<PAGE> 1
As filed with the Securities and Exchange Commission on February 12, 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 [X]
Pre-Effective Amendment No. [ ]
---------
Post-Effective Amendment No. 11 [X]
--------
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 13
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 will be filed on or before March 31, 1999.
It is proposed that this filing will become effective (check appropriate box).
Immediately upon filing pursuant to paragraph (b)
- -----
On pursuant to paragraph (b) of Rule 485
-------------------------------
60 days after filing pursuant to paragraph (a)(1) of Rule 485 X On
- -----------
X On May 1, 1999 pursuant to paragraph (a)(1)of Rule 485
- ----- -----------
75 days after filing pursuant to paragraph (a)(2) of Rule 485
- -----------
On pursuant to paragraph (a)(2) of Rule 485
- ----------- -------------------
<PAGE> 2
This registration statement includes one combined prospectus for the
Class A, B and C shares, one combined prospectus for the Class Y shares, and a
combined statement of additional information, for the following funds:
FUND NAME
The Hartford Small Company Fund
The Hartford Capital Appreciation Fund
The Hartford MidCap Fund
The Hartford International Opportunitites 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> 3
THE HARTFORD MUTUAL FUNDS, INC.
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
MAY 1, 1999
As with all mutual funds, the Securities and Exchange Commission has not judged
whether these funds are good investments or whether the information in this
prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.
SMALL COMPANY FUND
CAPITAL APPRECIATION FUND
MIDCAP FUND
INTERNATIONAL OPPORTUNITIES FUND
GLOBAL LEADERS FUND
STOCK FUND
GROWTH AND INCOME FUND
DIVIDEND AND GROWTH FUND
ADVISERS FUND
HIGH YIELD FUND
BOND INCOME STRATEGY FUND
MONEY MARKET FUND
THE HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 8416
BOSTON, MA 02266-8416
<PAGE> 4
CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
A summary of each fund's goals, The Hartford Small Company Fund 4
strategies, risks, performance and The Hartford Capital Appreciation Fund 7
expenses. The Hartford MidCap Fund 10
The Hartford International Opportunities Fund 13
The Hartford Global Leaders Fund 17
The Hartford Stock Fund 20
The Hartford Growth and Income Fund 23
The Hartford Dividend and Growth Fund 26
The Hartford Advisers Fund 29
The Hartford High Yield Fund 32
The Hartford Bond Income Strategy Fund 35
The Hartford Money Market Fund 38
Prior performance of similar funds 41
Description of additional Additional investment matters 44
investment strategies and Risks of investing in the funds 45
investment risks.
Information on your account. About your account 47
Choosing a share class 47
How sales charges are calculated 47
Sales charge reductions and waivers 49
Opening an account 50
Buying shares 51
Selling shares 53
Transaction policies 56
Dividends and account policies 57
Additional investor services 57
Further information on the funds. Additional share classes 59
Financial highlights 60
For more information
(back cover)
</TABLE>
2
<PAGE> 5
INTRODUCTION
THE HARTFORD MUTUAL FUNDS, INC.
The Hartford Mutual Funds 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 FDIC or any other government agency. Because you could lose money by
investing in these funds, be sure to read all risk disclosure carefully before
investing.
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.
THE 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 $211 billion in
assets.
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 with respect to
approximately $61.2 billion of assets for various clients.
3
<PAGE> 6
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
INVESTMENT GOAL AND STYLE. The Hartford Small Company Fund seeks growth
of capital by investing primarily in equity securities selected on the basis of
potential for capital appreciation.
The fund normally invests at least 65% of its total assets in equity
securities of companies with market capitalizations within the range represented
by the Russell 2000 Index. The fund may invest up to 20% of its total assets in
securities of non-U.S. companies.
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.
The fund is broadly diversified by industry and sector.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol IHSAX
CUSIP 416645109
CLASS B
Symbol HSCBX
CUSIP 416645208
CLASS C
Symbol
CUSIP 416645646
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
4
<PAGE> 7
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 19.28%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
INDEX: Russell 2000 Index, an unmanaged index of small company equity
securities that are similar, but not identical, to those in the fund's
portfolio.
(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.
The investment management fee paid by the fund for the 1998 fiscal year
was 0.85%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to your
account. The annual operating expenses are paid from the fund's assets and are
therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases
5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.85% 0.85% 0.85%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Other expenses (before reimbursements) (2) ___% ___% ___%
Total operating expenses (before
reimbursements) (2) ___% ___% ___%
</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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you
reinvested all distributions and that the average return was 5%. The
example is for comparison only, and does not represent the fund's
actual expenses and returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
6
<PAGE> 9
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
INVESTMENT GOAL AND STYLE. The Hartford Capital Appreciation Fund seeks
growth of capital by investing primarily in equity securities selected on the
basis of potential for capital appreciation.
The fund normally invests at least 65% of its total assets in equity
securities of small, medium and large companies. The fund may invest up to 20%
of its total assets in securities of non-U.S. 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 for
a catalyst event that will trigger stock price appreciation.
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.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol ITHAX
CUSIP 416645406
CLASS B
Symbol IHCAX
CUSIP 416645505
CLASS C
Symbol
CUSIP 416645638
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
7
<PAGE> 10
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[Bar Graph]
<TABLE>
<S> <C>
1997 55.11%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
(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.
The investment management fee paid by the fund for the 1998 fiscal year was
0.79%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to your
account. The annual operating expenses are paid from the fund's assets and are
therefore paid by shareholders indirectly.
8
<PAGE> 11
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
-
<S> <C> <C> <C>
Maximum sales charge (load) on purchases 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.79% 0.79% 0.79%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
Other expenses (before reimbursements) (2) 0.34% 0.35% 0.35%
Total operating expenses (before
reimbursements) (2) 1.48% 2.14% 2.14%
</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%. Assuming this waiver total
operating expenses were 1.43% for the Class A shares. 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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you
reinvested all distributions and that the average return was 5%. The
example is for comparison only, and does not represent the fund's
actual expenses and returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
9
<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
INVESTMENT GOAL AND STYLE. The Hartford MidCap Fund seeks long-term
growth of capital by investing primarily in equity securities selected on the
basis of potential for capital appreciation.
The fund normally invests at least 65% of its total assets in equity
securities of companies with market capitalizations within the range represented
by the Standard & Poor's MidCap 400 Index. The fund may invest up to 20% of its
total assets in securities of non-U.S. companies.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach,
Wellington Management analyzes the macro-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 secular and cyclical changes and
identifies industries and economic sectors that are expected
to grow faster than the overall economy.
- 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.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol HFMCX
CUSIP 416645711
CLASS B
Symbol
CUSIP 416645695
CLASS C
Symbol
CUSIP 416645554
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
10
<PAGE> 13
PAST PERFORMANCE. The bar chart and table below indicate the risks of
investing in the fund. The bar chart figures do not include the effect of sales
charges; the average annual figures do. All figures assume that all
distributions were reinvested. Keep in mind that past performance does not
indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[Blank Bar Graph for 1998]
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 12/30/97)
<S> <C> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
INDEX: Standard & Poor's MidCap 400 Index, an unmanaged index of equity
securities that are similar, but not identical, to those in the fund's
portfolio.
(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.
The investment management fee paid by the fund for the 1998 fiscal year was
0.85%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to 8
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
11
<PAGE> 14
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.85% 0.85% 0.85%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
Other expenses (before reimbursements) (2)
---% ---% ---%
Total operating expenses (before
reimbursements) (2) ---% ---% ---%
</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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you
reinvested all distributions and that the average return was 5%. The
example is for comparison only, and does not represent the fund's
actual expenses and returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
12
<PAGE> 15
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
INVESTMENT GOAL AND STYLE. The Hartford International Opportunities
Fund seeks growth of capital by investing primarily in equity securities issued
by non-U.S. companies.
The fund normally invests at least 65% of its assets in equity
securities issued by non-U.S. companies. The fund anticipates that, under normal
market conditions, it will diversify 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 and considers companies for inclusion in
the fund's portfolio that are typically larger, high quality
companies that operate in established markets. 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 looks for,
among other things, a strong balance sheet, attractive industry dynamics, strong
competitive advantages and attractive relative value within the context of a
security's primary trading market.
The fund may also invest on a limited basis in smaller companies and
less developed emerging markets.
RISK SUMMARY. The fund is subject to the following investment risks:
13
<PAGE> 16
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol IHOAX
CUSIP 416645703
CLASS B
Symbol HIOBX
CUSIP 416645802
CLASS C
Symbol
CUSIP 416645554
</TABLE>
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[Bar Graph]
<TABLE>
<S> <C>
1997 0.84%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
14
<PAGE> 17
INDEX: Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP")
Index, an unmanaged index of equity securities that are similar, but not
identical, to those in the fund's portfolio.
(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.
The investment management fee paid by the fund for the 1998 fiscal year was
0.85%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to your
account. The annual operating expenses are paid from the fund's assets and are
therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.85% 0.85% 0.85%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
Other expenses (before reimbursements) (2)
---% ---% ---%
Total operating expenses (before
reimbursements) (2) ---% ---% ---%
</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.
The hypothetical example below shows what your expense would be if you
invested $10,000 over the time frames indicated, assuming you
reinvested all distributions and that the average return was 5%. The
example is for comparison only, and does not represent the fund's
actual expenses and returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
16
<PAGE> 19
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
INVESTMENT GOAL AND STYLE. The Hartford Global Leaders Fund seeks
growth of capital by investing primarily in equity securities issued by U.S.
companies and non-U.S. companies.
The fund invests primarily in a diversified portfolio of equity
securities 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 equity securities 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 may invest up to 25% of its assets in
securities of issuers located in emerging market countries.
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
secular and cyclical changes 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.
