
to predict correctly the direction and degree of movements in interest rates.
Although the Funds believe that use of the hedging and risk management
techniques described above will benefit the Funds, if HIMCO's or Wellington
Management's judgment about the direction or extent of the movement in interest
rates is incorrect, a Fund's overall performance would be worse than if it had
not entered into any such transactions. For example, if a Fund had purchased an
interest rate swap or an interest rate floor to hedge against its expectation
that interest rates would decline but instead interest rates rose, such Fund
would lose part or all of the benefit of the increased payments it would receive
as a result of the rising interest rates because it would have to pay amounts to
its counterparties under the swap agreement or would have paid the purchase
price of the interest rate floor. These activities are commonly used when
managing derivative investments.
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<PAGE> 128
ILLIQUID SECURITIES
Each Fund is permitted to invest in illiquid securities. No illiquid
securities will be acquired if upon the purchase more than 10% of Money Market
Fund's net assets or 15% of each other Fund's net assets would consist of such
securities. "Illiquid Securities" are securities that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price used to determine a Fund's net asset value. Each Fund
may purchase certain restricted securities commonly known as Rule 144A
securities that can be resold to institutions and which may be determined to be
liquid pursuant to policies and guidelines of the Board of Directors. A Fund may
not be able to sell illiquid securities when HIMCO or Wellington Management
considers it desirable to do so or may have to sell such securities at a price
that is lower than the price that could be obtained if the securities were more
liquid. A sale of illiquid securities may require more time and may result in
higher dealer discounts and other selling expenses than does the sale of
securities that are not illiquid. Illiquid securities also may be more difficult
to value due to the unavailability of reliable market quotations for such
securities, and investment in illiquid securities may have an adverse impact on
net asset value.
Under current interpretations of the SEC Staff, the following types of
securities in which a Fund may invest will be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain restricted
securities (securities whose public resale is subject to legal or contractual
restrictions); (3) options, with respect to specific securities, not traded on a
national securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
Each Fund is permitted to purchase or sell securities on a when-issued
or delayed-delivery basis. When-issued or delayed-delivery transactions arise
when securities are purchased or sold with payment and delivery taking place in
the future in order to secure what is considered to be an advantageous price and
yield at the time of entering into the transaction. While the Funds generally
purchase securities on a when-issued basis with the intention of acquiring the
securities, the Funds may sell the securities before the settlement date if
HIMCO or Wellington Management deems it advisable. At the time a Fund makes the
commitment to purchase securities on a when-issued basis, the Fund will record
the transaction and thereafter reflect the value, each day, of such security in
determining the net asset value of the Fund. At the time of delivery of the
securities, the value may be more or less than the purchase price. A Fund will
maintain, in a segregated account, cash, U.S. Government securities or other
liquid, high-grade debt obligations having a value equal to or greater than the
Fund's purchase commitments; likewise a Fund will segregate securities sold on a
delayed-delivery basis.
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<PAGE> 129
OTHER INVESTMENT COMPANIES
Each Fund is permitted to invest in other investment companies. The
investment companies in which a Fund would invest may or may not be registered
under the 1940 Act. Securities in certain countries are currently accessible to
the Funds only through such investments. The investment in other investment
companies is limited in amount by the 1940 Act, and will involve the indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. Under the 1940 Act, a Fund will not purchase a security of
an investment company if, as a result, (1) more than 10% of the Fund's assets
would be invested in securities of other investment companies, (2) such purchase
would result in more than 3% of the total outstanding voting securities of any
one such investment company being held by the Fund; or (3) more than 5% of the
Fund's assets would be invested in any one such investment company.
PORTFOLIO SECURITIES LENDING
Each of the Funds may lend its portfolio securities to broker/dealers
and other institutions as a means of earning interest income. The borrower will
be required to deposit as collateral, cash, cash equivalents, U.S. government
securities or other high quality liquid debt securities that at all times will
be at least equal to 100% of the market value of the loaned securities and such
amount will be maintained in a segregated account of the respective Fund. While
the securities are on loan the borrower will pay the respective Fund any income
accruing thereon.
Delays or losses could result if a borrower of portfolio securities
becomes bankrupt or defaults on its obligation to return the loaned securities.
The Funds may lend securities only if: (1) each loan is fully secured by
appropriate collateral at all times; and (2) the value of all loaned securities
of any Fund is not more than 33-1/3% of the Fund's total assets taken at the
time of the loan (including collateral received in connection with any loans).
MANAGEMENT OF THE COMPANY
The business of the Company is managed by a Board of Directors, who
elect officers who are responsible for the day-to-day operations of the Company
and who execute policies formulated by the directors. The directors and officers
of the Company and their principal business occupations for the last five years
are set forth below. Those directors who are deemed to be "interested persons"
of the Company, as that term is defined in the 1940 Act are indicated by an
asterisk next to their respective names.
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<PAGE> 130
<TABLE>
<CAPTION>
POSITION
NAME, ADDRESS, AGE HELD WITH PRINCIPAL OCCUPATIONS HELD
FUND DURING LAST 5 YEARS
<S> <C> <C>
JOSEPH ANTHONY BIERNAT (age 71) Director Mr. Biernat served as Senior Vice President and
30 Hurdle Fence Drive Treasurer of United Technologies Corporation from 1984
Avon, CT 06001 until March, 1987, when he retired. He subsequently
served as Executive Vice President of Boston Security
Counselors, Inc., Hartford, Connecticut (1988-1989),
and served as Vice President-Client Services of Wright
Investors' Service, Bridgeport, Connecticut
(1989-1990). Mr. Biernat is a director of HPSC, Inc.,
a Boston based finance and leasing company.
WINIFRED ELLEN COLEMAN (age 66) Director Ms. Coleman has served as President of Saint Joseph
27 Buckingham Lane College since 1991. She is a Director of LeMoyne
West Hartford, CT 06117 College, St. Francis Hospital, Connecticut Higher
Education Student Loan Administration, and The
National Conference (Greater Hartford Board of
Directors).
JOSEPH HARRY GAREAU* (age 51) Director Mr. Gareau serves as President and Chief Investment
55 Farmington Avenue and Officer of HIMCO. Previously he served as Executive
Hartford, CT 06105 President Vice President and Chief Investment Officer of The
Hartford from 1993 - 1996, as Senior Vice President and
Chief Investment Officer/Property-Casualty Division
(September, 1992 - April, 1993) and as Vice President
(October, 1987 - September, 1992). Mr. Gareau is also
a Director of HIMCO, a Director and President of HL
Investment Advisors, LLC ("HL Advisors"), a Hartford
affiliated registered investment adviser, and a
Director and Executive Vice President of HIFSCO.
WILLIAM ATCHISON O'NEILL (age 68) Director The Honorable William A. O'Neill served as Governor
Box 360 of the State of Connecticut from 1980 until 1991. He
East Hampton, CT 06424 is presently retired.
MILLARD HANDLEY PRYOR, JR. (age 65) Director Mr. Pryor has served as Managing Director of Pryor &
695 Bloomfield Avenue Clark Company, Hartford, Connecticut, since June,
Bloomfield, CT 06002 1992. He served as Chairman and Chief Executive
Officer of Corcap, Inc. from 1988-1992. In addition,
Mr. Pryor is a Director of Pryor & Clark Company,
Corcap, Inc., the Wiremold Company, Hoosier
Magnetics, Inc., Infodata Systems, Inc. and Pacific
Scientific Corporation.
LOWNDES ANDREW SMITH* (age 59) Director and Mr. Smith has served as Vice Chairman of Hartford
P.O. Box 2999 Chairman Financial Services Group, Inc. since February, 1997,
Hartford, CT 06104-2999 as President and Chief Executive Officer of Hartford
Life, Inc. since February, 1997, and as President and
Chief Operating Officer of The Hartford Life
Insurance
</TABLE>
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<PAGE> 131
<TABLE>
<CAPTION>
POSITION
NAME, ADDRESS, AGE HELD WITH PRINCIPAL OCCUPATIONS HELD
FUND DURING LAST 5 YEARS
<S> <C> <C>
Companies since January, 1989. He was formerly Senior
Vice President and Group Comptroller of The Hartford
Insurance Group from 1987-1989. He has been a Director
of Connecticut Children's Medical Center since 1993, a
Director of American Counsel of Life Insurance from
1993-1996 and 1998-present, and a Director of
Insurance Marketplace Standards Association from 1996
to present. Mr. Smith is also President and a
Director of HIFSCO.
JOHN KELLEY SPRINGER (age 67) Director Mr. Springer currently serves as Chairman of Medspan,
225 Asylum Avenue Inc. From 1986 to 1997 he served as Chief Executive
Hartford, CT 06103 Officer of Connecticut Health System, Inc. Formerly, he
served as the Chief Executive Officer of Hartford
Hospital, Hartford, Connecticut (June, 1976 - August,
1989). He is also a Director of Hartford Hospital, and
CHS Insurance Ltd. (Chairman).
PETER CUMMINS (age 61) Vice Mr. Cummins has served as Senior Vice President since
P. O. Box 2999 President 1997 and Vice President since 1989 of sales and
Hartford, CT 06104-2999 marketing of the Individual Life and Annuity Division
of Hartford Life Insurance Company. He is also a
Director and Vice President of HIFSCO.
ANDREW WILLIAM KOHNKE (age 40) Vice Mr. Kohnke serves as Managing Director and a Director
55 Farmington Avenue President of HIMCO. Previously he served as Vice President of
Hartford, CT 06105 HIMCO (1986-1996) and Investment Manager for HIMCO
(1983-1986). Mr. Kohnke is also a Director and Managing
Director of HL Advisors and a Director and Vice
President of HIFSCO.
THOMAS MICHAEL MARRA (age 40) Vice Mr. Marra has served as an Executive Vice President
P.O. Box 2999 President since 1996, and as Senior Vice President and Director
Hartford, CT 06104-2999 since 1994 of the Individual Life and Annuity Division
of Hartford Life Insurance Company. Mr. Marra is
also a Director and Executive Vice President of HIFSCO.
Mr. Marra joined Hartford Life Insurance Company in
1980.
CHARLES MINER O'HALLORAN (age 51) Vice Mr. O'Halloran has served as Senior Vice President
Hartford Plaza President since January, 1998, Corporate Secretary from 1996 to
Hartford, CT 06115 and Secretary 1998, Vice President since 1994 and Senior Associate
General Counsel since 1988 of The Hartford Financial
Services Group, Inc. Mr. O'Halloran is also a Director,
Secretary and General Counsel of HIMCO and HL Advisors
and a Director of HIFSCO.
GEORGE RICHARD JAY (age 46) Controller Mr. Jay has served as Secretary and Director, Life and
</TABLE>
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<PAGE> 132
<TABLE>
<CAPTION>
POSITION
NAME, ADDRESS, AGE HELD WITH PRINCIPAL OCCUPATIONS HELD
FUND DURING LAST 5 YEARS
<S> <C> <C>
P.O. Box 2999 and Treasurer Equity Accounting and Financial Control, of
Hartford, CT 06104-2999 Hartford Life Insurance Company since 1987.
KEVIN J. CARR (age 44) Assistant Mr. Carr has served as Counsel since November 1996 and
55 Farmington Avenue Secretary Associate Counsel since November 1995, of The Hartford
Hartford, CT 06105 and Counsel Financial Services Group, Inc. Formerly he served as
Counsel of Connecticut Mutual Life Insurance Company
from March 1995 to November 1995, Associate Counsel
of 440 Financial Group of Worcester from 1994 to 1995
and Corporate Counsel-General Manager of Parker Media,
a Hartford-based publishing company, from 1990-1994. Mr.
Carr is also an Assistant Secretary of HIFSCO and HIMCO.
CHRISTOPHER JAMES COSTA (age 34) Assistant Mr. Costa has served as the Tax Manager of The
P.O. Box 2999 Secretary Hartford-Sponsored Mutual Funds since July 1996.
Hartford, CT 06104-2999 Formerly he served as the Tax Manager and Assistant
Treasurer of The Phoenix Mutual Funds from June 1994 to
June 1996 and as a Tax Consultant with Arthur Andersen
LLP from September 1990 to June 1994.
</TABLE>
An Audit Committee and Nominating Committee have been appointed for the
Company. Each Committee is made up of those directors who are not "interested
persons" of the Company.
All board members and officers of the Fund are also board members and
officers of the following registered investment companies: Hartford Capital
Appreciation HLS Fund, Inc., Hartford Dividend and Growth HLS Fund, Inc.,
Hartford MidCap HLS Fund, Inc., Hartford Stock HLS Fund, Inc., Hartford Index
HLS Fund, Inc., Hartford Advisers HLS Fund, Inc., Hartford Mortgage Securities
HLS Fund, Inc., Hartford Bond HLS Fund, Inc., Hartford International
Opportunities HLS Fund, Inc., Hartford International Advisers HLS Fund, Inc.,
Hartford Money Market HLS Fund, Inc., Hartford Small Company HLS Fund, Inc. and
Hartford Series Fund, Inc. Shares of each of these investment companies are
offered to and may only be purchased by holders of variable annuity and variable
life insurance contracts issued by The Hartford and its affiliates.
Certain officers of the Funds are also officers and directors of HIFSCO
and/or HIMCO; Lowndes A. Smith, Chairman of the Board of the Company, is a
Director and President of HIFSCO; Joseph H. Gareau, President and a Director of
the Company, is a Director and the Executive Vice President of HIFSCO and a
Director and President of HIMCO; Thomas M. Marra, Vice President of the Company
is a Director and Executive Vice President of HIFSCO; Peter W. Cummins, Vice
President of the Company is a Director and Vice President of HIFSCO; Andrew W.
Kohnke, Vice President of the Company, is a Director and Vice President of
HIFSCO and a Managing Director and Director of HIMCO; George R. Jay, Treasurer
and Controller of
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<PAGE> 133
the Company is Controller of HIFSCO; Charles M. O'Halloran, Vice President and
Secretary of the Company, is a Director, Secretary and General Counsel of HIMCO
and Kevin J. Carr, Assistant Secretary and Counsel of the Company, is Assistant
Secretary of HIFSCO.
The sales load for Class A shares of the Company is waived for present
and former officers, directors and employees of the Company, The Hartford,
Wellington Management, the transfer agent and their affiliates.
COMPENSATION OF OFFICERS AND DIRECTORS. The Company pays no salaries or
compensation to any of its officers or directors affiliated with The Hartford.
The chart below sets forth the fees paid or expected to be paid by the Company
to the non-interested Directors and certain other information:
<TABLE>
<CAPTION>
Pension Or Total Compensation
Aggregate Retirement Benefits Estimated Annual From Company And
Compensation From Accrued As Part Of Benefits Upon Company Complex Paid
Name of Person, Position Company Fund Expenses Retirement To Directors*
<S> <C> <C> <C> <C>
Joseph A. Biernat, Director $ 6,100 $ 0 $ 0 $25,000
Winifred E. Coleman, Director $ 6,100 $ 0 $ 0 $25,000
William A. O'Neill, Director $ 6,100 $ 0 $ 0 $25,000
Millard H. Pryor, Director $ 6,100 $ 0 $ 0 $25,000
John K. Springer, Director $ 6,100 $ 0 $ 0 $25,000
</TABLE>
*As of December 31, 1998, there were twenty-seven funds in the Complex.
Other Information about the Company. The Company was incorporated in Maryland on
March 21, 1996. The authorized capital stock of the Company consists of 4.2
billion shares of common stock, par value $0.001 per share (Common Stock). The
shares of Common Stock are divided into twelve series: Small Company Fund
(300,000,000 shares); Capital Appreciation Fund (300,000,000 shares); MidCap
Fund (300,000,000 shares); International Opportunities Fund (300,000,000
shares); Global Leaders Fund (300,000,000 shares); Stock Fund (300,000,000
shares); Growth and Income Fund (300,000,000 shares); Dividend and Growth Fund
(300,000,000 shares); Advisers Fund (400,000,000 shares); High Yield Fund
(300,000,000 shares); Bond Income Strategy Fund (300,000,000 shares) and Money
Market Fund (800,000,000 shares). The Board of Directors may reclassify
authorized shares to increase or decrease the allocation of shares among the
series described above or to add any new series to the Fund. The Board of
Directors is also authorized, from time to time and without further shareholder
approval, to authorize additional shares and to classify and reclassify existing
and new series into one or more classes. Accordingly, the Directors have
authorized the issuance of four classes of shares of each of the Funds
designated in each instance as Class A, Class B, Class C and Class Y shares.
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<PAGE> 134
As of January 31, 1999, the officers and directors as a group
beneficially owned less than 1% of the outstanding shares of the Company. As of
that date, the following persons held an interest in the following Funds equal
to 5% or more of such Fund's outstanding shares:
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
SMALL COMPANY FUND
HL Investment Advisors 20.44%
Hartford, CT
Edward D. Jones & Co. 49.98% 11.79% 19.11%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee 87.78%
The Hartford Investment & Savings Plan
Jersey City, NJ
CAPITAL APPRECIATION FUND
Edward D. Jones & Co. 42.71% 10.95% 14.32%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee 79.13%
The Hartford Investment & Savings Plan
Jersey City, NJ
MIDCAP FUND
HL Investment Advisors 10.13% 8.29% 8.67%
Hartford, CT
Edward D. Jones & Co. 46.32% 15.51% 11.09%
For the Sole Benefit of Its Customers
Maryland Heights, MO
</TABLE>
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<PAGE> 135
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Bankers Trust Company, Trustee 68.68%
The Hartford Investment & Savings Plan
Jersey City, NJ
Wellington Management Retirement and 5.78%
Pension Plan
Boston, MA
INTERNATIONAL OPPORTUNITIES FUND
HL Investment Advisors 12.58% 19.90%
Hartford, CT
Edward D. Jones & Co. 69.97% 23.26% 35.60%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee 75.22%
The Hartford Investment & Savings Plan
Jersey City, NJ
GLOBAL LEADERS FUND
HL Investment Advisors 55.48% 62.76% 48.94% 54.32%
Hartford, CT
Edward D. Jones & Co. 26.13% 12.42% 5.68%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Joe M. Thomson 5.41%
Phoenixville, PA
Donaldson Lufkin Jenrette Securities Corp. Inc. 6.63%
For the Sole Benefit of Its Customers
Jersey City, NJ
Painewebber Custodian for 5.97%
H. Marie Sanderson Trustee FBO
H. Marie Sanderson Trust
Burr Ridge, IL
Bankers Trust Company, Trustee 45.66%
The Hartford Investment & Savings Plan
Jersey City, NJ
</TABLE>
-24-
<PAGE> 136
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
STOCK FUND
HL Investment Advisors 75.13%
Hartford, CT
Edward D. Jones & Co. 57.96% 14.97% 10.44%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Planco Inc. Profit Sharing Trust 6.85%
Planco Inc. Employees Discretion
Paoli, PA
Planco Inc. Profit Sharing Trust 6.64%
Planco Inc. Employees Ongoing
Paoli, PA
GROWTH AND INCOME FUND
HL Investment Advisors 19.44% 17.21% 89.44%
Hartford, CT
Edward D. Jones & Co. 60.43% 40.30% 45.49%
For the Sole Benefit of Its Customers
Maryland Heights, MO
DIVIDEND AND GROWTH FUND
Edward D. Jones & Co. 63.30% 18.99% 11.75%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee 90.11%
The Hartford Investment & Savings Plan
Jersey City, NJ
Planco Inc. Profit Sharing Trust 6.16%
Planco Inc. Employees Ongoing
Paoli, PA
</TABLE>
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<PAGE> 137
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
ADVISERS FUND
Edward D. Jones & Co. 61.79% 16.77% 8.49%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee 97.01%
The Hartford Investment & Savings Plan
Jersey City, NJ
HIGH YIELD FUND
HL Investment Advisors 78.68% 36.94% 36.56% 68.70%
Hartford, CT
Edward D. Jones & Co. 16.66% 10.24% 15.15%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee 31.29%
The Hartford Investment & Savings Plan
Jersey City, NJ
BOND INCOME STRATEGY FUND
HL Investment Advisors 49.36% 18.22% 20.77%
Hartford, CT
Edward D. Jones & Co. 27.61% 14.55% 25.57
For the Sole Benefit of Its Customers
Maryland Heights, MO
Salomon Smith Barney Inc. 9.65%
For the Sole Benefit of Its Customers
New York, NY
J. C. Bradford & Co. Custodian for 5.95%
Willie Rencher &
Nashville, TN
</TABLE>
-26-
<PAGE> 138
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Bankers Trust Company, Trustee 79.14%
The Hartford Investment & Savings Plan
Jersey City, NJ
MONEY MARKET FUND
HL Investment Advisors 25.67% 17.49%
Hartford, CT
Edward D. Jones & Co. 5.07%
For the Sole Benefit of Its Customers
Maryland Heights, MO
State Street Bank & Trust Cust 7.42%
403B Plan Escondido High School
FBO Patricia A. Anderson
Escondido, CA
First Clearing Corporation 5.39%
Christine L. Cook IRA R/O
WFS as Custodian
Plainsboro, NJ
Linda S. Melera 5.07%
Stockton, CA
Bankers Trust Company, Trustee 99.99%
The Hartford Investment & Savings Plan
Jersey City, NJ
</TABLE>
The shares of the Funds are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Directors and accountants. Shares of a Fund vote together as a class on matters
that affect the Fund in substantially the same manner. Matters pertaining only
to one or more Funds will be voted upon only by those Funds. As to matters
affecting a single class, shares of such class will vote separately. Shares of
the Funds do not have cumulative voting rights. The Company and the Funds do not
intend to hold annual meetings of shareholders unless required to do so by the
1940 Act or the Maryland statutes under which the Company is organized. Although
Directors are not elected annually by the shareholders, shareholders have under
certain circumstances the right to remove one or more Directors. If required by
applicable law, a meeting will be held to vote on the removal of a Director or
Directors of the Company if requested in writing by the holders of not less than
25% of the Company's outstanding shares. Each Fund's shares are fully paid, and
nonassessable and, when issued, have no preference, preemptive, conversion or
similar rights and are freely transferable.
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<PAGE> 139
The Company's Articles of Incorporation provide that the Directors,
officers and employees of the Company may be indemnified by the Company to the
fullest extent permitted by Maryland law and the federal securities laws. The
Company's Bylaws provide that the Fund shall indemnify each of its Directors,
officers and employees against liabilities and expenses reasonably incurred by
them, in connection with, or resulting from, any claim, action, suit or
proceeding, threatened against or otherwise involving such Director, officer or
employee, directly or indirectly, by reason of being or having been a Director,
officer or employee of the Company. Neither the Articles of Incorporation nor
the Bylaws authorize the Company to indemnify any Director or officer against
any liability to which he or she would otherwise be subject by reason of or for
willful misfeasance, bad faith, gross negligence or reckless disregard of such
person's duties.
INVESTMENT ADVISORY ARRANGEMENTS
The Company, on behalf of each Fund, has entered into an investment
management agreement with HIFSCO. The investment management agreement provides
that HIFSCO, subject to the supervision and approval of the Company's Board of
Directors, is responsible for the management of each Fund. In addition, HIFSCO
provides administrative personnel, services, equipment and facilities and office
space for proper operation of the Company. Although HIFSCO has agreed to arrange
for the provision of additional services necessary for the proper operation of
the Company, each Fund pays for these services directly.
With respect to the Small Company Fund, Capital Appreciation Fund,
MidCap Fund, International Opportunities Fund, Global Leaders Fund, Stock Fund,
Growth and Income Fund, Dividend and Growth Fund and Advisers Fund, HIFSCO has
entered into a investment subadvisory agreement with Wellington Management
Company ("Wellington Management"). Under the sub-advisory agreement, Wellington
Management, subject to the general supervision of the Board of Directors and
HIFSCO, is responsible for (among other things) the day-to-day investment and
reinvestment of the assets of such Funds and furnishing each such Fund with
advice and recommendations with respect to investments and the purchase and sale
of appropriate securities for each Fund. With respect to the High Yield Fund,
Bond Income Strategy Fund and Money Market Fund, HIFSCO has entered into an
investment services agreement with HIMCO for the provision of the day-to-day
investment management services.
As provided by the investment management agreement, each Fund pays
HIFSCO an investment management fee, which is accrued daily and paid monthly,
equal on an annual basis to a stated percentage of the respective Fund's average
daily net asset value. HIFSCO, not any Fund, pays the subadvisory fees to
Wellington Management and HIMCO.
No person other than HIMCO or Wellington Management and their directors
and employees regularly furnishes advice to the Funds with respect to the
desirability of the Funds investing in, purchasing or selling securities. HIMCO
and Wellington Management may from time
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<PAGE> 140
to time receive statistical or other information regarding general economic
factors and trends, from The Hartford and its affiliates.
Securities held by any Fund may also be held by other funds and other
clients for which HIMCO, Wellington Management or their respective affiliates
provide investment advice. Because of different investment objectives or other
factors, a particular security may be bought by HIMCO or Wellington Management
for one or more clients when one or more clients are selling the same security.
If purchases or sales of securities arise for consideration at or about the same
time for any Fund or client accounts (including other funds) for which HIMCO or
Wellington Management act as an investment adviser, (including the Funds
described herein) transactions in such securities will be made, insofar as
feasible, for the respective funds and other client accounts in a manner deemed
equitable to all. To the extent that transactions on behalf of more than one
client of HIMCO, Wellington Management or their respective affiliates during the
same period may increase the demand for securities being purchased or the supply
of securities being sold, there may be an adverse effect on price.