17
<PAGE> 20
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol
CUSIP 416645539
CLASS B
Symbol
CUSIP 416645521
CLASS C
Symbol
CUSIP 416645513
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
PAST PERFORMANCE. The table below indicates the risks of investing in
the fund and shows the fund's performance over time (along with that of a
broad-based market index for reference). The table includes the effect of sales
charges. All figures assume that all distributions were reinvested. Keep in mind
that past performance does not indicate future results.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
(SINCE 9/30/98)
<S> <C> <C>
CLASS A %
CLASS B %
CLASS C %
INDEX %
</TABLE>
INDEX: MSCI World Index, an unmanaged index of equity securities that
are similar, but not identical, to those in the fund's portfolio.
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
The fund pays the following
investment management fees on
average daily net assets:
<TABLE>
<S> <C>
Net Asset Value Annual Rate
- --------------- -----------
First $500 million 0.85%
Next $500 million 0.75%
Over $1 billion 0.70%
</TABLE>
YOUR EXPENSES. The shareholder transaction expenses are charged
directly to your account. The annual operating expenses are paid from the fund's
assets and are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
Maximum sales charge (load) on purchases 5.50% None 1.00%
</TABLE>
18
<PAGE> 21
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.85% 0.85% 0.85%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
Other expenses (before reimbursements) (2)
---% ---% ---%
Total operating expenses (before
reimbursements) (2) ---% ---% ---%
</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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you
reinvested all distributions and that the average return was 5%. The
example is for comparison only, and does not represent the fund's
actual expenses and returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
19
<PAGE> 22
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
INVESTMENT GOAL AND STYLE. The Hartford Stock Fund seeks long-term
growth of capital, with income as a secondary consideration, by investing
primarily in equity securities.
The fund normally invests at least 65% of the fund's total assets in
stocks. The fund may invest up to 20% of its total assets in securities of
non-U.S. companies. 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 macroeconomic 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 secular
and cyclical changes and identifies industries and economic sectors
that are expected to grow faster than the overall economy.
- - 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. 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, sustainable or increasing dividends, a strong management team, a
globally competitive position.
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.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol IHSTX
CUSIP 416645877
CLASS B
Symbol ITSBX
CUSIP 416645869
CLASS C
Symbol
CUSIP 416645612
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
20
<PAGE> 23
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR CHART]
<TABLE>
<S> <C>
1997 31.78%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS - FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
(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.
The investment management fee paid by the fund for the 1998 fiscal year was
0.80%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to your
account. The annual operating expenses are paid from the fund's assets and are
therefore paid by shareholders indirectly.
21
<PAGE> 24
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum sales charge (load) on
purchases 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.80% 0.80% 0.80%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
Other expenses (before reimbursements) (2) 0.34% 0.35% 0.35%
Total operating expenses (before
reimbursements) (2) 1.49% 2.15% 2.15%
</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%. Assuming this waiver total
operating expenses were 1.44% for Class A shares. 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.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
22
<PAGE> 25
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
INVESTMENT GOAL. The Hartford Growth and Income Fund seeks growth of
capital and current income by investing primarily in equity securities with
earnings growth potential and steady or rising dividends.
The fund invests primarily in a diversified portfolio of equity
securities that typically have steady or rising dividends and whose prospects
for capital appreciation are considered favorable by Wellington Management. The
fund may invest up to 20% of its total assets in securities of non-U.S.
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, dividends and other
related measures of value.
Wellington Management then uses proprietary quantitative techniques to
affirm its fundamental evaluation of a security. These quantitative techniques
consist of: valuation analysis, which includes the use of a dividend discount
model and cash flow analysis, and momentum analysis, which includes an
assessment of a company's earnings momentum and stock price momentum. These
quantitative techniques seek to identify those securities that are: attractive
from the fundamental perspective, inexpensive based on the quantitative
valuation factors, and timely according to the quantitative momentum factors.
The fund's portfolio is broadly diversified by industry and company.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol
CUSIP 416645679
CLASS B
Symbol
CUSIP 416645661
CLASS C
Symbol
CUSIP 416645547
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
PAST PERFORMANCE. The table below indicates the risks of investing in
the fund and shows the fund's performance over time (along with that of a
broad-based market index for reference). The table includes the effect of sales
charges. All figures assume that all distributions were reinvested. Keep in mind
that past performance does not indicate future results.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIOD ENDING 12/31/98
23
<PAGE> 26
<TABLE>
<CAPTION>
LIFE OF FUND
(SINCE 4/30/98)
<S> <C> <C>
CLASS A %
CLASS B %
CLASS C(1) %
INDEX %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
(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.
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
The fund pays the following investment management fees on average daily net
assets:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
<S> <C>
First $500 million 0.80%
Next $500 million 0.70%
Over $1 billion 0.65%
</TABLE>
YOUR EXPENSES. The shareholder transaction expenses are charged
directly to your account. The annual operating expenses are paid from the fund's
assets and are therefore paid by shareholders indirectly.
(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.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.80% 0.80% 0.80%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
Other expenses (before reimbursements) (2) ___% ___% ___%
Total operating expenses (before
reimbursements) (2) ___% ___% ___%
</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.
24
<PAGE> 27
(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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you
reinvested all distributions and that the average return was 5%. The
example is for comparison only, and does not represent the fund's
actual expenses and returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
25
<PAGE> 28
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
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 equity securities.
The fund invests primarily in a diversified portfolio of equity
securities 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 may invest up
to 20% of its total assets in securities of non-U.S. 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.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol IHGIX
CUSIP 416645844
CLASS B
Symbol
CUSIP 416645661
CLASS C
Symbol
CUSIP 416645547
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Natural event risk
- Derivatives risk - Opportunity risk
- International investments risk - Small company risk
- Liquidity risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
26
<PAGE> 29
[BAR CHART]
<TABLE>
<S> <C>
1997 30.99%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
(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.
The investment management fee paid by the fund for the 1998 fiscal year was
0.75%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to paid
by the fund for the 1998 your account. The annual operating expenses are paid
from the fund's assets and are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum sales charge (load) on purchases 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.75% 0.75% 0.75%
12b-1 distribution and service fees
(before waiver) (1)(2) 0.35% 1.00% 1.00%
</TABLE>
27
<PAGE> 30
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Other expenses (before reimbursements) (2) 0.33% 0.35% 0.35%
Total operating expenses (before
reimbursements) (2) 1.43% 2.10% 2.10%
</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%. Assuming this waiver total
operating expenses were 1.38% for Class A shares. 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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you
reinvested all distributions and that the average return was 5%. The
example is for comparison only, and does not represent the fund's
actual expenses and returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
28
<PAGE> 31
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
INVESTMENT GOAL AND STYLE. The Hartford Advisers Fund seeks maximum
long-term total return by investing in common stocks and other equity
securities, bonds and other debt securities and money market instruments.
The fund actively allocates its assets among three categories:
- equity securities
- debt securities and
- money market instruments.
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. The fund may invest up to 20% of its total assets in securities of
non-U.S. companies.
The fund's investments in equity securities and securities that are
convertible into equity securities are substantially similar to the investments
permitted for the Stock Fund.
The debt securities in which the fund may invest include securities
issued or guaranteed by the U.S. Government and its agencies or
instrumentalities, securities rated investment grade, or if unrated, securities
deemed by Wellington Management to be professional of comparable quality.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS A
Symbol ITTAX
CUSIP 416645810
CLASS B
Symbol IHABX
CUSIP 416645794
CLASS C
Symbol
CUSIP 416645588
</TABLE>
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Market risk
- Credit risk - Natural event risk
- Derivatives risk - Opportunity risk
- Interest rate risk - Small company risk
- International investments risk - Style risk
- Liquidity risk - Valuation risk
- Management risk - Year 2000 risk
29
<PAGE> 32
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR CHART]
<TABLE>
<S> <C>
1997 23.30%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS - FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
S&P 500 % %
LGCB % %
</TABLE>
INDICES: S&P 500 Index and the Lehman Government Corporate Bond Index,
unmanaged indices of securities that are similar, but not identical, to those in
the fund's portfolio.
(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.
30
<PAGE> 33
The investment management fee paid by the fund for the 1998 fiscal year was
0.75%
YOUR EXPENSES. The shareholder transaction expenses are charged directly
to your account. The annual operating expenses are paid from the fund's assets
and are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION CLASS A CLASS B CLASS C
EXPENSES
<S> <C> <C> <C>
Maximum sales charge (load)
on purchases 5.50% None 1.00%
Maximum deferred sales charge
(load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.75% 0.75% 0.75%
12b-1 distribution and
service fees (before waiver)
(1)(2) 0.35% 1.00% 1.00%
Other expenses (before
reimbursements) (2) 0.33% 0.35% 0.35%
Total operating expenses
(before reimbursements) (2) 1.43% 2.10% 2.10%
</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%. Assuming this waiver total operating expenses were 1.38% for Class
A shares. 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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
31
<PAGE> 34
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
INVESTMENT GOAL AND STYLE. The Hartford High Yield Fund seeks high current
income by investing in non-investment grade fixed-income 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 fixed income securities (securities rated "Ba"
or lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or lower by
Standard and Poors 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 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, but
not more than 10% of its total assets in securities issued in non-U.S.
currencies (including the European Currency Unit and its successor, the Euro).
Securities hedged back into the U.S. dollar are not included in this 10%
restriction. The fund may also invest in non-U.S. debt securities of issuers
located in emerging markets.
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 fund looks at financial condition of
the issuers as well as the collateralization and other aspects of the securities
themselves.
FUND CODES
- ------------------
CLASS A
Symbol
CUSIP 416645489
CLASS B
Symbol
CUSIP 416645471
CLASS C
Symbol
CUSIP 416645463
RISK SUMMARY. The fund is subject to the following investment risks:
- - Correlation risk - Management risk
- - Credit risk - Market risk
- - Derivatives risk - Natural event risk
- - Interest rate risk - Opportunity risk
- - International - Style risk
investments risk - Valuation risk
- - Liquidity risk - Year 2000 risk
32
<PAGE> 35
PAST PERFORMANCE. The table below indicates the risks of investing in the
fund and shows the fund's performance over time (along with that of a
broad-based market index for reference). The table includes the effect of sales
charges. All figures assume that all distributions were reinvested. Keep in mind
that past performance does not indicate future results.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIOD ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
(SINCE
9/30/98)
<S> <C>
CLASS A %
CLASS B %
CLASS C %
INDEX %
</TABLE>
INDEX: Lehman High Yield Corporate Index, an unmanaged index of high yield
fixed income securities that are similar, but not identical, to those in the
fund's portfolio.
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
- --------------------------------------------------------------------------------
YOUR EXPENSES. The shareholder transaction expenses are charged directly
to your account. The annual operating expenses are paid from the fund's assets
and are therefore paid by shareholders indirectly.
The fund pays the following investment management fees on average daily net
assets:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
- --------------- -----------
<S> <C>
First $500 million 0.75%
Next $500 million 0.65%
Over $1 billion 0.60%
</TABLE>
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION CLASS A CLASS B CLASS C
EXPENSES
<S> <C> <C> <C>
Maximum sales charge (load)
on purchases 5.50% None 1.00%
Maximum deferred sales
charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.75% 0.75% 0.75%
12b-1 distribution and
service fees (before waiver)
(1)(2) 0.35% 1.00% 1.00%
Other expenses (before
reimbursements) (2) ___% ___% ___%
Total operating expenses
(before reimbursements) (2) ___% ___% ___%
</TABLE>
33
<PAGE> 36
(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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
34
<PAGE> 37
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
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.
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 or "BB+", "BB" or "BB-" by S&P), 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. 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 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 looks at financial
condition of the issuers as well as the collateralization and other aspects of
the securities themselves.
FUND CODES
- ------------------
CLASS A
Symbol ITBAX
CUSIP 416645778
CLASS B
- -------
Symbol ITBBX
CUSIP 416645760
CLASS C
- -------
Symbol
CUSIP 416645570
- -------------------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
- Correlation risk - Management risk
- Credit risk - Market risk
- Derivatives risk - Natural event risk
- Interest rate risk - Opportunity risk
- International - Style risk
investments risk - Valuation risk
- Liquidity risk - Year 2000 risk
- --------------------------------------------------------------------------------
35
<PAGE> 38
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR CHART]
<TABLE>
<S> <C>
1997 10.80%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
INDEX: Lehman Government Corporate Bond Index, an unmanaged index of
fixed-income securities that are similar, but not identical, to those in the
fund's portfolio.
(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.
The investment management fee paid by the fund for the 1998 fiscal year was
0.65%
YOUR EXPENSES. The shareholder transaction expenses are charged directly
to your account. The annual operating expenses are paid from the fund's assets
and are therefore paid by shareholders indirectly.
36
<PAGE> 39
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION CLASS A CLASS B CLASS C
EXPENSES
<S> <C> <C> <C>
Maximum sales charge (load)
on purchases 5.50% None 1.00%
Maximum deferred sales
charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.65% 0.65% 0.65%
12b-1 distribution and
service fees (before waiver)
(1)(2) 0.35% 1.00% 1.00%
Other expenses (before
reimbursements) (2) ___% ___% ___%
Total operating expenses
(before reimbursements) (2) ___% ___% ___%
</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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
37
<PAGE> 40
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
WILLIAM H. DAVISON
- - Senior Vice President of HIMCO
- - Manager of the fund since inception (1996)
- - Joined HIMCO in 1990
- - Investment professional since 1981
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 securities issued by
corporations and financial institutions. 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.
FUND CODES
- ------------------
CLASS A
Symbol IHAXX
CUSIP 416645745
CLASS B
- -------
Symbol
CUSIP 416645737
CLASS C
- -------
Symbol
CUSIP 416645562
- --------------------------------------------------------------------------------
RISK SUMMARY. 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, it is possible to lose money by investing in the fund. In addition, the
fund is subject to the following risks:
- Credit risk - Opportunity risk
- Interest rate risk - Style risk
- Management risk - Valuation risk
- Market risk - Year 2000 risk
- Natural event risk
- --------------------------------------------------------------------------------
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
38
<PAGE> 41
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR CHART]
<TABLE>
<S> <C>
1997 4.73%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS A % %
CLASS B % %
CLASS C(1) % %
INDEX % %
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term
treasury bills that are similar, but not identical, to those in the fund's
portfolio.
Current 7-day yield as of December 31, 1998:______%
Effective 7-day yield as of December 31, 1998: ______%
Please call 1-888-THE-STAG (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.
The investment management fee paid by the fund for the 1998 fiscal year was
0.50%
- --------------------------------------------------------------------------------
YOUR EXPENSES. The shareholder transaction expenses are charged directly
to your account. The annual operating expenses are paid from the fund's assets
and are therefore paid by shareholders indirectly.
39
<PAGE> 42
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION CLASS A CLASS B CLASS C
EXPENSES
<S> <C> <C> <C>
Maximum sales charge (load)
on purchases None None 1.00%
Maximum deferred sales
charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
Management fees 0.50% 0.50% 0.50%
12b-1 distribution and
service fees (before waiver) 0.35% 1.00% 1.00%
(1)(2)
Other expenses (before
reimbursements) (2) ___% ___% ___%
Total operating expenses
(before reimbursements) (2) ___% ___% ___%
</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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS A CLASS B CLASS C
(WITH/WITHOUT REDEMPTION)
<S> <C> <C> <C> <C> <C> <C>
Year 1 $ $ $ $ $ $
Year 3 $ $ $ $ $ $
Year 5 $ $ $ $ $ $
Year 10 $ $ $ $ $ $
</TABLE>
40
<PAGE> 43
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because the mutual funds began operations in July, 1996 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.
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. [TO BE
UPDATED AS OF 12/31/98 - WHOLE DOLLARS]
<TABLE>
<CAPTION>
Fund Corresponding HLS Fund
- ---- ----------------------
<S> <C>
Capital Appreciation Hartford Capital Appreciation HLS Fund, Inc.
(July 22, 1996) (April 2, 1984)
$ $
International Opportunities Hartford International Opportunities HLS Fund, Inc.
(July 22, 1996) (July 2, 1990)
$ $
Stock Hartford Stock HLS Fund, Inc.
(July 22, 1996) (August 31, 1977)
$ $
Dividend and Growth Hartford Dividend and Growth HLS Fund, Inc.
(July 22, 1996) (March 8, 1994)
$ $
Advisers Hartford Advisers HLS Fund, Inc.
(July 22, 1996) (March 31, 1983)
$ $
</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,
41
<PAGE> 44
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.
[THE FOLLOWING TABLE IS TO BE UPDATED AS OF 12/31/98]
<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
Class A expenses with no
load(1)
Class B expenses with
redemption
Class B expenses without
redemption
Class C expenses with
maximum load and
redemption
Class C expenses without load
or redemption
Hartford International
Opportunities HLS Fund, Inc.
----------------------------
Class A expenses plus
maximum load
Class A expenses with no
load(1)
Class B expenses with
redemption
Class B expenses without
redemption
Class C expenses with
maximum load and
redemption
Class C expenses without load
or redemption
</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).
42
<PAGE> 45
Hartford Stock HLS Fund,Inc.
- ----------------------------
Class A expenses plus
maximum load
Class A expenses with no
load(1)
Class B expenses with
redemption
Class B expenses without
redemption
Class C expenses with
maximum load and
redemption
Class C expenses without load
or redemption
Hartford Dividend and
Growth HLS Fund, Inc.
---------------------
Class A expenses plus
maximum load
Class A expenses with no
load(1)
Class B expenses with
redemption
Class B expenses without
redemption
Class C expenses with
maximum load and
redemption
Class C expenses without load
or redemption
Hartford Advisers HLS Fund, Inc.
- --------------------------------
Class A expenses plus
maximum load
Class A expenses with no
load(1)
Class B expenses with
redemption
Class B expenses without
redemption
Class C expenses with
maximum load and
redemption
Class C expenses without load
or redemption
43
<PAGE> 46
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 (other
than the Money Market 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.
44
<PAGE> 47
RISKS OF INVESTING IN THE FUNDS
- --------------------------------------------------------------------------------
The funds are subject to the following investment risks:
CORRELATION RISK The risk that changes in the value of a hedging instrument will
not match those of the asset being hedged (hedging is the use of one investment
to offset the effects of another investment). Incomplete correlation can result
in unanticipated risks.
CREDIT RISK The risk that the issuer of a security, or the counterparty to a
contract, will have its credit rating downgraded, default or otherwise become
unable to honor a financial obligation. This risk is higher for junk bonds.
DERIVATIVES RISK When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the fund
also holds, any loss generated by the derivative should be substantially offset
by gains on the hedged investment, and vice versa. While hedging can reduce or
eliminate losses, it can also reduce or eliminate gains. To the extent that a
derivative is not used as a hedge, the fund is directly exposed to the potential
gains and losses of that derivative. Gains and losses from non-hedging
derivative positions may be substantially greater than the derivative's original
cost.
INTEREST RATE RISK The risk of market losses attributable to increases in
interest rates. With fixed-rate securities (such as bonds), a rise in interest
rates typically causes a fall in values, while a fall in rates typically causes
a rise in values. Generally speaking, a fixed-rate security with longer maturity
is more sensitive to interest rate changes than a similar security of shorter
maturity.