Each Fund has paid the following advisory fees based on a percentage
of assets:
<TABLE>
<CAPTION>
FUND NAME 1998 1997 1996(1)
- --------- ---- ---- -------
<S> <C> <C> <C>
Small Company Fund $ 435,779 $ 146,564 $ 14,746
Capital Appreciation Fund $4,745,355 $1,183,411 $ 18,419
MidCap Fund(2) $ 162,458 N/A N/A
International Opportunities Fund $ 367,845 $ 133,737 $ 12,988
Global Leaders Fund(4) $ 8,591 N/A N/A
Stock Fund $2,072,900 $ 316,618 $ 15,357
Growth and Income Fund(3) $ 43,952 N/A N/A
Dividend and Growth Fund $1,667,617 $ 326,978 $ 13,810
Advisers Fund $2,704,478 $ 675,902 $ 38,897
High Yield Fund(4) $ 22,100 N/A N/A
Bond Income Strategy Fund $ 365,863 $ 153,486 $ 30,076
Money Market Fund $ 192,694 $ 108,150 $ 22,884
</TABLE>
(1)From inception date (July 22, 1996) through December 31, 1996.
(2)From inception date (December 31, 1997) through December 31, 1998.
(3)From inception date (April 30, 1998) through December 31, 1998.
(4)From inception date (September 30, 1998) through December 31, 1998.
HIFSCO has voluntarily and temporarily agreed to limit the expenses of
each of the Funds by reimbursing each Fund when total fund expenses exceed the
following percentages:
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<PAGE> 141
<TABLE>
<CAPTION>
FUND NAME CLASS A CLASSES B & C
- --------- ------- -------------
<S> <C> <C>
Small Company Fund 1.45% 2.15%
Capital Appreciation Fund 1.45% 2.15%
MidCap Fund 1.45% 2.15%
Stock Fund 1.45% 2.15%
Growth and Income Fund 1.45% 2.15%
Dividend and Growth Fund 1.45% 2.15%
Advisers Fund 1.40% 2.10%
International Opportunities Fund 1.65% 2.35%
Global Leaders Fund 1.65% 2.35%
Bond Income Strategy Fund 1.25% 1.95%
Money Market Fund 1.00% 1.70%
</TABLE>
Pursuant to the investment management agreement, investment subadvisory
agreement and investment services agreement, neither HIFSCO, Wellington
Management nor HIMCO is liable to the Funds or their shareholders for any error
of judgment or mistake of law or for any loss suffered by the Funds in
connection with the matters to which their respective agreements relate, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of HIFSCO, HIMCO or Wellington Management in the performance of their
duties or from their reckless disregard of the obligations and duties under the
applicable agreement. Wellington Management has agreed to indemnify HIFSCO to
the fullest extent permitted by law against any and all loss, damage, judgment,
fines, amounts paid in settlement and attorneys' fees incurred by HIFSCO to the
extent resulting in whole or in part from any of Wellington Management's acts or
omissions related to the performance of its duties as set forth specifically in
the respective subadvisory investment agreement or otherwise from Wellington
Management's willful misfeasance, bad faith or gross negligence.
HIFSCO is principally located at 200 Hopmeadow Street, Simsbury
Connecticut 06070. As of December 31, 1998, HIFSCO had approximately $2.5
billion of assets under management. HIMCO is located at 55 Farmington Avenue,
Hartford, Connecticut 06105. As of December 31, 1998, HIMCO and its affiliates
had approximately $61.2 billion in assets under management. HIMCO is a
wholly-owned subsidiary, and HIFSCO is a majority-owned indirect subsidiary, of
The Hartford Financial Services Group, Inc.
Wellington Management Company, LLP, 75 State Street, Boston, MA 02109,
is a professional investment counseling firm that provides services to
investment companies, employee benefit plans, endowments, foundations and other
institutions and individuals. Wellington Management and its predecessor
organizations have provided investment advisory services since 1928. As of
December 31, 1998, Wellington Management had investment management authority
with respect to approximately $211 billion in assets. Wellington Management is a
Massachusetts limited liability partnership. The three managing partners of
Wellington Management are Robert W. Doran, Duncan M. McFarland and John R. Ryan.
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<PAGE> 142
The investment management agreement, investment subadvisory agreement
and investment services agreement continue in effect for two years from initial
approval and from year to year thereafter if approved annually by a vote of a
majority of the Directors of the Company including a majority of the Directors
who are not parties to an agreement or interested persons of any party to the
contract, cast in person at a meeting called for the purpose of voting on such
approval, or by holders of a majority of the applicable Fund's outstanding
voting securities. The contract automatically terminates upon assignment. The
investment management agreement may be terminated without penalty on 60 days'
notice at the option of either party to the respective contract or by vote of
the holders of a majority of the outstanding voting securities of the applicable
Fund. The investment subadvisory agreement may be terminated at any time without
the payment of any penalty by the Board of Directors or by vote of a majority of
the outstanding voting securities of the respective Fund, by HIFSCO upon written
notice to Wellington Management, and by Wellington Management upon 90 days'
written notice to HIFSCO (with respect to that Fund only). The investment
services agreement may be terminated at any time without the payment of any
penalty by the Board of Directors or by vote of a majority of the outstanding
voting securities of the respective Fund, by HIFSCO upon 60 days' notice to
HIMCO and by HIMCO upon 90 days' written notice to HIFSCO(with respect to that
Fund only). The subadvisory investment agreement and investment services
agreement terminate automatically upon the termination of the corresponding
investment advisory agreement.
FUND EXPENSES
EXPENSES OF THE FUNDS. Each Fund pays its own expenses including,
without limitation: (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Fund under the Investment Company Act, (iii)
auditing, accounting and legal expenses, (iv) taxes and interest, (v)
governmental fees, (vi) expenses of issue, sale, repurchase and redemption of
Fund shares, (vii) expenses of registering and qualifying the Fund and its
shares under federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker- dealer or
agent under state securities laws, (viii) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(ix) expenses of reports to governmental officers and commissions, (x) insurance
expenses, (xi) association membership dues, (xii) fees, expenses and
disbursements of custodians for all services to the Fund, (xiii) fees, expenses
and disbursements of transfer agents, dividend disbursing agents, shareholder
servicing agents and registrars for all services to the Fund, (xiv) expenses for
servicing shareholder accounts, (xv) any direct charges to shareholders approved
by the Directors of the Fund, (xvi) compensation and expenses of Directors of
the Fund who are not "interested persons" of the Fund, and (xvii) such
nonrecurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Fund to indemnify
its Directors and officers with respect thereto.
-31-
<PAGE> 143
DISTRIBUTION ARRANGEMENTS
Hartford Investment Financial Services Company ("HIFSCO") serves as the
principal underwriter for each Fund pursuant to an Underwriting Agreement
initially approved by the Board of Directors of the Company. HIFSCO is a
registered broker-dealer and member of the National Association of Securities
Dealers, Inc. (NASD). Shares of each Fund are continuously offered and sold by
selected broker-dealers who have executed selling agreements with HIFSCO. Except
as discussed below under Distribution Plans, HIFSCO bears all the expenses of
providing services pursuant to the Underwriting Agreement including the payment
of the expenses relating to the distribution of Prospectuses for sales purposes
as well as any advertising or sales literature. The Fund bears the expenses of
registering its shares with the SEC and qualifying them with state regulatory
authorities. The Underwriting Agreement continues in effect for two years from
initial approval and for successive one-year periods thereafter, provided that
each such continuance is specifically approved (i) by the vote of a majority of
the Directors of the Company, including a majority of the Directors who are not
parties to the Underwriting Agreement or interested persons of any such party,
(as the term interested person is defined in the 1940 Act); or (ii) by the vote
of a majority of the outstanding voting securities of a Fund. HIFSCO is not
obligated to sell any specific amount of shares of any Fund.
HIFSCO and its affiliates pay, out of their own assets, compensation to
brokers, financial institutions and other persons for the sale and distribution
of the Company's shares and/or for the servicing of those shares. These payments
("Additional Payments") are in addition to sales commissions reallowed to
dealers. These Additional Payments may take the form of "due diligence" payments
for a broker's examination of the Funds and payments for providing extra
employee training and information relating to the Funds; "listing" fees for the
placement of the Funds on a dealer's list of mutual funds available for purchase
by its customers; "finders" or "referral" fees for directing investors to the
Funds; "marketing support" fees for providing assistance in promoting the sale
of the Funds' shares; and payments for the sale of shares and/or the maintenance
of share balances. In addition, HIFSCO and its affiliates make Additional
Payments for subaccounting, administrative and/or shareholder processing
services that are in addition to the shareholder servicing and processing fees
paid by the Funds. The Additional Payments may be a fixed dollar amount, may be
based on the number of customer accounts maintained by a broker or financial
institution, or may be based on a percentage of the value of shares sold to, or
held by, customers of the brokers or financial institutions involved.
Furthermore, and subject to NASD regulations, HIFSCO and its affiliates may
contribute to various non-cash and cash incentive arrangements to promote the
sale of shares, as well as sponsor various educational programs, sales contests
and/or promotions in which participants may receive prizes such as travel
awards, merchandise and cash and/or investment research pertaining to particular
securities and other financial instruments or to the securities and financial
markets generally, educational information and related support materials and
hardware and/or software. HIFSCO and its affiliates may also pay for the travel
expenses, meals, lodging and entertainment of brokers or financial institutions
and their salespersons and guests in connection with education, sales and
promotional programs, subject to applicable NASD regulations. These programs,
which
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<PAGE> 144
may be different for different broker-dealers or financial institutions, will
not change the price an investor will pay for shares or the amount that a fund
will receive from such sale. For the fiscal year ended December 31, 1998, HIFSCO
or its affiliates paid $2,342,713 in connection with the above-referenced
programs.
The aggregate dollar amount of commissions received by the underwriter
for the sale of Class A and Class C shares for the last three fiscal years is as
follows:
<TABLE>
<CAPTION>
COMMISSIONS AMOUNT REALLOWED AMOUNT RETAINED
----------- ---------------- ---------------
<S> <C> <C> <C>
1998 $29,772,037 $25,849,631 $ 3,922,406
1997 $18,438,468 $15,995,514 $ 2,442,954
1996 $ 519,794 $ 473,590 $ 46,204
</TABLE>
Generally commissions are reallowed to broker-dealers as follows:
Small Company Fund, Capital Appreciation Fund, MidCap Fund, International
Opportunities Fund, Global Leaders Fund, Stock Fund, Growth and Income Fund,
Dividend and Growth Fund, and Advisers Fund.
<TABLE>
<CAPTION>
FRONT-END SALES FRONT-END SALES
CHARGE AS A CHARGE AS A COMMISSION AS
PERCENTAGE OF PERCENTAGE OF AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but less than $100,000 4.50% 4.71% 4.00%
$100,000 or more but less than $250,000 3.50% 3.63% 3.00%
$250,000 or more but less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but less than $1 2.00% 2.04% 1.75%
million
$1 million or more 0% 0% 0%
</TABLE>
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<PAGE> 145
The Bond Income Strategy Fund and High Yield Fund
<TABLE>
<CAPTION>
FRONT-END SALES FRONT-END SALES
CHARGE AS A CHARGE AS A COMMISSION AS
PERCENTAGE OF PERCENTAGE OF AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 3.75%
$50,000 or more but less than $100,000 4.00% 4.17% 3.50%
$100,000 or more but less than $250,000 3.50% 3.63% 3.00%
$250,000 or more but less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but less than $1 2.00% 2.04% 1.75%
million
$1 million or more 0% 0% 0%
</TABLE>
The Class A shares of the Money Market Fund do not collect an up-front
sales charge.
The distributor may pay up to the entire amount of the sales commission
to particular broker-dealers. The distributor may pay dealers of record
commissions on purchases over $1 million an amount up to the sum of 1.0% of the
first $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25% of share
purchases over $5 million. In addition, the distributor may provide compensation
to dealers of record for shares purchased without a sales charge.
The distributor pays commissions to dealers of up to 4% of the purchase
price of Class B shares purchased through dealers and pays commissions to
dealers of up to 2% of the purchase price of Class C shares purchased through
dealers.
HIFSCO's principal business address is 200 Hopmeadow Street, Simsbury,
Connecticut 06070. HIFSCO was organized as a Delaware Corporation on December 9,
1996 and is an indirect wholly-owned subsidiary of The Hartford.
DISTRIBUTION PLANS
The Company has adopted separate distribution plans (the "Plans") for
Class A, Class B and Class C shares of each Fund pursuant to appropriate
resolutions of the Company's Board of Directors in accordance with the
requirements of Rule 12b-1 under the 1940 Act and the requirements of the
applicable rule of the NASD regarding asset based sales charges.