INTERNATIONAL INVESTMENT RISKS Investments in foreign markets involve special
risks and considerations. Some of these factors are also present when investing
in the United States but are heightened when investing in non-US markets and
especially emerging markets. For example, these risks may include political and
economic instability, differing accounting and financial reporting standards or
inability to obtain reliable financial information regarding a company's balance
sheet and operations.
In addition, international investors may experience higher commission rates on
foreign portfolio transactions, potential adverse changes in tax and exchange
control regulations, the potential for restrictions on the flow of international
capital, and potential adverse effects from the transition to the euro in
European Monetary Union countries. Many foreign countries impose withholding
taxes on income from investments in such countries, which a fund may not be able
to recover. Also, changes in the exchange rates between the US dollar and
foreign currencies may have a negative impact on investments denominated in
foreign currencies, for example, by eroding or reversing gains or widening
losses from those investments. These risks are common to all mutual fund
investing in international securities.
LIQUIDITY RISK The risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like, especially in down
markets. The seller may have to lower the price, sell other securities instead,
or forego an investment opportunity, any of which could have a
45
<PAGE> 48
negative effect on fund management or performance. Common to all mutual funds.
MANAGEMENT RISK The risk that a strategy used by the fund's management may fail
to produce the intended result. Common to all mutual funds.
MARKET RISK The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. Market risk may affect a single issuer, an
industry, a sector or the stock or bond market as a whole. Common to all stocks
and bonds and the mutual funds that invest in them.
NATURAL EVENT RISK The risk of losses attributable to natural disasters, crop
failures and similar events. Common to all mutual funds.
OPPORTUNITY RISK The risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in less advantageous
investments. Common to all mutual funds.
SMALL COMPANY RISK The risks of securities of small capitalization companies,
which typically include issuers with less experience and shorter operating
histories. These investments may be more speculative than investments in larger
or better established companies. Other risks associated with smaller or newer
companies include less publicly-available information about the company, and the
normal risks which accompany the development of new products, markets or
services.
STYLE RISK The risk that a portfolio's investment style may not produce
favorable results relative to market trends. Common to all mutual funds.
VALUATION RISK The risk that the fund has valued certain of its securities at a
higher price than it can sell them for. Common to all mutual funds.
YEAR 2000 RISK The risk that the funds' operations could be disrupted by year
2000 computer system problems. Although the adviser and the funds' service
providers are taking steps to address this issue, there may still be some risk
of adverse effects. If the issuers of securities in a fund's portfolio have year
2000 problems, these securities could go down in value. Common to all mutual
funds.
46
<PAGE> 49
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.
Because 12b-1 fees are paid on an ongoing basis, Class B and Class C
shareholders could end up paying more expenses over the long term than if they
had paid a front-end sales charge.
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 as
follows:
<TABLE>
<CAPTION>
AS A %
AS A % OF OF YOUR
YOUR INVESTMENT OFFERING INVESTMENT
PRICE
<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 see below see below
</TABLE>
Sales charges for The Bond Income Strategy Fund and High Yield Fund are as
follows:
<TABLE>
<CAPTION>
YOUR INVESTMENT AS A % OF AS A %
OFFERING OF YOUR
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 see below see below
</TABLE>
INVESTMENTS OF $1 MILLION OR MORE in Class A shares may be made with no
47
<PAGE> 50
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 the shares being sold, whichever is less. The CDSCs
are as follows:
<TABLE>
<CAPTION>
YEARS AFTER CDSC ON ALL OTHER
PURCHASE FUND SHARES BEING SOLD
<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>
Front-End Sales Charge
----------------------
AS A % OF OFFERING AS A % OF YOUR
PRICE INVESTMENT
<S> <C>
1.00% 1.01%
</TABLE>
<TABLE>
<CAPTION>
CDSC
----
YEARS AFTER CDSC
PURCHASE
<S> <C>
1st year 1.00%
</TABLE>
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.
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
48
<PAGE> 51
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,
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
49
<PAGE> 52
- - 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.
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, carefully
following the instructions. If you have questions, please contact your
financial representative or call the transfer agent at the number shown
below.
4 Complete the appropriate parts of the application. 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.
5 Make your initial investment selection. You and your financial
representative can initiate any purchase, exchange or sale of shares.
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
50
<PAGE> 53
BUYING SHARES
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
BY CHECK
- - Make out a check for the investment amount, payable to "The Hartford
Mutual Funds, Inc."
- - Deliver the check and your completed application to your financial
representative, or mail to the address listed below.
BY EXCHANGE
- - Call your financial representative or the transfer agent to request an
exchange. The minimum exchange amount is $500 per fund.
BY WIRE
- - Deliver your completed application to your financial representative, or
mail it to the address below.
- - Obtain your account number by calling your financial representative or the
phone number below.
- - Instruct your bank to wire the amount of your 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
- - See "By Wire" and "By Exchange"
ADDING TO AN ACCOUNT
BY CHECK
- - Make out a check for the investment amount, payable to "The Hartford
Mutual Funds, Inc."
- - Fill out the detachable investment slip from an account statement. If no
slip is available, 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 transfer agent to request an
exchange. The minimum exchange amount is $500 per fund.
BY WIRE
- - Instruct your bank to wire the amount of your investment to:
State Street Bank and Trust Company
Account # 9905-205-2
Routing # 011000028
Specify the fund name, your share class, your account number and the
name(s) in which the account is registered. Your bank may charge a fee to
wire funds.
BY PHONE
- - Verify that your bank or credit union is a member of the Automated
Clearing House (ACH) system.
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
51
<PAGE> 54
- - Complete the "Telephone Exchanges and Telephone Redemption" and "Bank
Account or Credit Union Information" sections on your account application.
- - Call the transfer agent 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".
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
52
<PAGE> 55
SELLING SHARES
BY LETTER
- - Write a letter of instruction or complete a stock power 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.
- - 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 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" and "Bank
Account or Credit Union Information" sections of your new account
application.
- - Call the transfer agent 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 exchanging by
calling your financial representative or the transfer agent.
- - 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.
- - 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.
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
53
<PAGE> 56
- - Write a check for any amount over $100.
To sell shares through a systematic withdrawal plan, see "Additional Investor
Services".
54
<PAGE> 57
SELLING SHARES IN WRITING 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
- - 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.
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-THE-STAG (1-888-843-7824) for instructions.
55
<PAGE> 58
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 (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 if reliable market prices are unavailable. The Money Market
Fund's assets are valued at amortized cost.
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 accepted 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.
To protect the interests of other investors in the fund, each fund reserves the
right to reject or restrict any specific exchange request, if in the opinion of
the fund, the investor is engaging in a pattern of market timing. The fund
defines market timing as making six or more exchanges per calendar year where
any one exchange represents shares equal in value to more than 3% of the fund's
total assets. Accounts under common ownership or control, including accounts
administered by market timers, will be aggregated for purposes of this
definition.
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
56
<PAGE> 59
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.
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
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. 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.
57
<PAGE> 60
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.
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 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 Hartford Mutual Fund with a low minimum
investment of $250. To find out more, call 1-888-THE-STAG (1-888-843-7824).
58
<PAGE> 61
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; (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.
59
<PAGE> 62
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.68 $10.00
Net investment income (loss) (0.02) (0.02)
Net realized and unrealized gain (loss) on
investments 2.05 1.42
---- ----
Total from investment operations 2.03 1.40
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain on
investments (0.55) (0.72)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.55) (0.72)
------ ------
Net increase (decrease) in net asset value 1.48 0.68
Net asset value, end of period $12.16 $10.68
====== ======
TOTAL RETURN(2) 19.28% 14.11% (3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) 19,391 4,673
Ratio of expenses to average net assets before
waivers and reimbursements 1.77% 4.24% (4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.45% 1.45% (4)
Ratio of net investment income (loss) to average net
assets (0.61%) (0.60%)(4)
Portfolio turnover rate(5) 255.37% 69.92% (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.
60
<PAGE> 63
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.65 $10.00
Net investment income (loss) (0.03) (0.02)
Net realized and unrealized gain (loss) on
investments 1.97 1.39
---- ----
Total from investment operations 1.94 1.37
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain on
investments (0.55) (0.72)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.55) (0.72)
------ ------
Net increase (decrease) in net asset value 1.39 0.65
Net asset value, end of period $12.04 $10.65
====== ======
TOTAL RETURN(2) 18.49% 13.81% (3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $9,694 $241
Ratio of expenses to average net assets before
waivers and reimbursements 2.53% 20.03% (4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.15% 2.15% (4)
Ratio of net investment income (loss) to average net
assets (1.30%) (1.30%)(4)
Portfolio turnover rate(5) --- --- ---
</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.
61
<PAGE> 64
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</TABLE>
- --------------------
(1) Class C shares were first offered on July 31, 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.
62
<PAGE> 65
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.36 $10.00
Net investment income (loss) (0.03) (0.03)
Net realized and unrealized gain (loss) on
investments 7.34 3.80
------ ----
Total from investment operations 7.31 3.77
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain on
investments (0.77) (0.41)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.77) (0.41)
------ ------
Net increase (decrease) in net asset value 6.54 3.36
Net asset value, end of period $19.90 $13.36
====== ======
TOTAL RETURN(2) 55.11% 37.75% (3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $233,601 $9,028
Ratio of expenses to average net assets before
waivers and reimbursements 1.64% 4.10% (4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.45% 1.45% (4)
Ratio of net investment income (loss) to average net
assets (0.80%) (0.07%)(4)
Portfolio turnover rate(5) 119.61% 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.