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<PAGE> 146
CLASS A PLAN
Pursuant to the Class A Plan, a Fund may compensate HIFSCO for its
expenditures in financing any activity primarily intended to result in the sale
of Fund shares and for maintenance and personal service provided to existing
Class A shareholders. The expenses of a Fund pursuant to the Class A Plan are
accrued on a fiscal year basis and may not exceed, with respect to the Class A
shares of each Fund, the annual rate of 0.35% of the Fund's average daily net
assets attributable to Class A shares. Up to 0.25% of the fee may be used for
shareholder servicing expenses with the remainder used for distribution
expenses. All or any portion of this fee may be remitted to brokers who provide
distribution or shareholder account services.
CLASS B PLAN
Pursuant to the Class B Plan, a Fund may pay HIFSCO a fee of up to
1.00% of the average daily net assets attributable to Class B shares, 0.75% of
which is a fee for distribution financing activities and 0.25% of which is for
shareholder account services. All or any portion of such fees may be remitted to
brokers who assist in the distribution of Class B shares or provide maintenance
and personal services to existing Class B shareholders. HIFSCO will advance to
dealers the first-year service fee at a rate equal to 0.25% of the amount
invested. As compensation for such advance, HIFSCO may retain the service fee
paid by a Fund with respect to such shares for the first year after purchase.
Dealers will become eligible for additional service fees with respect to such
shares commencing in the thirteenth month following purchase. Brokers may from
time to time be required to meet certain other criteria in order to receive
service fees. HIFSCO or its affiliates are entitled to retain all service fees
payable under the Class B Plan for which there is no dealer of record or for
which qualification standards have not been met as partial consideration for
personal services and/or account maintenance services performed by HIFSCO or its
affiliates for shareholder accounts. The Class B Plan also provides that HIFSCO
will receive all contingent deferred sales charges attributable to Class B
shares.
CLASS C PLAN
Pursuant to the Class C Plan, a Fund may pay HIFSCO a fee of up to
1.00% of the average daily net assets attributable to Class C shares, 0.75% of
which is a fee for distribution financing activities and 0.25% of which is for
shareholder account services. All or any portion of such fees may be remitted to
brokers who assist in the distribution of Class C shares or provide maintenance
and personal services to existing Class C shareholders. HIFSCO will advance to
dealers the first-year service fee at a rate equal to 0.25% of the amount
invested. As compensation for such advance, HIFSCO may retain the service fee
paid by a Fund with respect to such shares for the first year after purchase.
Dealers will become eligible for additional service fees with respect to such
shares commencing in the thirteenth month following purchase. Brokers may from
time to time be required to meet certain other criteria in order to receive
service fees. HIFSCO or its affiliates are entitled to retain all service fees
payable under the Class C Plan for which there is no dealer of record or for
which qualification standards have not been met as partial
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<PAGE> 147
consideration for personal services and/or account maintenance services
performed by HIFSCO or its affiliates for shareholder accounts. The Class C Plan
also provides that HIFSCO will receive all contingent deferred sales charges
attributable to Class C shares.
GENERAL
Distribution fees paid to HIFSCO may be spent on any activities or
expenses primarily intended to result in the sale of the Company's shares
including (a) payment of initial and ongoing commissions and other payments to
brokers, dealers, financial institutions or others who sell each Fund's shares;
(b) compensation to employees of the Distributor; (c) compensation to and
expenses, including overhead such as communications and telephone, training,
supplies, photocopying and similar types of expenses, of HIFSCO incurred in the
printing and mailing or other dissemination of all prospectuses and statements
of additional information; (d) the costs of preparation, printing and mailing of
reports used for sales literature and related expenses, advertisements and other
distribution-related expenses (including personnel of HIFSCO) and for the
provision of personal service and/or the maintenance of shareholder accounts.
These plans are considered compensation type plans which means HIFSCO is paid
the agreed upon fee regardless of HIFSCO's expenditures.
In accordance with the terms of the Plans, HIFSCO provides to each
Fund, for review by the Company's Board of Directors, a quarterly written report
of the amounts expended under the respective Plans and the purpose for which
such expenditures were made. In the Board of Directors' quarterly review of the
Plans, they will review the level of compensation the Plans provide in
considering the continued appropriateness of the Plans.
The Plans were adopted by a majority vote of the Board of Directors,
including at least a majority of Directors who are not, and were not at the time
they voted, interested persons of the Fund as defined in the 1940 Act and do not
and did not have any direct or indirect financial interest in the operation of
the Plans, cast in person at a meeting called for the purpose of voting on the
Plans. In approving the Plans, the Directors identified and considered a number
of potential benefits which the Plans may provide including the potential to
increase assets in order to benefit from economics of scale. The Board of
Directors believes that there is a reasonable likelihood that the Plans will
benefit each Fund and its current and future shareholders. Under their terms,
the Plans remain in effect from year to year provided such continuance is
approved annually by vote of the Directors in the manner described above. The
Plans may not be amended to increase materially the amount to be spent for
distribution without approval of the shareholders of the Fund affected thereby,
and material amendments to the Plans must also be approved by the Board of
Directors in the manner described above. A Plan may be terminated at any time,
without payment of any penalty, by vote of the majority of the Directors who are
not interested persons of the Fund and have no direct or indirect financial
interest in the operations of the Plan, or by a vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Fund affected
thereby. A Plan will automatically terminate in the event of its assignment (as
defined in the 1940 Act).
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<PAGE> 148
For the fiscal year ended December 31, 1998, the funds paid the 12b-1
fees listed below. The entire amount of these 12b-1 fees were paid to
broker-dealers as compensation.
<TABLE>
<CAPTION>
FUND NAME CLASS A CLASS B CLASS C
--------- ------- ------- -------
<S> <C> <C> <C>
Small Company Fund $81,644 $132,611 $4,109
Capital Appreciation Fund $934,218 $2,510,428 $26,962
MidCap Fund $37,794 $44,472 $1,727
International Opportunities Fund $73,286 $96,685 $2,545
Global Leaders Fund(1) $2,171 $1,010 $1,031
Stock Fund $448,656 $969,066 $61,874
Growth and Income Fund(2) $10,854 $11,399 $5,325
Dividend and Growth Fund $387,546 $761,269 $17,876
Advisers Fund $561,759 $1,173,413 $89,821
High Yield Fund(2) $6,270 $4,466 $4,050
Bond Income Strategy Fund $110,637 $105,399 $10,233
Money Market Fund $82,074 $76,539 $3,705
</TABLE>
(1) From inception date (April 30, 1998) through December 31, 1998.
(2) From inception date (September 30, 1998) through December 31, 1998.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Company has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to any
policy established by the Board of Directors and HIFSCO, HIMCO and Wellington
Management are primarily responsible for the investment decisions of each Fund
and the placing of its portfolio transactions. In placing orders, it is the
policy of each Fund to obtain the most favorable net results, taking into
account various factors, including price, dealer spread or commission, if any,
size of the transaction and difficulty of execution. While HIMCO and Wellington
Management generally seek reasonably competitive spreads or commissions, the
Funds will not necessarily be paying the lowest possible spread or commission.
Upon instructions from the Funds, HIMCO and Wellington Management may direct
brokerage transactions to broker/dealers who also sell shares of the Funds.
HIMCO and Wellington Management will generally deal directly with the
dealers who make a market in the securities involved (unless better prices and
execution are available elsewhere) if the securities are traded primarily in the
over-the-counter market. Such dealers usually act as principals for their own
account. On occasion, securities may be purchased directly from the issuer.
Bonds and money market securities are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes. Portfolio
securities in the Money Market Fund normally are purchased directly from, or
sold directly to, the issuer, an underwriter or market maker for the securities.
There usually will be no brokerage commissions paid by the Money Market Fund for
such purchases or sales.
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<PAGE> 149
Each Fund has paid the following brokerage commissions:
<TABLE>
<CAPTION>
FUND NAME 1998 1997 1996(1)
- --------- ---- ---- -------
<S> <C> <C> <C>
Small Company Fund $258,125 $103,548 $8,264
Capital Appreciation Fund $1,918,244 $748,835 $20,709
MidCap Fund $69,953 N/A N/A
International Opportunities Fund $323,177 $111,809 $65,362
Global Leaders Fund(2) $8,170 N/A N/A
Stock Fund $438,905 $78,586 $4,039
Growth and Income Fund(3) $9,411 N/A N/A
Dividend and Growth Fund $384,710 $101,358 $5,471
Advisers Fund $319,625 $95,434 $6,412
High Yield Fund(2) N/A N/A N/A
Bond Income Strategy Fund N/A N/A N/A
Money Market Fund N/A N/A N/A
</TABLE>
(1) From inception date (July 22, 1996) through December 31,
1996.
(2) From inception date (September 30, 1998) through
December 31, 1998.
(3) From inception date (April 30, 1998) through December 31,
1998.
While HIMCO and Wellington Management (as applicable) seek to obtain
the most favorable net results in effecting transactions in a Fund's portfolio
securities, dealers who provide supplemental investment research to HIMCO or
Wellington Management may receive orders for transactions from HIMCO or
Wellington Management. Such supplemental research services ordinarily consist of
assessments and analyses of the business or prospects of a company, industry, or
economic sector. If, in the judgment of HIMCO or Wellington Management, a Fund
will be benefited by such supplemental research services, HIMCO and Wellington
Management are authorized to pay spreads or commissions to brokers or dealers
furnishing such services which are in excess of spreads or commissions which
another broker or dealer may charge for the same transaction. Information so
received will be in addition to and not in lieu of the services required to be
performed by HIMCO and Wellington Management under the investment advisory
agreement or the sub-investment advisory agreement. The expenses of HIMCO and
Wellington Management will not necessarily be reduced as a result of the receipt
of such supplemental information. HIMCO and Wellington Management may use such
supplemental research in providing investment advice to portfolios other than
those for which the transactions are made. Similarly, the Funds may benefit from
such research obtained by HIMCO and Wellington Management for portfolio
transactions for other clients.
Investment decisions for the Funds will be made independently from
those of any other clients that may be (or in the future may be) managed by
HIMCO, Wellington Management or their affiliates. If, however, accounts managed
by HIMCO or Wellington Management are simultaneously engaged in the purchase of
the same security, then, pursuant to general authorization of the Company's
Board of Directors, available securities may be allocated to each Fund or other
client account and may be averaged as to price in whatever manner HIMCO or
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<PAGE> 150
Wellington Management deems to be fair. Such allocation and pricing may affect
the amount of brokerage commissions paid by each Fund. In some cases, this
system might adversely affect the price paid by a Fund (for example, during
periods of rapidly rising or falling interest rates) or limit the size of the
position obtainable for a Fund (for example, in the case of a small issue).
Although the rules of the National Association of Securities Dealers,
Inc. prohibit its members from seeking orders for the execution of investment
company portfolio transactions on the basis of their sales of investment company
shares, under such rules, sales of investment company shares may be considered
in selecting brokers to effect portfolio transactions. Accordingly, some
portfolio transactions are, subject to such rules and to obtaining best prices
and executions, effected through dealers who sell shares of the funds.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of each Fund is determined by
Hartford Life Insurance Company, ("Hartford Life") an affiliate of The Hartford,
in the manner described in the Funds' Prospectus. The Funds will be closed for
business and will not price their shares on the following business holidays: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and other holidays
observed by the New York Stock Exchange. Securities held by each Fund other than
the Money Market Fund will be valued as follows: Debt securities (other than
short-term obligations) are valued on the basis of valuations furnished by an
unaffiliated pricing service which determines valuations for normal
institutional size trading units of debt securities. Short-term securities held
in the Money Market Fund are valued at amortized cost or original cost plus
accrued interest receivable, both of which approximate market value. All other
Funds' short-term investments with a maturity of 60 days or less when purchased
are valued at amortized cost, which approximates market value. Short-term
investments with a maturity of more than 60 days when purchased are valued based
on market quotations until the remaining days to maturity become less than 61
days. From such time until maturity, the investments are valued at amortized
cost.
Equity securities are valued at the last sales price reported on
principal securities exchanges (domestic or foreign). If no sale took place on
such day and in the case of certain equity securities traded over-the-counter,
then such securities are valued at the mean between the bid and asked prices.
Securities quoted in foreign currencies are translated into U.S. dollars at the
exchange rate at the end of the reporting period. Options are valued at the last
sales price; if no sale took place on such day, then options are valued at the
mean between the bid and asked prices. Securities for which market quotations
are not readily available and all other assets are valued in good faith at fair
value by, or under guidelines established by, the Funds' Board of Directors.
The net asset value per share of the Money Market Fund is determined by
using the amortized cost method of valuing its portfolio instruments. Under the
amortized cost method of valuation, an instrument is valued at cost and the
interest payable at maturity upon the instrument
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<PAGE> 151
is accrued as income, on a daily basis, over the remaining life of the
instrument. Neither the amount of daily income nor the net asset value is
affected by unrealized appreciation or depreciation of the portfolio's
investments assuming the instrument's obligation is paid in full on maturity. In
periods of declining interest rates, the indicated daily yield on shares of the
portfolio computed using amortized cost may tend to be higher than a similar
computation made using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the indicated daily yield on
shares of the portfolio computed using amortized cost may tend to be lower than
a similar computation made using a method of valuation based upon market prices
and estimates. For all Funds, securities with remaining maturities of less than
60 days are valued at amortized cost, which approximates market value.
The amortized cost method of valuation permits the Money Market Fund to
maintain a stable $1.00 net asset value per share. The Company's Board of
Directors periodically reviews the extent of any deviation from the $1.00 per
share value that would occur if a method of valuation based on market prices and
estimates were used. In the event such a deviation would exceed one-half of one
percent, the Board of Directors will promptly consider any action that
reasonably should be initiated to eliminate or reduce material dilution or other
unfair results to shareholders. Such action may include selling portfolio
securities prior to maturity, not declaring earned income dividends, valuing
portfolio securities on the basis of current market prices, if available, or, if
not available, at fair market value as determined in good faith by the Board of
Directors, and (considered highly unlikely by management of the Company)
redemption of shares in kind (i.e., portfolio securities).
A Fund's maximum offering price per Class A share is determined by
adding the maximum sales charge to the net asset value per share. A Fund's
offering price per Class C share is determined by adding the initial sales
charge to the net asset value per share. Class B, Class Y shares and the Class A
shares of the Money Market Fund are offered at net asset value without the
imposition of an initial sales charge.
PURCHASE AND REDEMPTION OF SHARES
For information regarding the purchase of Fund shares, see "About Your
Account -- Buying Shares" in the Funds' Prospectus.
For a description of how a shareholder may have a Fund redeem his/her
shares, or how he/she may sell shares, see "About Your Account -- Selling
Shares" in the Funds' Prospectus.
RIGHTS OF ACCUMULATION. Each Fund offers to all qualifying investors
Rights of Accumulation under which investors are permitted to purchase Class A
shares of any Funds of the Company at the price applicable to the total of (a)
the dollar amount then being purchased plus (b) an amount equal to the then
current net asset value of the purchaser's holdings of all shares of any Funds
of the Company and the current account value of the Director variable annuity or
variable life contracts issued by affiliates of The Hartford. For purposes of
the rights of accumulation
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<PAGE> 152
program, the purchaser may include all shares owned by family members. A family
member is a spouse, parent, grandparent, child, grandchild, brother, sister,
step-family members and in-laws. Acceptance of the purchase order is subject to
confirmation of qualification. The rights of accumulation may be amended or
terminated at any time as to subsequent purchases. The Transfer Agent must be
notified by you or your broker each time a qualifying purchase is made.
LETTER OF INTENT. Any person may qualify for a reduced sales charge on
purchases of Class A shares made within a thirteen-month period pursuant to a
Letter of Intent (LOI). Class A shares acquired through the reinvestment of
distributions do not constitute purchases for purposes of the LOI. A Class A
shareholder may include, as an accumulation credit towards the completion of
such LOI, the value of all shares of all Funds of the Company owned by the
shareholder. Such value is determined based on the public offering price on the
date of the LOI. During the term of an LOI, Boston Financial Data Services, Inc.
("BFDS"), the Company's transfer agent will hold shares in escrow to secure
payment of the higher sales charge applicable for shares actually purchased if
the indicated amount on the LOI is not purchased. Dividends and capital gains
will be paid on all escrowed shares and these shares will be released when the
amount indicated on the LOI has been purchased. An LOI does not obligate the
investor to buy or the Fund to sell the indicated amount of the LOI. If a Class
A shareholder exceeds the specified amount of the LOI and reaches an amount
which would qualify for a further quantity discount, a retroactive price
adjustment will be made at the time of the expiration of the LOI. The resulting
difference in offering price will purchase additional Class A shares for the
shareholder's account at the applicable offering price. If the specified amount
of the LOI is not purchased, the shareholder shall remit to BFDS an amount equal
to the difference between the sales charge paid and the sales charge that would
have been paid had the aggregate purchases been made at a single time. If the
Class A shareholder does not within twenty days after a written request by BFDS
pay such difference in sales charge, BFDS will redeem an appropriate number of
escrowed shares in order to realize such difference. The Letter of Intent may be
backdated up to 90 days. Additional information about the terms of the Letter of
Intent are available from your registered representative or from BFDS at
1-888-843-7824.
SYSTEMATIC WITHDRAWAL PLAN. The Systematic Withdrawal Plan ("SWP") is
designed to provide a convenient method of receiving fixed payments at regular
intervals only from Class A shares and Money Market Fund shares not subject to a
CDSC (except as noted below) of a Fund deposited by the applicant under this
SWP. The applicant must deposit or purchase for deposit shares of the Fund
having a total value of not less than $5,000. Periodic checks of $50 per Fund or
more will be sent to the applicant, or any person designated by him, monthly or
quarterly. SWP's for Class B and Class C shares of a Fund and any Money Market
Fund shares subject to a CDSC are permitted only for redemptions limited to no
more than 12% of the original value of the account per year.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
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<PAGE> 153
SWP payments are made from the proceeds of the redemption of shares
deposited in a SWP account. Redemptions are potentially taxable transactions to
shareholders. To the extent that such redemptions for periodic withdrawals
exceed dividend income reinvested in the SWP account, such redemptions will
reduce and may ultimately exhaust the number of shares deposited in the SWP
account. In addition, the amounts received by a shareholder cannot be considered
as an actual yield or income on his or her investment because part of such
payments may be a return of his or her capital.
The SWP may be terminated at any time (1) by written notice to the Fund
or from the Fund to the shareholder; (2) upon receipt by the Fund of appropriate
evidence of the shareholder's death; or (3) when all shares under the SWP have
been redeemed. The fees of the Fund for maintaining SWPs are paid by the Fund.
Special Redemptions. Although it would not normally do so, each Fund
has the right to pay the redemption price of shares of the Fund in whole or in
part in portfolio securities as prescribed by the Directors. When the
shareholder sells portfolio securities received in this fashion, he would incur
a brokerage charge. Any such securities would be valued for the purposes of
making such payment at the same value as used in determining net asset value.
The Funds have elected to be governed by Rule 18f-1 under the 1940 Act, pursuant
to which each Fund is obligated to redeem shares solely in cash up to the lesser
of $250,000 or 1% of the net asset value of the applicable Fund during any 90
day period for any one account.
DEFERRED SALES CHARGE ON CLASS B AND CLASS C SHARES
Investments in Class B and Class C shares are purchased at net asset
value per share without the imposition of an initial sales charge so that the
Fund will receive the full amount of the purchase payment.
Class B and Class C shares which are redeemed within six years or one
year of purchase, respectively, will be subject to a CDSC at the rates set forth
in the Prospectus as a percentage of the dollar amount subject to the CDSC. The
charge will be assessed on an amount equal to the lesser of the current market
value or the original purchase cost of the Class B or Class C shares being
redeemed. No CDSC will be imposed on increases in account value above the
initial purchase prices, including all shares derived from reinvestment of
dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of
years from the time of payment for the purchase of Class B shares until the time
of redemption of such shares. Solely for purposes of determining this number of
years from the time of any payment for the purchases of both Class B and Class C
shares, all payments during a month will be aggregated and deemed to have been
made on the first day of the month.
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<PAGE> 154
In determining whether a CDSC applies to a redemption, the calculation
will be determined in a manner that results in the lowest possible rate being
charged. It will be assumed that your redemption comes first from shares you
have held beyond the six-year CDSC redemption period for Class B or one year
CDSC redemption period for Class C, or those you acquired through dividend and
capital gain reinvestment, and next from the shares you have held the longest
during the six-year period for Class B shares. For this purpose, the amount of
any increase in a share's value above its initial purchase price is not regarded
as a share exempt from CDSC. Thus, when a share that has appreciated in value is
redeemed during the CDSC period, a CDSC is assessed only on its initial purchase
price.
When requesting a redemption for a specific dollar amount, please
indicate if you require the proceeds to equal the dollar amount requested. If
not indicated, only the specified dollar amount will be redeemed from your
account and the proceeds will be less any applicable CDSC.
Example:
You have purchased 100 shares at $10 per share. The second year after
your purchase, your investment's net asset value per share has increased by $2
to $12, and you have gained 10 additional shares through dividend reinvestment.
If you redeem 50 shares at this time your CDSC will be calculated as follows:
<TABLE>
<CAPTION>
<S> <C>
Proceeds of 50 shares redeemed at $12 per shares (50 x 12) $600.00
*Minus Appreciation ($12 - $10) x 100 shares (200.00)
Minus proceeds of 10 shares not subject to CDSC (dividend reinvestment) (120.00)
--------
Amount subject to CDSC $280.00
</TABLE>
*The appreciation is based on all 100 shares in the lot not just the
shares being redeemed.
Proceeds from the CDSC are paid to the distributor and are used in
whole or in part by the Funds to defray its expenses related to providing
distribution-related services to the Fund in connection with the sale of the
Class B and Class C shares, such as the payment of compensation to select
selling brokers for selling Class B and Class C shares. The combination of the
CDSC and the distribution and service fees facilitates the ability of the Fund
to sell the Class B and Class C shares without a sales charge being deducted at
the time of the purchase.
The CDSC will be waived on redemptions of Class B and Class C shares
and of Class A shares that are subject to CDSC, unless indicated otherwise, as
described in the prospectus.
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<PAGE> 155
SUSPENSION OF REDEMPTIONS
A Fund may not suspend a shareholder's right of redemption, or postpone
payment for a redemption for more than seven days, unless the New York Stock
Exchange (NYSE) is closed for other than customary weekends or holidays, or
trading on the NYSE is restricted, or for any period during which an emergency
exists as a result of which (1) disposal by a Fund of securities owned by it is
not reasonably practicable, or (2) it is not reasonably practicable for a Fund
to fairly determine the value of its assets, or for such other periods as the
Securities and Exchange Commission may permit for the protection of investors.
INVESTMENT PERFORMANCE
MONEY MARKET FUND
In accordance with regulations prescribed by the SEC, the Company is
required to compute the Money Market Fund's current annualized yield for a
seven-day period in a manner which does not take into consideration any realized
or unrealized gains or losses on its portfolio securities. This current
annualized yield is computed by determining the net change (exclusive of
realized gains and losses on the sale of securities and unrealized appreciation
and depreciation) in the value of a hypothetical account having a balance of one
share of the Money Market Fund at the beginning of such seven-day period,
dividing such net change in account value by the value of the account at the
beginning of the period to determine the base period return and annualizing this
quotient on a 365-day basis.
The SEC also permits the Company to disclose the effective yield of the
Money Market Fund for the same seven-day period, determined on a compounded
basis. The effective yield is calculated by compounding the unannualized base
period return by adding one to the base period return, raising the sum to a
power equal to 365 divided by 7, and subtracting one from the result.
For the seven-day period ending December 31, 1998, the Money Market
Fund's annualized yield for Class A, Class B, Class C and Class Y shares was
4.26%, 3.57%, 3.54% and 4.72% respectively. For the same period, the effective
yield for Class A, Class B, Class C and Class Y shares was 4.35%, 3.63%, 3.61%
and 4.83% respectively.
The yield on amounts held in the Money Market Fund normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Money Market Fund's actual yield is affected by changes in interest
rates on money market securities, average portfolio maturity of the Money Market
Fund, the types and quality of portfolio securities held by the Money Market
Fund, and its operating expenses.
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<PAGE> 156
OTHER FUNDS
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS. Average annual
total return quotations for Class A, Class B, Class C and Class Y shares are
computed by finding the average annual compounded rates of return that would
cause a hypothetical investment made on the first day of a designated period to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)(n) = ERV
<TABLE>
<CAPTION>
Where:
<S> <C> <C> <C> <C> <C>
P = a hypothetical initial payment of (n) = number of years
$1,000, less the maximum sales load
applicable to a Fund ERV = ending redeemable value of the
hypothetical $1,000 initial payment
T = average annual total return made at the beginning of the
designated period (or fractional
portion thereof)
</TABLE>
The computation above assumes that all dividends and distributions made
by a Fund are reinvested at net asset value during the designated period. The
average annual total return quotation is determined to the nearest 1/100 of 1%.
One of the primary methods used to measure performance is "total
return." "Total return" will normally represent the percentage change in value
of a class of a Fund, or of a hypothetical investment in a class of a Fund, over
any period up to the lifetime of the class. Unless otherwise indicated, total
return calculations will assume the deduction of the maximum sales charge and
usually assume the reinvestment of all dividends and capital gains distributions
and will be expressed as a percentage increase or decrease from an initial
value, for the entire period or for one or more specified periods within the
entire period. Total return calculations that do not reflect the reduction of
sales charges will be higher than those that do reflect such charges.