63
<PAGE> 66
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.32 $10.00
Net investment income (loss) (0.06) (0.02)
Net realized and unrealized gain (loss) on
investments 7.22 3.75
---- ----
Total from investment operations 7.16 3.73
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain on
investments (0.77) (0.41)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.77) (0.41)
------ ------
Net increase (decrease) in net asset value 6.39 3.32
Net asset value, end of period $19.71 $13.32
====== ======
TOTAL RETURN(2) 54.15% 37.35% (3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $174,392 $889
Ratio of expenses to average net assets before
waivers and reimbursements 2.38% 9.05% (4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.15% 2.15% (4)
Ratio of net investment income (loss) to average net
assets (1.46%) (1.53%)(4)
Portfolio turnover rate(5) --- --- -----
</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.
64
<PAGE> 67
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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.
CLASS C - PERIOD ENDED:
<TABLE>
<CAPTION>
7/31/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</TABLE>
- --------------------
(1) Class C shares were first offered on July 31, 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.
65
<PAGE> 68
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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>
<S> <C>
CLASS A - PERIOD ENDED: 12/31/98(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
</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.
66
<PAGE> 69
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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>
<S> <C>
CLASS B - PERIOD ENDED: 12/31/98(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</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.
67
<PAGE> 70
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 7/31/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</TABLE>
- --------------------
(1) Class C shares were first offered on July 31, 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.
68
<PAGE> 71
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.72 $10.00
Net investment income (loss) 0.09 (0.02)
Net realized and unrealized gain (loss) on
investments (0.01) 0.79
------ ----
Total from investment operations 0.08 0.81
Less distributions:
Dividends from net investment income 0.00 (0.05) (0.06)
Distributions from net realized gain on
investments (0.17) (0.03)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.22) (0.09)
------ ------
Net increase (decrease) in net asset value (0.14) 0.72
Net asset value, end of period $10.58 $10.72
====== ======
TOTAL RETURN(2) 0.84% 8.14%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $15,701 $4,294
Ratio of expenses to average net assets before
waivers and reimbursements 2.25% 5.35%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.65% 1.65%(4)
Ratio of net investment income (loss) to average net
assets 0.88% 0.51%(4)
Portfolio turnover rate(5) 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.
69
<PAGE> 72
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.69 $10.00
Net investment income (loss) 0.07 (0.01)
Net realized and unrealized gain (loss) on
investments (0.06) 0.80
------ ----
Total from investment operations 0.01 0.79
Less distributions:
Dividends from net investment income 0.00 (0.04) (0.07)
Distributions from net realized gain on
investments (0.17) (0.03)
Return of capital 0.000 0.000 0.000
----- ------ -----
Total from distributions (0.21) (0.10)
------ ------
Net increase (decrease) in net asset value (0.20) 0.69
Net asset value, end of period $10.49 $10.69
====== ======
TOTAL RETURN(2) 0.12% 7.86% (3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $7,118 $163
Ratio of expenses to average net assets before
waivers and reimbursements 3.03% 32.61% (4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.35% 2.35% (4)
Ratio of net investment income (loss) to average net
assets (0.05%) (0.86%)(4)
Portfolio turnover rate(5) --- --- ---
</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.
70
<PAGE> 73
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</TABLE>
- --------------------
(1) Class C shares were first offered on July 31, 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.
71
<PAGE> 74
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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>
<S> <C>
CLASS A - PERIOD ENDED: 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
</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.
72
<PAGE> 75
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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.
CLASS B - PERIOD ENDED: 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
- --------------------
(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.
73
<PAGE> 76
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 9/30/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
</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.
74
<PAGE> 77
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.16 $11.53 $10.00
Net investment income (loss) 0.00 0.02
Net realized and unrealized gain (loss) on
investments 3.66 1.53
---- ----
Total from investment operations 3.66 1.55
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain on
investments (0.03) (0.02)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.03) (0.02)
------ ------
Net increase (decrease) in net asset value 3.63 1.53
Net asset value, end of period $15.16 $11.53
====== ======
TOTAL RETURN(2) 31.78% 15.50%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $65,763 $6,273
Ratio of expenses to average net assets before
waivers and reimbursements 1.64% 3.96%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.45% 1.45%(4)
Ratio of net investment income (loss) to average net
assets 0.06% 0.71%(4)
Portfolio turnover rate(5) 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.
75
<PAGE> 78
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.01 $11.50 $10.00
Net investment income (loss) (0.02) 0.00
Net realized and unrealized gain (loss) on
investments 3.56 1.52
---- ----
Total from investment operations 3.54 1.52
Less distributions:
Dividends from net investment income 0.00 0.00 (0.02)
Distributions from net realized gain on
investments (0.03) 0.00
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.03) (0.02)
------ -----
Net increase (decrease) in net asset value 3.51 1.50
Net asset value, end of period $15.01 $11.50
====== ======
TOTAL RETURN(2) 30.82% 15.20% (3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $35,294 $1,254
Ratio of expenses to average net assets before
waivers and reimbursements 2.38% 7.76% (4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.15% 2.15% (4)
Ratio of net investment income (loss) to average net
assets (0.66%) (0.12%)(4)
Portfolio turnover rate(5) --- --- ----
</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.
76
<PAGE> 79
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</TABLE>
- --------------------
(1) Class C shares were first offered on July 31, 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.
77
<PAGE> 80
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 4/30/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
</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.
78
<PAGE> 81
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 4/30/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
</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.
79
<PAGE> 82
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
Total from distributions -----
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</TABLE>
- --------------------
(1) Class C shares were first offered on July 31, 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.
80
<PAGE> 83
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $14.72 $11.45 $10.00
Net investment income (loss) 0.13 0.07
Net realized and unrealized gain (loss) on
investments 3.40 1.46
---- ----
Total from investment operations 3.53 1.53
Less distributions:
Dividends from net investment income (0.12) (0.06)
Distributions from net realized gain on
investments (0.14) (0.02)
Return of capital 0.000 (0.000 0.000
----- ------ -----
Total from distributions (0.26) (0.08)
------ ------
Net increase (decrease) in net asset value 3.27 1.45
Net asset value, end of period $14.72 $11.45
====== ======
TOTAL RETURN(2) 30.99% 15.29%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $67,861 $6,083
Ratio of expenses to average net assets before
waivers and reimbursements 1.59% 4.12%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.40% 1.40%(4)
Ratio of net investment income (loss) to average net
assets 1.42% 1.95%(4)
Portfolio turnover rate(5) 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.
81
<PAGE> 84
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $14.61 $11.40 $10.00
Net investment income (loss) 0.13 0.01
Net realized and unrealized gain (loss) on
investments 3.30 1.48
---- ----
Total from investment operations 3.43 1.49
Less distributions:
Dividends from net investment income 0.00 (0.08) (0.07)
Distributions from net realized gain on
investments (0.14) (0.02)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.22) (0.09)
------ ------
Net increase (decrease) in net asset value 3.21 1.40
Net asset value, end of period $14.61 $11.40
====== ======
TOTAL RETURN(2) 30.20% 14.82%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $33,741 $730
Ratio of expenses to average net assets before
waivers and reimbursements 2.34% 12.97%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.10% 2.10%(4)
Ratio of net investment income (loss) to average net
assets 0.69% 0.82%(4)
Portfolio turnover rate(5) --- --- ---
</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.
82
<PAGE> 85
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-
12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
-----
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) ---
</TABLE>
- --------------------
(1) Class C shares were first offered on July 31, 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.
83
<PAGE> 86
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.08 $10.00
Net investment income (loss) 0.16 0.09
Net realized and unrealized gain (loss) on
investments 2.41 1.07
---- ----
Total from investment operations 2.57 1.16
Less distributions:
Dividends from net investment income 0.00 (0.17) (0.08)
Distributions from net realized gain on
investments (0.07) 0.00
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.24) (0.08)
------ ------
Net increase (decrease) in net asset value 2.33 1.08
Net asset value, end of period $13.41 $11.08
====== ======
TOTAL RETURN(2) 23.30% 11.56%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $98,633 $14,347
Ratio of expenses to average net assets before
waivers and reimbursements 1.55% 2.94%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.40% 1.40%(4)
Ratio of net investment income (loss) to average net
assets 1.54% 2.13%(4)
Portfolio turnover rate(5) 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.
84
<PAGE> 87
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.05 $10.00
Net investment income (loss) 0.16 0.02
Net realized and unrealized gain (loss) on
investments 2.31 1.11
---- ----
Total from investment operations 2.47 1.13
Less distributions:
Dividends from net investment income 0.00 (0.12) (0.08)
Distributions from net realized gain on
investments (0.07) 0.00
Return of capital 0.000 0.000 0.000
----- ----- -----
Total from distributions (0.19) (0.08)
------ ------
Net increase (decrease) in net asset value 2.28 1.05
Net asset value, end of period $13.33 $11.05
====== ======
TOTAL RETURN(2) 22.44% 11.28%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $39,334 $1,499
Ratio of expenses to average net assets before
waivers and reimbursements 2.31% 6.71%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.10% 2.10%(4)
Ratio of net investment income (loss) to average net
assets 0.80% 1.24%(4)
Portfolio turnover rate(5) --- --- ---
</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.
85
<PAGE> 88
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
-----
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets
before waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) --
</TABLE>
- -----------------
(1) Class C shares were first offered on July 31, 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.
86
<PAGE> 89
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 9/30/98-12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
------
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets
before waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to
average net assets
Portfolio turnover rate(3)
</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.
87
<PAGE> 90
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 9/30/98-12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
------
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to
average net assets
Portfolio turnover rate(3)
</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.
88
<PAGE> 91
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 9/30/98-12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
------
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average
net assets
Portfolio turnover rate(3)
</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.