Total return percentages for periods longer than one year will usually
be accompanied by total return percentages for each year within the period
and/or by the average annual compounded total return for the period. The income
and capital components of a given return may be separated and portrayed in a
variety of ways in order to illustrate their relative significance. Performance
may also be portrayed in terms of cash or investment values, without
percentages. Past performance cannot guarantee any particular future result. In
determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts are taken
into consideration. For any account fees that vary with the size of the account,
the account fee used for purposes of the above computation is assumed to be the
fee that would be charged to the mean account size of a class of the Fund.
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<PAGE> 157
Each Fund's average annual total return quotations and yield quotations
as they may appear in the Prospectus, this SAI or in advertising are calculated
by standard methods prescribed by the SEC.
The charts below set forth certain performance information as of
December 31, 1998 for the Class A, Class B, Class C and Class Y shares of each
Fund, except as noted, which is adjusted to reflect the maximum sales charge and
the account fees of each Class. Past performance is no guarantee and is not
necessarily indicative of future performance of the shares. The actual annual
returns for the shares may vary significantly from the past and future
performance. Investment returns and the value of the shares will fluctuate in
response to market and economic conditions as well as other factors and shares,
when redeemed, may be worth more or less than their original cost. Total returns
are based on capital changes plus reinvestment of all distributions for the time
periods noted in the charts below. Total return of the shares would have been
lower without the expense limitation effected by HIFSCO.
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Small Company Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 10.46% 4.38% 18.16% 15.46%
Class B Shares 9.73% 4.73% 17.39% 16.41%
Class C Shares 9.82% 7.72% 17.43% 16.94%
Class Y Shares 11.05% N/A 18.71% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Capital Appreciation Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 3.26% -2.42% 38.24% 35.07%
Class B Shares 2.52% -2.48% 37.32% 36.54%
Class C Shares 2.59% 0.56% 37.36% 36.79%
Class Y Shares 3.68% N/A 38.88% N/A
</TABLE>
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<PAGE> 158
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the MidCap Fund
(Date of Inception: Class A, Class B and Class Y Shares, December 31, 1997;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 23.12% 16.35% 22.93% 16.19%
Class B Shares 22.32% 17.32% 22.13% 18.15%
Class C Shares 22.30% 20.08% 22.11% 20.90%
Class Y Shares 23.62% N/A 23.43% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the International Opportunities
Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 12.53% 6.34% 8.74% 6.25%
Class B Shares 11.82% 6.82% 8.02% 6.91%
Class C Shares 11.87% 9.75% 8.04% 7.60%
Class Y Shares 13.11% N/A 9.26% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Global Leaders Fund
(Date of Inception: September 30, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares N/A N/A 30.36% 23.19%
Class B Shares N/A N/A 30.16% 25.16%
Class C Shares N/A N/A 30.16% 27.86%
Class Y Shares N/A N/A 30.57% N/A
</TABLE>
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<PAGE> 159
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Stock Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Share, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 31.33% 24.11% 32.77% 29.73%
Class B Shares 30.38% 25.38% 31.84% 31.01%
Class C Shares 30.32% 28.02% 31.81% 31.27%
Class Y Shares 31.80% N/A 33.33% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Growth and Income Fund
(Date of Inception: Class A, Class B and Class Y Shares, April 30, 1998;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares N/A N/A 14.78% 8.47%
Class B Shares N/A N/A 14.21% 9.21%
Class C Shares N/A N/A 14.27% 12.13%
Class Y Shares N/A N/A 15.18% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Dividend and Growth Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 14.47% 8.17% 25.11% 22.24%
Class B Shares 13.62% 8.62% 24.21% 23.31%
Class C Shares 13.72% 11.58% 24.25% 23.74%
Class Y Shares 14.86% N/A 25.60% N/A
</TABLE>
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<PAGE> 160
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Advisers Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 21.09% 14.43% 23.22% 20.40%
Class B Shares 20.27% 15.27% 22.40% 21.48%
Class C Shares 20.15% 17.95% 22.35% 21.85%
Class Y Shares 21.62% N/A 23.78% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the High Yield Fund
(Date of Inception: September 30, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares N/A N/A 3.33% -1.32%
Class B Shares N/A N/A 3.09% -1.91%
Class C Shares N/A N/A 3.08% 1.05%
Class Y Shares N/A N/A 3.51% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Bond Income Strategy Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 7.48% 2.64% 9.89% 7.84%
Class B Shares 6.70% 1.70% 9.07% 7.98%
Class C Shares 6.74% 4.67% 9.09% 8.65%
Class Y Shares 7.98% N/A 10.39% N/A
</TABLE>
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<PAGE> 161
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B and Class Y Shares of the Money Market Fund
(Date of Inception: Class A and Class Y Shares, July 22, 1996;
Class B Shares, August 22, 1997;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
Total Return Total Return Total Return Total Return
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares 4.69% 4.69% 4.69% 4.69%
Class B Shares 3.97% -1.03% 4.00% 1.09%
Class C Shares 3.94% 1.90% 3.98% 3.22%
Class Y Shares 5.16% N/A 5.23% N/A
</TABLE>
Each Fund may also publish its distribution rate and/or its effective
distribution rate. A Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized, by the current net asset value
per share. A Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the most recent monthly
distribution and reinvesting the resulting amount for a full year on the basis
of such ratio. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
A Fund's yield is calculated using a standardized formula, the income component
of which is computed from the yields to maturity of all debt obligations held by
the Fund based on prescribed methods (with all purchases and sales of securities
during such period included in the income calculation on a settlement date
basis), whereas the distribution rate is based on a Fund's last monthly
distribution. A Fund's monthly distribution tends to be relatively stable and
may be more or less than the amount of net investment income and short-term
capital gain actually earned by the Fund during the month (see "Dividends,
Capital Gains and Taxes" in the Funds' Prospectus).
Other data that may be advertised or published about each Fund include
the average portfolio quality, the average portfolio maturity and the average
portfolio duration.
STANDARDIZED YIELD QUOTATIONS. The yield of a class is computed by
dividing the class's net investment income per share during a base period of 30
days, or one month, by the maximum offering price per share of the class on the
last day of such base period in accordance with the following formula:
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<PAGE> 162
2[(a-b) + 1)6 - 1]
-----
cd
<TABLE>
<CAPTION>
Where:
<S> <C> <C> <C> <C> <C>
a = net investment income earned during c = the average daily number of shares of
the period attributable to the subject the subject class outstanding during
class the period that were entitled to
b = net expenses accrued for the period receive dividends
attributable to the subject class d = the maximum offering price per share
of the subject
</TABLE>
Net investment income will be determined in accordance with rules
established by the SEC. The price per share of Class A shares will include the
maximum sales charge imposed on purchases of Class A shares which decreases with
the amount of shares purchased, and the price per share of Class C shares will
include the sales charge imposed on purchases of Class C shares.
For the thirty-day period ended December 31, 1998, the Bond Income
Strategy Fund's 30-day yield for Class A, Class B, Class C and Class Y was
4.63%, 4.15%, 4.11% and 5.30%respectively. For that same period, the 30-day
yield for the Class A, Class B, Class C and Class Y shares of the High Yield
Fund was 7.33%, 6.96%, 6.90% and 8.14% respectively.
NON-STANDARDIZED PERFORMANCE. In addition, in order to more completely
represent a Fund's performance or more accurately compare such performance to
other measures of investment return, a Fund also may include in advertisements,
sales literature and shareholder reports other total return performance data
("Non-Standardized Return"). Non-Standardized Return may be quoted for the same
or different periods as those for which Standardized Return is quoted; it may
consist of an aggregate or average annual percentage rate of return, actual
year-by-year rates or any combination thereof. Non-Standardized Return may or
may not take sales charges into account; performance data calculated without
taking the effect of sales charges into account will be higher than data
including the effect of such charges. All non-standardized performance will be
advertised only if the standard performance data for the same period, as well as
for the required periods, is also presented.
GENERAL INFORMATION. From time to time, the Funds may advertise their
performance compared to similar funds using certain unmanaged indices, reporting
services and publications. Descriptions of some of the indices which may be used
are listed below.
The Standard & Poor's MidCap 400 Index is designed to represent price
movements in the mid cap U.S. equity market. It contains companies chosen by the
Standard & Poors Index Committee for their size, liquidity and industry
representation. None of the companies in the S&P 400 overlap with those in the
S&P 500 Index or the S&P 600 Index. Decisions about stocks to be included and
deleted are made by the Committee which meets on a regular basis. S&P 400
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<PAGE> 163
stocks are market cap weighted; each stock influences the Index in proportion to
its relative market cap. REITs are not eligible for inclusion.
The Standard & Poor's 500 Composite Stock Price Index is a well
diversified list of 500 companies representing the U.S. Stock Market.
The Standard and Poor's Small Cap 600 index is designed to represent
price movements in the small cap U.S. equity market. It contains companies
chosen by the Standard & Poors Index Committee for their size, industry
characteristics, and liquidity. None of the companies in the S&P 600 overlap
with the S&P 500 or the S&P 400 (MidCap Index). The S&P 600 is weighted by
market capitalization. REITs are not eligible for inclusion.
The NASDAQ Composite OTC Price Index is a market value-weighted and
unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks.
The Lehman Government Bond Index is a measure of the market value of
all public obligations of the U.S. Treasury; all publicly issued debt of all
agencies of the U.S. Government and all quasi-federal corporations; and all
corporate debt guaranteed by the U.S. Government. Mortgage backed securities,
bonds and foreign targeted issues are not included in the Lehman Government
Index.
The Lehman Government/Corporate Bond Index is a measure of the market
value of approximately 5,300 bonds with a face value currently in excess of $1.3
trillion. To be included in the Lehman Government/Corporate Index, an issue must
have amounts outstanding in excess of $1 million, have at least one year to
maturity and be rated "Baa" or higher ("investment grade") by a nationally
recognized rating agency.
The Russell 2000 Index represents the bottom two thirds of the largest
3000 publicly traded companies domiciled in the U.S. Russell uses total market
capitalization to sort its universe to determine the companies that are included
in the Index. Only common stocks are included in the Index. REITs are eligible
for inclusion.
The Russell 2500 Index is a market value-weighted, unmanaged index
showing total return (i.e., principal changes with income) in the aggregate
market value of 2,500 stocks of publicly traded companies domiciled in the
United States. The Index includes stocks traded on the New York Stock Exchange
and the American Stock Exchange as well as in the over-the-counter market.
The Morgan Stanley Capital International EAFE Index (the "EAFE Index")
is an unmanaged index, which includes over 1,000 companies representing the
stock markets of Europe, Australia, New Zealand and the Far East. The EAFE Index
is typically shown weighted by the market capitalization. However, EAFE is also
available weighted by Gross Domestic Product (GDP). These weights are modified
on July 1st of each year to reflect the prior year's
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<PAGE> 164
GDP. Indices with dividends reinvested constitute an estimate of total return
arrived at by reinvesting one twelfth of the month end yield at every month end.
The series with net dividends reinvested take into account those dividends net
of withholding taxes retained at the source of payment.
The Lehman Brothers High Yield BB Index is a measure of the market
value of public debt issues with a minimum par value of $100 million and rated
Ba1-Ba3 by Moody's. All bonds within the index are U.S. dollar denominated,
non-convertible and have at least one year remaining to maturity.
In addition, from time to time in reports and promotions: (1) a Fund's
performance may be compared to other groups of mutual funds tracked by: (a)
Lipper Analytical Services, a widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets; (b)
Morningstar, Inc., another widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets; or (c)
other financial or business publications, such as Business Week, Money Magazine,
Forbes and Barron's which provide similar information; (2) the Consumer Price
Index (measure for inflation) may be used to assess the real rate of return from
an investment in the Fund; (3) other statistics such as GNP, and net import and
export figures derived form governmental publications, e.g., The Survey of
Current Business or other independent parties, e.g., the Investment Company
Institute, may be used to illustrate investment attributes to the Fund or the
general economic, business, investment, or financial environment in which the
Fund operates; (4) various financial, economic and market statistics developed
by brokers, dealers and other persons may be used to illustrate aspects of the
Fund's performance; (5) the effect of tax-deferred compounding on the Fund's
investment returns, or on returns in general, may be illustrated by graphs,
charts, etc. where such graphs or charts would compare, at various points in
time, the return from an investment in the Fund (or returns in general) on a
tax-deferred basis (assuming reinvestment of capital gains and dividends and
assuming one or more tax rates) with the return on a taxable basis; and (6) the
sectors or industries in which the Fund invests may be compared to relevant
indices or surveys (e.g., S&P Industry Surveys) in order to evaluate the Fund's
historical performance or current or potential value with respect to the
particular industry or sector.
Each Fund's investment performance may be advertised in various
financial publications, newspapers, magazines including the following:
<TABLE>
<CAPTION>
<S> <C> <C>
Across the Board Associated Press Business Month
Advertising Age Barron's Business Marketing
Adviser's Magazine Best's Review Business Daily
Adweek Bloomberg Business Insurance
Agent Broker World California Broker
American Banker Business Week Changing Times
American Agent and Business Wire Consumer Reports
Broker Business News Features Consumer Digest
</TABLE>
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<PAGE> 165
<TABLE>
<CAPTION>
<S> <C> <C>
Crain's Investment Advisor Pensions & Investments
Dow Jones News Service Journal of Commerce Professional Insurance
Economist Journal of Accountancy Agents
Entrepreneur Journal of the American Professional Agent
Entrepreneurial Woman Society of CLU & ChFC Registered Representative
Financial Services Week Kiplinger's Personal Reuter's
Financial World Finance Rough Notes
Financial Planning Knight-Ridder Round the Table
Financial Times Life Association News Service
Forbes Life Insurance Selling Success
Fortune Life Times The Standard
Hartford Courant LIMRA's MarketFacts The Boston Globe
Inc Lipper Analytical Services, The Washington Post
Independent Business Inc. Tillinghast
Institutional Investor MarketFacts Time
Insurance Forum Medical Economics U.S. News & World
Insurance Advocate Money Report
Independent Morningstar, Inc. U.S. Banker
Insurance Review Nation's Business United Press International
Investor's National Underwriter USA Today
Insurance Times New Choices (formerly 50 Value Line
Insurance Week Plus) Wall Street Journal
Insurance Product News New England Business Wiesenberger Investment
Insurance Sales New York Times Working Woman
Investment Dealers Digest Pension World
</TABLE>
From time to time the Company may publish the sales of shares of one or
more of the Funds on a gross or net basis and for various periods of time, and
compare such sales with sales similarly reported by other investment companies.
TAXES
Each Fund is treated as a separate entity for accounting and tax
purposes. Each Fund has qualified and elected or intends to qualify and elect to
be treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), and intends to continue
to so qualify in the future. As such and by complying with the applicable
provisions of the Code regarding the sources of its income, the timing of its
distributions, and the diversification of its assets, each Fund will not be
subject to federal income tax on taxable income (including net short-term and
long-term capital gains) which is distributed to shareholders at least annually
in accordance with the timing requirements of the Code.
Each Fund will be subject to a 4% non-deductible federal excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with
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<PAGE> 166
annual minimum distribution requirements. Each Fund intends under normal
circumstances to avoid liability for such tax by satisfying such distribution
requirements.
If a Fund acquires stock in certain non-U.S. corporations that receive
at least 75% of their annual gross income from passive sources (such as
interest, dividends, rents, royalties or capital gain) or hold at least 50% of
their assets in investments producing such passive income ("passive foreign
investment companies"), that Fund could be subject to federal income tax and
additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Fund is timely distributed to its shareholders.
The Fund would not be able to pass through to its shareholders any credit or
deduction for such a tax. Certain elections may, if available, ameliorate these
adverse tax consequences, but any such election would require the applicable
Fund to recognize taxable income or gain without the concurrent receipt of cash.
Any Fund that is permitted to acquire stock in foreign corporations may limit
and/or manage its holdings in passive foreign investment companies to minimize
its tax liability or maximize its return from these investments.
Foreign exchange gains and losses realized by a Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain foreign currency futures and options, foreign currency forward
contracts, foreign currencies, or payables or receivables denominated in a
foreign currency are subject to Section 988 of the Code, which generally causes
such gains and losses to be treated as ordinary income and losses and may affect
the amount, timing and character of distributions to shareholders. Any such
transactions that are not directly related to a Fund's investment in stock or
securities, possibly including speculative currency positions or currency
derivatives not used for hedging purposes could, under future Treasury
regulations, produce income not among the types of "qualifying income" from
which the Fund must derive at least 90% of its annual gross income.
Some Funds may be subject to withholding and other taxes imposed by
foreign countries with respect to their investments in foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. If qualified, a fund may elect to pass through such foreign taxes and any
associated tax deductions or credits to their shareholders, who therefore
generally will report such amounts on their own tax returns.
For Federal income tax purposes, each Fund is permitted to carry
forward a net capital loss in any year to offset its own capital gains, if any,
during the eight years following the year of the loss. To the extent subsequent
capital gains are offset by such losses, they would not result in federal income
tax liability to the applicable Fund and would not be distributed as such to
shareholders.
Each Fund that invests in certain PIKs, zero coupon securities or
certain deferred interest securities (and, in general, any other securities with
original issue discount or with market discount if the Fund elects to include
market discount in income currently) must accrue income on such investments
prior to the receipt of the corresponding cash payments. However, each Fund
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<PAGE> 167
must distribute, at least annually, all or substantially all of its net income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid federal income and excise taxes.
Therefore, a Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.
Investment in debt obligations that are at risk of or in default
presents special tax issues for any Fund that may hold such obligations. Tax
rules are not entirely clear about issues such as when the Fund may cease to
accrue interest, original issue discount, or market discount, when and to what
extent deductions may be taken for bad debts or worthless securities, how
payments received on obligations in default should be allocated between
principal and income, and whether exchanges of debt obligations in a workout
context are taxable. These and other issues will be addressed by any Fund that
may hold such obligations in order to reduce the risk of distributing
insufficient income to preserve its status as a regulated investment company and
seek to avoid becoming subject to federal income or excise tax.
Limitations imposed by the Code on regulated investment companies like
the Funds may restrict a Fund's ability to enter into futures, options, and
forward transactions.
Certain options, futures and forward foreign currency transactions
undertaken by a Fund may cause the Fund to recognize gains or losses from
marking to market even though its positions have not been sold or terminated and
affect the character as long-term or short-term (or, in the case of certain
currency forwards, options and futures, as ordinary income or loss) and timing
of some capital gains and losses realized by the Fund. Also, certain of a Fund's
losses on its transactions involving options, futures or forward contracts
and/or offsetting portfolio positions may be deferred rather than being taken
into account currently in calculating the Fund's taxable income. Certain of the
applicable tax rules may be modified if a Fund is eligible and chooses to make
one or more of certain tax elections that may be available. These transactions
may therefore affect the amount, timing and character of a Fund's distributions
to shareholders. The Funds will take into account the special tax rules
(including consideration of available elections) applicable to options, futures
or forward contracts in order to minimize any potential adverse tax
consequences.
The federal income tax rules applicable to interest rate swaps, caps
and floors are unclear in certain respects, and a Fund may be required to
account for these transactions in a manner that, in certain circumstances, may
limit the degree to which it may utilize these transactions.
A Fund may recognize gain with respect to appreciated stock, debt, and
partnership interests upon entering into short sales, offsetting notional
principal contracts, futures, forwards, and options with respect to the same or
substantially identical property.
Distributions from a Fund's current or accumulated earnings and profits
("E&P"), as computed for federal income tax purposes, will be taxable as
described in the Funds' prospectus
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<PAGE> 168
whether taken in shares or in cash. Distributions, if any, in excess of E&P will
constitute a return of capital, which will first reduce an investor's tax basis
in a Fund's shares and thereafter (after such basis is reduced to zero) will
generally give rise to capital gains. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the amount of
cash they would have received had they elected to receive the distributions in
cash, divided by the number of shares received.
At the time of an investor's purchase of shares of a Fund (other than
Money Market Fund), a portion of the purchase price is often attributable to
realized or unrealized appreciation in the Fund's portfolio or undistributed
taxable income of the Fund. Consequently, subsequent distributions from such
appreciation or income may be taxable to such investor even if the net asset
value of the investor's shares is, as a result of the distributions, reduced
below the investor's cost for such shares, and the distributions in reality
represent a return of a portion of the purchase price.
Upon a redemption of shares of a Fund, other than Money Market Fund,
(including by exercise of the exchange privilege) a shareholder may realize a
taxable gain or loss depending upon his basis in his shares. Such gain or loss
will be treated as capital gain or loss if the shares are capital assets in the
shareholder's hands and, will be taxed depending upon the shareholder's tax
holding period for the shares. A sales charge paid in purchasing shares of a
Fund cannot be taken into account for purposes of determining gain or loss on
the redemption or exchange of such shares within 90 days after their purchase to
the extent shares of the Fund are subsequently acquired without payment of a
sales charge pursuant to the reinvestment or exchange privilege. Such
disregarded load will result in an increase in the shareholder's tax basis in
the shares subsequently acquired. Also, any loss realized on a redemption or
exchange will be disallowed to the extent the shares disposed of are replaced
with shares of the same Fund within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of, such as pursuant to an
election to reinvest dividends or capital gain distributions automatically. In
such a case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss. Any loss realized upon the redemption of shares with a tax
holding period of six months or less will be treated as a long-term capital loss
to the extent of any amounts treated as distributions of long-term capital gain
with respect to such shares.
For purposes of the dividends received deduction available to
corporations, dividends received by a Fund, if any, from U.S. domestic
corporations in respect of the stock of such corporations held by the Fund, for
federal income tax purposes, for at least 46 days during the 90-day period that
begins 45 days before the stock becomes ex-dividend and distributed and
designated by the Fund may be treated as qualifying dividends. The holding
period for dividends on preferred stock is 91 days during the 180-day period
that begins 90 days before the stock becomes ex-dividend. Corporate shareholders
must meet the minimum holding period requirement stated above (46 or 91 days)
with respect to their shares of the applicable Fund in order to qualify for the
deduction and, if they borrow to acquire such shares, may be denied a portion of
the dividends received deduction. The entire qualifying dividend, including the
otherwise deductible
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<PAGE> 169
amount, will be included in determining the excess (if any) of a corporate
shareholder's adjusted current earnings over its alternative minimum taxable
income, which may increase its alternative minimum tax liability. Additionally,
any corporate shareholder should consult its tax adviser regarding the
possibility that its basis in its shares may be reduced, for federal income tax
purposes, by reason of "extraordinary dividends" received with respect to the
shares, for the purpose of computing its gain or loss on redemption or other
disposition of the shares.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions and certain prohibited transactions, is accorded to shareholder
accounts maintained as qualified retirement plans. Shareholders should consult
their tax advisers for more information.
The foregoing discussion relates solely to U.S. Federal income tax law
as applicable to U.S. persons (i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates) subject to tax under
such law. The discussion does not address special tax rules applicable to
certain classes of investors, such as tax-exempt entities, insurance companies,
and financial institutions. Dividends, capital gain distributions, and ownership
of or gains realized on the redemption (including an exchange) of the shares of
a Fund may also be subject to state and local taxes. Shareholders should consult
their own tax advisers as to the federal, state or local tax consequences of
ownership of shares of, and receipt of distributions from, the Funds in their
particular circumstances.
Non-U.S. investors not engaged in a U.S. trade or business with which
their investment in a Fund is effectively connected will be subject to U.S.
Federal income tax treatment that is different from that described above. These
investors may be subject to non-resident alien withholding tax at the rate of
30% (or a lower rate under an applicable tax treaty) on amounts treated as
ordinary dividends from a Fund and, unless an effective IRS Form W-8 or
authorized substitute is on file, to 31% backup withholding on certain other
payments from the Fund. Non-U.S. investors should consult their tax advisers
regarding such treatment and the application of foreign taxes to an investment
in any Fund.
STATE AND LOCAL. Each Fund may be subject to state or local taxes in
jurisdictions in which such Fund may be deemed to be doing business. In
addition, in those states or localities which have income tax laws, the
treatment of such Fund and its shareholders under such laws may differ from
their treatment under federal income tax laws, and investment in such Fund may
have different tax consequences for shareholders than would direct investment in
such Fund's portfolio securities. Shareholders should consult their own tax
advisers concerning these matters.
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<PAGE> 170
PRINCIPAL UNDERWRITER
HIFSCO, the investment manager of each Fund, also serves as the
principal underwriter. HIFSCO is located at 200 Hopmeadow Street, Simsbury,
Connecticut 06070.
CUSTODIAN
Portfolio securities of each Fund are held pursuant to a Custodian
Agreement between the Company and State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110.
TRANSFER AGENT SERVICES
Boston Financial Data Services, 66 Brooks Drive, Braintree,
Massachusetts 02184, is the transfer agent for each Fund.
INDEPENDENT PUBLIC ACCOUNTANTS
The audited financial statements and financial statement highlights
included in this registration statement, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report. The principal business address of Arthur Andersen
LLP is One Financial Plaza, Hartford, Connecticut 06103.
OTHER INFORMATION
The Hartford has granted the Company the right to use the name, "The
Hartford" or "Hartford", and has reserved the right to withdraw its consent to
the use of such name by the Company and the Funds at any time, or to grant the
use of such name to any other company.
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
The financial statements and financial highlights of the Company as of
and for the year ended December 31, 1998, together with the notes thereto and
report of Arthur Andersen LLP, independent public accountants, contained in the
Company's annual report as filed with the Securities and Exchange Commission are
incorporated by reference into this Statement of Additional Information.
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<PAGE> 171
APPENDIX
The rating information which follows describes how the rating services
mentioned presently rate the described securities. No reliance is made upon the
rating firms as "experts" as that term is defined for securities purposes.