89
<PAGE> 92
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 10.26 $ 10.00
Net investment income (loss) 0.57 0.26
Net realized and unrealized gain (loss) on
investments 0.50 0.31
------- --------
Total from investment operations 1.07 0.57
Less distributions:
Dividends from net investment income 0.00 (0.56) (0.25)
Distributions from net realized gain on
investments (0.16) (0.06)
Return of capital 0.000 0.000 0.000
----- ------- --------
Total from distributions (0.72) (0.31)
------- --------
Net increase (decrease) in net asset value 0.35 0.26
Net asset value, end of period $ 10.61 $ 10.26
======= =======
TOTAL RETURN(2) 10.80% 5.73%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $28,589 $10,925
Ratio of expenses to average net assets before
waivers and reimbursements 1.44% 2.72%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.25% 1.25%(4)
Ratio of net investment income (loss) to average net
assets 5.59% 5.72%(4)
Portfolio turnover rate(5) 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.
90
<PAGE> 93
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.25 $10.00
Net investment income (loss) 0.53 0.20
Net realized and unrealized gain (loss) on
investments 0.46 0.34
---- ------
Total from investment operations 0.99 0.54
Less distributions:
Dividends from net investment income 0.00 (0.50) (0.23)
Distributions from net realized gain on
investments (0.16) (0.06)
Return of capital 0.000 0.000 0.000
----- ----- ------
Total from distributions (0.66) (0.29)
------ -------
Net increase (decrease) in net asset value 0.33 0.25
Net asset value, end of period $10.58 $10.25
====== ======
TOTAL RETURN(2) 9.96% 5.38%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $5,745 $ 124
Ratio of expenses to average net assets before
waivers and reimbursements 2.19% 22.36%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.95% 1.95%(4)
Ratio of net investment income (loss) to average net
assets 4.85% 5.22%(4)
Portfolio turnover rate(5) -- -- --
</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.
91
<PAGE> 94
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE Net
asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
-----
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average
net assets
Portfolio turnover rate(3) --
</TABLE>
- --------------
(1) Class C shares were first offered on July 31, 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.
92
<PAGE> 95
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 - PERIOD ENDED: 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 1.00 $ 1.00
Net investment income (loss) 0.05 0.02
Net realized and unrealized gain (loss) on
investments 0.00 0.00
------- -------
Total from investment operations 0.05 0.02
Less distributions:
Dividends from net investment income 0.00 (0.05) (0.02)
Distributions from net realized gain on
investments (0.00) 0.00
Return of capital 0.000 0.000 0.000
----- ------- -------
Total from distributions (0.05) (0.02)
-------- --------
Net increase (decrease) in net asset value 0.00 0.00
Net asset value, end of period $ 1.00 $ 1.00
======= =======
TOTAL RETURN(2) 4.73% 2.01%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $22,578 $10,754
Ratio of expenses to average net assets before
waivers and reimbursements 1.23% 2.70%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.00% 1.00%(4)
Ratio of net investment income (loss) to average net
assets 4.67% 4.49%(4)
Portfolio turnover rate(5) 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) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
93
<PAGE> 96
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 B - PERIOD ENDED: 12/31/98 8/22/97-12/31/97(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 1.00
Net investment income (loss) 0.01
Net realized and unrealized gain (loss) on
investments 0.00
------
Total from investment operations 0.01
Less distributions:
Dividends from net investment income 0.00 (0.01)
Distributions from net realized gain on
investments 0.00
Return of capital 0.00 0.00
---- ----
Total from distributions (0.01)
------
Net increase (decrease) in net asset value 0.00
Net asset value, end of period $ 1.00
======
TOTAL RETURN(2) 1.45%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $4,449
Ratio of expenses to average net assets before
waivers and reimbursements 3.63%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.70%(4)
Ratio of net investment income (loss) to average net
assets 3.92%(4)
Portfolio turnover rate(5) N/A N/A
</TABLE>
- -----------------
(1) Class B shares were first offered on August 22, 1997.
(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.
94
<PAGE> 97
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 C - PERIOD ENDED: 7/31/98-12/31/98(1)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.00
----
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3) --
</TABLE>
- --------------
(1) Class C shares were first offered on July 31, 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.
95
<PAGE> 98
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Includes financial statements and portfolio holdings. In the fund's annual
report you will 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. The current annual
report is included in the SAI.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (is legally a part of) this prospectus.
To request a free copy of the current annual/semiannual report or the SAI,
please contact the funds at:
BY MAIL:
The Hartford Mutual Funds
P.O. Box 8416
Boston, MA 02266-8416
BY PHONE:
1-888-THE-STAG (1-888-843-7824)
ON THE INTERNET:
www.thehartford.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
BY PHONE:
1-800-SEC-0330 (1-800-732-0330)
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
96
<PAGE> 99
HARTFORD MUTUAL FUNDS, INC.
CLASS Y SHARES
PROSPECTUS
MAY 1, 1999
As with all mutual funds, the Securities and Exchange Commission has not judged
whether these funds are good investments or whether the information in this
prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.
SMALL COMPANY FUND
CAPITAL APPRECIATION FUND
MIDCAP FUND
INTERNATIONAL OPPORTUNITIES FUND
GLOBAL LEADERS FUND
STOCK FUND
GROWTH AND INCOME FUND
DIVIDEND AND GROWTH FUND
ADVISERS FUND
HIGH YIELD FUND
BOND INCOME STRATEGY FUND
MONEY MARKET FUND
THE HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 8416
BOSTON, MA 02266-8416
<PAGE> 100
CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
A summary of each fund's The Hartford Small Company Fund 4
goals, strategies, risks,
performance and expenses. The Hartford Capital Appreciation Fund 7
The Hartford MidCap Fund 10
The Hartford International Opportunities Fund 13
The Hartford Global Leaders Fund 16
The Hartford Stock Fund 19
The Hartford Growth and Income Fund 22
The Hartford Dividend and Growth Fund 25
The Hartford Advisers Fund 28
The Hartford High Yield Fund 31
The Hartford Bond Income Strategy Fund 34
The Hartford Money Market Fund 37
Prior performance of similar funds 40
Description of additional Additional investment matters 42
investment strategies and
investment risks. Risks of investing in the funds 43
Information on your account. About your account 45
Opening an account 45
Buying shares 46
Selling shares 48
Transaction policies 50
Dividends and account policies 51
Additional investor services 52
Further information on Additional share classes 52
the funds.
Financial highlights 53
For more information back cover
</TABLE>
2
<PAGE> 101
INTRODUCTION
- --------------------------------------------------------------------------------
THE HARTFORD MUTUAL FUNDS, INC.
The Hartford Mutual Funds 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 FDIC or any other government agency. Because you could lose money by
investing in these funds, be sure to read all risk disclosure carefully before
investing.
THE MANAGEMENT FIRM
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.
THE 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 $211 billion in
assets.
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 with respect to
approximately $61.2 billion of assets for various clients.
3
<PAGE> 102
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
INVESTMENT GOAL AND STYLE. The Hartford Small Company Fund seeks growth of
capital by investing primarily in equity securities selected on the basis of
potential for capital appreciation.
The fund normally invests at least 65% of its total assets in equity
securities of companies with market capitalizations within the range represented
by the Russell 2000 Index. The fund may invest up to 20% of its total assets in
securities of non-U.S. companies.
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.
The fund is broadly diversified by industry and sector.
<TABLE>
-------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following
investment risks:
<S> <C> <C>
FUND CODES
- ---------- * Correlation risk * Natural event risk
CLASS Y * Derivatives risk * Opportunity risk
- ------- * International investments risk * Small company risk
Symbol HSCYX * Liquidity risk * Style risk
CUSIP 416645307 * Management risk * Valuation risk
* Market risk * Year 2000 risk
-------------------------------------------------------------
</TABLE>
4
<PAGE> 103
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The 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 distributions were reinvested. Keep in mind
that past performance does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 19.69%
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
<S> <C> <C>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
CLASS Y % %
INDEX % %
</TABLE>
INDEX: Russell 2000 Index, an unmanaged index of small company equity
securities that are similar, but not identical, to those in the fund's
portfolio.
- --------------------------------------------------------------------------------
The investment management fee paid by the fund for the 1998 fiscal year was
0.85%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
5
<PAGE> 104
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
CLASS Y
<S> <C>
Maximum sales charge (load) on purchases None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.85%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses (before reimbursements) (1) %
----
</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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
<S> <C>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
6
<PAGE> 105
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
MARK E. WATERHOUSE
* Vice President of Wellington Management
* Associate Manager of the fund since 1996
* Joined Wellington Management in 1995
* Investment professional since 1984
INVESTMENT GOAL AND STYLE. The Hartford Capital Appreciation Fund seeks
growth of capital by investing primarily in equity securities selected on the
basis of potential for capital appreciation.
The fund normally invests at least 65% of its total assets in equity
securities of small, medium and large companies. The fund may invest up to 20%
of its total assets in securities of non-U.S. 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 for a catalyst event
that will trigger stock price appreciation. fund since 1995.
In analyzing a prospective investment Wellington Management looks at a *
number 1974 of factors, such as business environment, management, balance sheet,
income statement, anticipated earnings, revenues, dividends and other related
measures of value.
FUND CODES
CLASS Y
Symbol HCAYX
CUSIP 416645604
- ---------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following
investment risks:
* Correlation risk * Natural event risk
* Derivatives risk * Opportunity risk
* International investments risk * Small company risk
* Liquidity risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
- ---------------------------------------------------------------------
7
<PAGE> 106
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The 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 distributions were reinvested. Keep in mind
that past performance does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 56.00%
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
The investment management fee paid by the fund for the 1998 fiscal year was
0.79%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
8
<PAGE> 107
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
<S> <C>
Maximum sales charge (load) on purchases None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.80%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses (before reimbursements) (1) %
----
</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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
<S> <C> <C>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
9
<PAGE> 108
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
INVESTMENT GOAL AND STYLE. The Hartford MidCap Fund seeks long-term
growth of capital by investing primarily in equity securities selected on the
basis of potential for capital appreciation.