Rather, reliance on this information is on the basis that such ratings have
become generally accepted in the investment business.
RATING OF BONDS
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
<PAGE> 172
Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of ever
earning any real investment standing.
STANDARD AND POOR'S CORPORATION ("STANDARD & POOR'S")
AAA - Bonds rated AAA are the highest grade obligations. Capacity to
pay interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from AAA issues only in small degree.
A - Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the considerable
investment strength but are not entirely free from adverse effects of changes in
circumstances and economic conditions than debt in the highest rated categories.
BBB - Bonds rated BBB and regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category then in higher rated categories.
BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC, and C is regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.
RATING OF COMMERCIAL PAPER
Purchases of corporate debt securities used for short-term investment,
generally called commercial paper, will be limited to the top two grades of
Moody's, Standard & Poor's, Duff & Phelps, Fitch Investor Services and Thomson
Bank Watch or other NRSROs (nationally recognized statistical rating
organizations) rating services and will be an eligible security under Rule 2a-7.
MOODY'S
Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
<PAGE> 173
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance
on debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
- Well-established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.
Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Issuers rated Not Prime do not fall within any of the Prime rating
categories.
STANDARD & POOR'S
The relative strength or weakness of the following factors determines
whether the issuer's commercial paper is rated A-1 or A-2.
- Liquidity ratios are adequate to meet cash requirements.
Liquidity ratios are basically as follows, broken down by the type of
issuer:
Industrial Company: acid test ratio, cash flow as a percent of
current liabilities, short-term debt as a percent of current
liabilities, short-term debt as a percent of current assets.
Utility: current liabilities as a percent of revenues, cash
flow as a percent of current liabilities, short-term debt as a
percent of capitalization.
Finance Company: current ratio, current liabilities as a
percent of net receivables, current liabilities as a percent
of total liabilities.
<PAGE> 174
- The long-term senior debt rating is "A" or better; in some
instances "BBB" credits may be allowed if other factors
outweigh the "BBB".
- The issuer has access to at least two additional channels of
borrowing.
- Basic earnings and cash flow have an upward trend with
allowances made for unusual circumstances.
- Typically, the issuer's industry is well established and the
issuer has a strong position within its industry.
- The reliability and quality of management are unquestioned.
<PAGE> 175
THE HARTFORD MUTUAL FUNDS, INC.
PART C - OTHER INFORMATION
Item 23.
a. Articles of Incorporation(1)
b. By-Laws(1)
c. Not Applicable
d.(i) Form of Investment Advisory Agreement(1)
d.(ii) Form of Sub-Advisory Agreement(1)
d.(iii) Investment Management Agreement with Hartford Investment
Financial Services Company(3)
d.(iv) Investment Sub-Advisory Agreement with Wellington Management
Company LLP(3)
d.(v) Investment Services Agreement with The Hartford Investment
Management Company(3)
d.(vi) Form of Amendment Number 1 to Investment Management
Agreement(4)
d.(vii) Form of Amendment Number 1 to Sub-Advisory Agreement between
Hartford Investment Financial Services Company and
Wellington Management Company LLP(4)
d.(viii) Form of Amendment Number 2 to Investment Management
Agreement(5)
d.(ix) Form of Amendment Number 2 to Sub-Advisory Agreement between
Hartford Investment Financial Services Company and
Wellington Management Company LLP(5)
d.(x) Form of Amendment Number 1 to Investment Services Agreement
with The Hartford Investment Management Company(8)
d.(xi) Form of Amendment Number 3 to Investment Management
Agreement(8)
- --------
(1) Filed with Registrant's Initial Registration Statement on April 9, 1996.
(2) Filed with Registrant's Pre-Effective Amendment #1 on June 27, 1996.
(3) Filed with Registrant's Post-Effective Amendment #3 on June 20, 1997.
(4) Filed with Registrant's Post-Effective Amendment #4 on October 16, 1997.
(5) Filed with Registrant's Post-Effective Amendment #5 on February 6, 1998.
(6) Filed with Registrant's Post-Effective Amendment #6 on April 24, 1998.
(7) Filed with Registrant's Post-Effective Amendment #7 on May 13, 1998.
(8) Filed with Registrant's Post-Effective Amendment #9 on July 15, 1998.
(9) Incorporated by reference to Registrant's filing pursuant to Rule 30d-1 of
the Investment Company Act of 1940.
(10) Incorporated by reference to Registrant's amended NSAR-B filed on
April 13, 1999.
<PAGE> 176
d.(xii) Form of Amendment Number 3 to Sub-Advisory Agreement between Hartford
Investment Financial Services Company and Wellington Management
Company LLP(8)
e.(i) Form of Principal Underwriting Agreement(1)
e.(ii) Form of Dealer Agreement with the Distributor(2)
e.(iii) Form of Amendment Number 1 to Principal Underwriting Agreement(4)
e.(iv) Form of Amendment Number 2 to Principal Underwriting Agreement(5)
e.(v) Form of Amendment Number 3 to Principal Underwriting Agreement(8)
f. Not Applicable
g.(i) Form of Custodian Agreement(2)
g.(ii) Form of Amendment Number 1 to Custodian Agreement(4)
g.(iii) Form of Amendment Number 2 to Custodian Agreement(5)
g.(iv) Form of Amendment Number 3 to Custodian Agreement(8)
h.(i) Form of Transfer Agency and Service Agreement(2)
h.(ii) Form of Amendment Number 1 to Transfer Agency and Service Agreement(4)
h.(iii) Form of Amendment Number 2 to Transfer Agency and Service Agreement(5)
h.(iv) Form of Amendment Number 3 to Transfer Agency and Service Agreement(7)
h.(v) Form of Amendment Number 4 to Transfer Agency and Service Agreement(8)
i. Opinion and Consent of Counsel
j. Consent of Independent Public Accountants
k. 1998 Annual Report to Shareholders' Financial Statements(9)
l. Not Applicable
m.(i) Form of Rule 12b-1 Distribution Plan for Class A Shares(1)
m.(ii) Form of Rule 12b-1 Distribution Plan for Class B Shares(1)
m.(iii) Form of Rule 12b-1 Distribution Plan for Class C Shares(7)
m.(iv) Form of Amended Rule 12b-1 Distribution Plan for Class A Shares(4)
m.(v) Form of Amended Rule 12b-1 Distribution Plan for Class B Shares(4)
m.(vi) Form of Amendment Number 1 to Amended and Restated Rule 12b-1
Distribution Plan for Class A Shares(5)
m.(vii) Form of Amendment Number 1 to Amended and Restated Rule 12b-1
Distribution Plan for Class B Shares(5)
m.(viii) Form of Number 2 to Amended and Restated Rule 12b-1
Distribution Plan for Class A Shares(8)
m.(ix) Form of Number 2 to Amended and Restated Rule 12b-1
Distribution Plan for Class B Shares(8)
m.(x) Form of Amendment Number 1 to Rule 12b-1 Distribution Plan for Class
C Shares(8)
n. Financial Data Schedules(10)
o.(i) Form of Rule 18f-3 Plan(1)
o.(ii) Form of Amended Rule 18f-3 Plan(4)
o.(iii) Form of Amendment Number 1 to Amended and Restated Rule 18f-3 Plan(5)
o.(iv) Form of Amended and Restated Rule 18f-3 Plan to Add Class C Shares(7)
o.(v) Form of Amendment Number 1 to Amended and Restated Rule 18f-3 Plan
which added Class C Shares(8)
<PAGE> 177
p. Powers of Attorney(6)
Item 24. Persons Controlled by or Under Common Control with Registrant.
Inapplicable
Item 25. Indemnification.
Reference is made to Article V of the Articles of Incorporation filed
with Registrant's Initial Registration Statement on April 9, 1996.
Item 26. Business and Other Connections of Investment Adviser.
Hartford Investment Financial Services Company serves as investment
adviser to each of the portfolios included in this Registration Statement
<TABLE>
<CAPTION>
Position with Hartford
Investment Financial
Name Services Company Other Business
- ---- ---------------- --------------
<S> <C> <C>
Lowndes A. Smith President President of Hartford Life, Inc.
Thomas M. Marra Executive Vice Executive Vice President of Hartford Life,
President-Sales and Inc.
Distribution
Joseph H. Gareau Executive Vice President and Director of The Hartford
President-Investments Investment Management Company ("HIMCO")
and HL Investment Advisors, Inc. ("HL
Advisors")
Peter W. Cummins Vice President-Sales and Senior Vice President of Hartford Life,
Distribution Inc.
Andrew W. Kohnke Vice President-Investments Managing Director and Director of HIMCO
and HL Advisors
David N. Levenson Vice President Assistant Vice President of Hartford Life,
Inc.
George R. Jay Controller Director and Secretary, Life Controllers
of Hartford Life, Inc.
Edmund V. Mahoney Chief Compliance Officer Vice President of HIMCO
Lynda Godkin General Counsel and Secretary Senior Vice President and General Counsel
of Hartford Life, Inc.
</TABLE>
<PAGE> 178
Item 27. Principal Underwriters
Hartford Investment Financial Services Company ("HIFSCO") is an
indirect wholly owned subsidiary of The Hartford Financial Services Group, Inc.
HIFSCO is the principal underwriter for no other investment companies.
The Directors and principal officers of HIFSCO and their position with
the Registrant are included under Item 26.
Item 28. Location of Accounts and Records.
Books or other documents required to be maintained by the Registrant by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are maintained by the Registrant's custodian, State Street Bank and
Trust Company, 225 Franklin Street, Boston, MA 02110 and the Registrant's
transfer agent, Boston Financial Data Services, Inc., 66 Brooks Drive,
Braintree, MA 02184. Registrant's financial ledgers and other corporate records
are maintained at its offices at the Hartford Life Insurance Companies, 200
Hopmeadow Street, Simsbury, CT 06089.
Item 29. Management Services
Not Applicable
Item 30. Undertakings.
Not Applicable
<PAGE> 179
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on the 23rd day of
April, 1999.
THE HARTFORD MUTUAL FUNDS, INC.
By: *
---------------------------
Joseph H. Gareau
Its: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
* President April 23, 1999
- ---------------------------------------
Joseph H. Gareau (Chief Executive Officer
& Director)
* Controller & Treasurer April 23, 1999
- --------------------------------------- (Chief Accounting Officer and
George R. Jay Chief Financial Officer)
* Director April 23, 1999
- ---------------------------------------
Joseph A. Biernat
* Director April 23, 1999
- ---------------------------------------
Winifred E. Coleman
* Director April 23, 1999
- ---------------------------------------
William A. O'Neill
* Director April 23, 1999
- ---------------------------------------
Millard H. Pryor, Jr.
* Director April 23, 1999
- ---------------------------------------
Lowndes A. Smith
</TABLE>
<PAGE> 180
<TABLE>
<S> <C> <C>
* Director April 23, 1999
- ---------------------------------------
John K. Springer
/s/ Kevin J. Carr April 23, 1999
- -------------------------------------------
- - By Kevin J. Carr
Attorney-in-fact
</TABLE>
<PAGE> 181
EXHIBIT INDEX
Exhibit No.
i. Opinion and Consent of Counsel
j. Consent of Independent Public Accountants
<PAGE> 1
EXHIBIT I
The Hartford Financial Services Group, Inc.
Hartford Plaza
Hartford, CT 06115
April 23, 1999
The Hartford Mutual Funds, Inc.
Hartford Plaza
Hartford, CT 06115
Gentlemen:
I have examined the Articles of Incorporation of The Hartford Mutual Funds, Inc.
(hereafter referred to as "Fund"); the By-Laws of the Fund; documents evidencing
various pertinent corporate proceedings; and such other things considered to be
material to determine the legality of the sale of the authorized but unissued
shares of the Fund's stock. Based upon my examination, it is my opinion that the
Fund is a validly organized and existing corporation of the State of Maryland
and it is legally authorized to issue its shares of common stock, at prices
determined as described in the Fund's currently effective Prospectus, when such
shares are properly registered under all applicable federal and state securities
laws.
Based upon the foregoing, it is my opinion that the Fund's shares were, when
issued for cash consideration as described in the Fund's currently effective
prospectus, validly issued, fully paid and nonassessable stock of the Fund.
I hereby consent to the inclusion of this Opinion as an Exhibit to the Fund's
Post-Effective Amendment to its Registration Statement.
Very truly yours,
/s/ Kevin J. Carr
Kevin J. Carr
Counsel
<PAGE> 1
EXHIBIT J
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 333-02381 for The Hartford Mutual Funds, Inc.
(consisting of The Hartford Money Market, The Hartford Bond Income Strategy, The
Hartford Advisers, The Hartford Dividend and Growth, The Hartford Stock, The
Hartford Capital Appreciation, The Hartford Small Company, The Hartford
International Opportunities, The Hartford Global Leaders, The Hartford High
Yield, The Hartford MidCap and The Hartford Growth and Income Fund) on Form
N-1A.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 23, 1999