The fund normally invests at least 65% of its total assets in equity
securities of companies with market capitalizations within the range represented
by the Standard & Poor's MidCap 400 Index. The fund may invest up to 20% of its
total assets in securities of non-U.S. companies.
The fund uses a two-tiered investment strategy:
* Using what is sometimes referred to as a "top down" approach,
Wellington Management analyzes the macro-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 secular and cyclical
changes and identifies industries and economic sectors that are
expected to grow faster than the overall economy.
* 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 since 1983 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.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS Y
Symbol
CUSIP 416645687
</TABLE>
- --------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
* Correlation risk * Natural event risk
* Derivatives risk * Opportunity risk
* International investments risk * Small company risk
* Liquidity risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
- ---------------------------------------------------------------------
10
<PAGE> 109
PAST PERFORMANCE. The bar chart and table below indicate the risks of
investing in the fund. The bar chart 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 distributions were reinvested. Keep in mind that past
performance does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 12/31/97)
<S> <C> <C>
CLASS Y % %
INDEX % %
</TABLE>
INDEX: Standard & Poor's MidCap 400 Index, an unmanaged index of equity
securities that are similar, but not identical, to those in the fund's
portfolio.
The investment management fee paid by the fund for the 1998 fiscal year was
0.85%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
<S> <C>
Maximum sales charge (load) on purchases None
Maximum deferred sales charge (load) None
</TABLE>
11
<PAGE> 110
<TABLE>
<CAPTION>
<S> <C>
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.85%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses (before reimbursements) (1) %
====
</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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
12
<PAGE> 111
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
INVESTMENT GOAL AND STYLE. The Hartford International Opportunities Fund
seeks growth of capital by investing primarily in equity securities issued by
non-U.S. companies.
The fund normally invests at least 65% of its assets in equity securities
issued by non-U.S. companies. The fund anticipates that, under normal market
conditions, it will diversify 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 and considers companies for inclusion in the fund's portfolio
that are typically larger, high quality companies that operate in
established markets. 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 looks for,
among other things, a strong balance sheet, attractive industry dynamics, strong
competitive advantages and attractive relative value within the context of a
security's primary trading market.
The fund may also invest on a limited basis in smaller companies and less
developed emerging markets.
RISK SUMMARY. The fund is subject to the following investment risks:
FUND CODES
13
<PAGE> 112
CLASS Y
Symbol HAOYX
CUSIP 416645885
* Correlation risk * Natural event risk
* Derivatives risk * Opportunity risk
* International investments risk * Small company risk
* Liquidity risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The 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 distributions were reinvested. Keep in mind
that past performance does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 1.31%
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
INDEX % %
</TABLE>
14
<PAGE> 113
INDEX: Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP") Index,
an unmanaged index of equity securities that are similar, but not identical, to
those in the fund's portfolio.
The investment management fee paid by the fund for the 1998 fiscal year was
0.85%
-------------------------------------------------
YOUR EXPENSES. The shareholder transaction expenses are charged directly to your
account. The annual operating expenses are paid from the fund's assets and are
therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
<S> <C>
Maximum sales charge (load) on purchases None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.85%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
Total operating expenses (before reimbursements) (1) %
</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.
The hypothetical example below shows what your expense would be if you
invested $10,000 over the time frames indicated, assuming you reinvested
all distributions and that the average return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and
returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
15
<PAGE> 114
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
INVESTMENT GOAL AND STYLE. The Hartford Global Leaders Fund seeks growth of
capital by investing primarily in equity securities issued by U.S. companies and
non-U.S. companies.
The fund invests primarily in a diversified portfolio of equity securities
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 equity securities 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 may invest up to 25% of its assets in
securities of issuers located in emerging market countries.
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 secular and cyclical
changes 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.
16
<PAGE> 115
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS Y
Symbol
CUSIP 416645497
</TABLE>
- ---------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following
investment risks:
* Correlation risk * Natural event risk
* Derivatives risk * Opportunity risk
* International investments risk * Small company risk
* Liquidity risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
- ---------------------------------------------------------------------
PAST PERFORMANCE. The table below indicates the risks of investing in the
fund and shows the fund's performance over time (along with that of a
broad-based market index for reference). The table does not include the effect
of sales charges as no sales charges apply to the Class Y shares. All figures
assume that all distributions were reinvested. Keep in mind that past
performance does not indicate future results.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
LIFE OF FUND
(SINCE 9/30/98)
<S> <C> <C>
CLASS Y %
INDEX %
</TABLE>
INDEX: MSCI World Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
The fund pays the following
investment management fees on
average daily net assets:
<TABLE>
<S> <C>
Net Asset Value Annual Rate
- ------------------ -----------
First $500 million 0.85%
Next $500 million 0.75%
Over $1 billion 0.70%
</TABLE>
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
Maximum sales charge (load) on purchases None
</TABLE>
17
<PAGE> 116
<TABLE>
<CAPTION>
<S> <C>
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.85%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses (before
reimbursements) (1) %
----
</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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you reinvested
all distributions and that the average return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and
returns, either past or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
18
<PAGE> 117
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
INVESTMENT GOAL AND STYLE. The Hartford Stock Fund seeks long-term growth
of capital, with income as a secondary consideration, by investing primarily in
equity securities.
The fund normally invests at least 65% of the fund's total assets in
stocks. The fund may invest up to 20% of its total assets in securities of
non-U.S. companies. 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 macroeconomic 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 secular and cyclical changes and identifies industries and
economic sectors that are expected to grow faster than the
* Top down analysis is followed by overall economy. 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. 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, sustainable or increasing dividends, a strong management team and a
globally competitive position.
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.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS Y
Symbol HASYX
CUSIP 416645851
</TABLE>
- --------------------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
* Correlation risk * Natural event risk
* Derivatives risk * Opportunity risk
* International investments risk * Small company risk
* Liquidity risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
- --------------------------------------------------------------------------------
19
<PAGE> 118
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The 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 distributions were reinvested. Keep in mind
that past performance does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 32.33%
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS - FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C> <C>
CLASS Y % %
INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
The investment management fee paid by the fund for the 1998 fiscal year was
0.80%
- --------------------------------------------------------------------------------
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
<S> <C>
Maximum sales charge on purchases (load) None
</TABLE>
20
<PAGE> 119
<TABLE>
<CAPTION>
<S> <C>
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.80%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses (before
reimbursements) (1) %
----
</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.
The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
21
<PAGE> 120
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
INVESTMENT GOAL. The Hartford Growth and Income Fund seeks growth of
capital and current income by investing primarily in equity securities with
earnings growth potential and steady or rising dividends.
The fund invests primarily in a diversified portfolio of equity securities
that typically have steady or rising dividends and whose prospects for capital
appreciation are considered favorable by Wellington Management. The fund may
invest up to 20% of its total assets in securities of non-U.S. 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, dividends and other
related measures of value.
Wellington Management then uses proprietary quantitative techniques to
affirm its fundamental evaluation of a security. These quantitative techniques
consist of: valuation analysis, which includes the use of a dividend discount
model and cash flow analysis, and momentum analysis, which includes an
assessment of a company's earnings momentum and stock price momentum. These
quantitative techniques seek to identify those securities that are: attractive
from the fundamental perspective, inexpensive based on the quantitative
valuation factors, and timely according to the quantitative momentum factors.
The fund's portfolio is broadly diversified by industry and company.
<TABLE>
<CAPTION>
<S> <C>
FUND CODES
CLASS Y
Symbol
CUSIP 416645653
</TABLE>
- --------------------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
* Correlation risk * Natural event risk
* Derivatives risk * Opportunity risk
* International investments risk * Small company risk
* Liquidity risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
- --------------------------------------------------------------------------------
22
<PAGE> 121
PAST PERFORMANCE. The table below indicates the risks of investing in the
fund and shows the fund's performance over time (along with that of a
broad-based market index for reference). The table does not include the effect
of sales charges as no sales charges apply to the Class Y shares. All figures
assume that all distributions were reinvested. Keep in mind that past
performance does not indicate future results.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
LIFE OF FUND
(SINCE 4/30/98)
CLASS Y %
INDEX %
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
The fund pays the following investment management fees on average daily net
assets:
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
<S> <C>
First $500 million 0.80%
Next $500 million 0.70%
Over $1 billion 0.65%
</TABLE>
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
<S> <C>
Maximum sales charge (load) on purchases None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.80%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses (before reimbursements) (1) %
----
</TABLE>
23
<PAGE> 122
(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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
24
<PAGE> 123
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
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 equity securities.
The fund invests primarily in a diversified portfolio of equity securities
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 may invest up to 20% of
its total assets in securities of non-U.S. 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.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS Y
Symbol HDGYX
CUSIP 416645828
</TABLE>
--------------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
* Correlation risk * Natural event risk
* Derivatives risk * Opportunity risk
* International investments risk * Small company risk
* Liquidity risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
---------------------------------------------------------------------------
25
<PAGE> 124
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The 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 distributions were reinvested. Keep in mind
that past performance does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 31.59%
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities that are
similar, but not identical, to those in the fund's portfolio.
The investment management fee paid by the fund for the 1998 fiscal year was
0.75%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
<S> <C>
Maximum sales charge (load) on purchases None
</TABLE>
26
<PAGE> 125
Maximum deferred sales
charge (load) None
Exchange None
ANNUAL OPERATING EXPENSES
Management fees 0.75%
12b-1 distribution and
service fees None
Other expenses (before
reimbursements) (1) %
----
Total operating expenses
(before reimbursements) (1) %
----
(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.
The hypothetical example below shows what
your expenses would be if you invested
$10,000 over the time frames indicated,
assuming you reinvested all distributions
and that the average return was 5%. The
example is for comparison only, and does not
represent the fund's actual expenses and
returns, either past or future.
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
27
<PAGE> 126
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
INVESTMENT GOAL AND STYLE. The Hartford Advisers Fund seeks maximum
long-term total return by investing in common stocks and other equity
securities, bonds and other debt securities and money market instruments.
The fund actively allocates its assets among three categories:
* equity securities
* debt securities and
* money market instruments.
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. The fund may invest up to 20% of its total assets in securities of
non-U.S. companies.
The fund's investments in equity securities and securities that are
convertible into equity securities are substantially similar to the investments
permitted for the Stock Fund.
The debt securities in which the fund may invest include securities
issued or guaranteed by the U.S. Government and its agencies or
instrumentalities, securities rated investment grade, or if unrated, securities
deemed by Wellington Management to be professional of comparable quality.
<TABLE>
<CAPTION>
FUND CODES
<S> <C>
CLASS Y
Symbol IHAYX
CUSIP 416645786
</TABLE>
--------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
* Correlation risk * Market risk
* Credit risk * Natural event risk
* Derivatives risk * Opportunity risk
* Interest rate risk * Small company risk
* International investments risk * Style risk
* Liquidity risk * Valuation risk
* Management risk * Year 2000 risk
--------------------------------------------------------------------
28
<PAGE> 127
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The year-by-year figures do not include the effect of sales charges;
the average annual figures do. All figures assume that all distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 23.80%
1998
</TABLE>
BEST QUARTER: up ____%, ________ quarter 199__
WORST QUARTER: down ____%, ________ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS - FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
S&P 500 % %
LGCB % %
</TABLE>
INDICES: S&P 500 Index and the Lehman Government Corporate Bond Index,
unmanaged indices of securities that are similar, but not identical, to those in
the fund's portfolio.
The investment management fee paid by the fund for the 1998 fiscal
year was 0.75%
- --------------------------------------------------------------------------------
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION CLASS Y
EXPENSES
<S> <C>
</TABLE>
29
<PAGE> 128
<TABLE>
<CAPTION>
<S> <C>
Maximum sales charge (load) on purchases None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.75%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses before reimbursements) (1) %
----
</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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION> EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
30
<PAGE> 129
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
INVESTMENT GOAL AND STYLE. The Hartford High Yield Fund seeks high current
income by investing in non-investment grade fixed-income 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 fixed income securities (securities rated "Ba"
or lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or lower by
Standard and Poors 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 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, but
not more than 10% of its total assets in securities issued in non-U.S.
currencies (including the European Currency Unit and its successor, the Euro).
Securities hedged back into the U.S. dollar are not included in this 10%
restriction. The fund may also invest in non-U.S. debt securities of issuers
located in emerging markets.
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 fund looks at financial condition of
the issuers as well as the collateralization and other aspects of the securities
themselves.
FUND CODES
- ----------
CLASS Y
- -------
Symbol
CUSIP 416645455
- --------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
* Correlation risk * Management risk
* Credit risk * Market risk
* Derivatives risk * Natural event risk
* Interest rate risk * Opportunity risk
* International investments risk * Style risk
* Liquidity risk * Valuation risk
* Year 2000 risk
- --------------------------------------------------------------------
31
<PAGE> 130
PAST PERFORMANCE. The table below indicates the risks of investing in the
fund and shows the fund's performance over time (along with that of a
broad-based market index for reference). The table does not include the effect
of sales charges as no sales charges apply to the Class Y shares. All figures
assume that all distributions were reinvested. Keep in mind that past
performance does not indicate future results.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
LIFE OF FUND
(SINCE 9/30/98)
CLASS Y %
INDEX %
INDEX: Lehman High Yield Corporate Index, an unmanaged index of high yield
fixed income securities that are similar, but not identical, to those in the
fund's portfolio.
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
The fund pays the following investment management fees on average daily net
assets:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
------------------ -----------
<S> <C>
First $500 million 0.75%
Next $500 million 0.65%
Over $1 billion 0.60%
</TABLE>
- --------------------------------------------------------------------------------
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Y
<S> <C>
Maximum sales charge (load) on purchases None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.75%
12b-1 distribution and service fees None
Other expenses (before reimbursements) (1) %
----
Total operating expenses (before reimbursements) (1) %
----
</TABLE>
32
<PAGE> 131
(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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
33
<PAGE> 132
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
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.
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 or "BB+", "BB" or "BB-" by S&P), 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. 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 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 looks at financial
condition of the issuers as well as the collateralization and other aspects of
the securities themselves.
FUND CODES
- ----------
CLASS Y
- -------
Symbol HABYX
CUSIP 416645752
-------------------------------------------------------------------
RISK SUMMARY. The fund is subject to the following investment risks:
* Correlation risk * Management risk
* Credit risk * Market risk
* Derivatives risk * Natural event risk
* Interest rate risk * Opportunity risk
* International investments risk * Style risk
* Liquidity risk * Valuation risk
* Year 2000 risk
-------------------------------------------------------------------
34
<PAGE> 133
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 underneath the graph shows the fund's performance
over time (along with that of a broad-based market index for reference). The
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 distributions were reinvested. Keep in mind that past
performance does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 11.30%
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
CLASS Y % %
INDEX % %
INDEX: Lehman Government Corporate Bond Index, an unmanaged index of
fixed-income securities that are similar, but not identical, to those in the
fund's portfolio.
The investment management fee paid by the fund for the 1998 fiscal year was
0.65%
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
SHAREHOLDER TRANSACTION CLASS Y
EXPENSES
35
<PAGE> 134
Maximum sales charge
(load) on purchases None
Maximum deferred sales
charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
Management fees 0.65%
12b-1 distribution and
service fees None
Other expenses (before
reimbursements) (1) %
----
Total operating expenses
(before reimbursements) (1) %
----
(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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>
36
<PAGE> 135
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
WILLIAM H. DAVISON
* Senior Vice President of HIMCO
* Manager of the fund since inception (1996)
* Joined HIMCO in 1990
* Investment professional since 1981
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 securities issued by corporations
and financial institutions. 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.
FUND CODES
- ----------
CLASS Y
- -------
Symbol HAYXX
CUSIP 416645729
- --------------------------------------------------------------------------------
RISK SUMMARY. 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, it
is possible to lose money by investing in the fund. In addition, the fund is
subject to the following risks:
* Credit risk * Opportunity risk
* Interest rate risk * Style risk
* Management risk * Valuation risk
* Market risk * Year 2000 risk
* Natural risk
- --------------------------------------------------------------------------------
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 underneath the graph shows the fund's
performance over time (along with that of a broad-based market index for
reference). The 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 distributions were reinvested. Keep in mind
that past performance does not indicate future results.
37
<PAGE> 136
- -------------------------------------------------------------------------------
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
[BAR GRAPH]
<TABLE>
<S> <C>
1997 5.23%
1998
</TABLE>
BEST QUARTER: up ___%, ____ quarter 199__
WORST QUARTER: down ___%, ____ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
INDEX % %
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term
treasury bills that are similar, but not identical, to those in the fund's
portfolio.
Current 7-day yield as of December 31, 1998: ______%
Effective 7-day yield as of December 31, 1998: ______%
Please call 1-888-THE-STAG for the most recent current and effective yield
information.
The investment management fee paid by the fund for the 1998 fiscal year was
0.50%
- --------------------------------------------------------------------------------
YOUR EXPENSES. The shareholder transaction expenses are charged directly to
your account. The annual operating expenses are paid from the fund's assets and
are therefore paid by shareholders indirectly.
SHAREHOLDER TRANSACTION CLASS Y
EXPENSES
Maximum sales charge
(load) on purchases None
Maximum deferred sales
charge (load) None
Exchange fees None
38
<PAGE> 137
ANNUAL OPERATING EXPENSES
Management fees 0.50%
12b-1 distribution and
service fees None
Other expenses (before
reimbursements) (1) %
----
Total operating expenses
(before reimbursements) (1) %
----
(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.
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average return was 5%. The example is for comparison
only, and does not represent the fund's actual expenses and returns, either past
or future.
<TABLE>
<CAPTION>
EXPENSES CLASS Y
(WITH/WITHOUT REDEMPTION)
<S> <C> <C>
Year 1 $ $
Year 3 $ $
Year 5 $ $
Year 10 $ $
</TABLE>.
39
<PAGE> 138
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because the mutual funds began operations in July, 1996 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.
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. [TO BE
UPDATED AS OF 12/31/98 - WHOLE DOLLARS]
Fund Corresponding HLS Fund
- ---- ----------------------
Capital Appreciation Hartford Capital Appreciation HLS Fund, Inc.
(July 22, 1996) (April 2, 1984)
$ $
International Opportunities Hartford International Opportunities HLS Fund, Inc.
(July 22, 1996) (July 2, 1990)
$ $
Stock Hartford Stock HLS Fund, Inc.
(July 22, 1996) (August 31, 1977)
$ $
Dividend and Growth Hartford Dividend and Growth HLS Fund, Inc.
(July 22, 1996) (March 8, 1994)
$ $
Advisers Hartford Advisers HLS Fund, Inc.
(July 22, 1996) (March 31, 1983)
$ $
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,
40
<PAGE> 139
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.
[THE FOLLOWING TABLE IS TO BE UPDATED AS OF 12/31/98]
10 Years or
HLS Fund 1 Year 3 Years 5 Years Since Inception
-------- ------ ------- ------- ---------------
Hartford Capital Appreciation
HLS Fund, Inc.
Hartford International
Opportunities HLS Fund, Inc.
Hartford Stock HLS Fund, Inc.
Hartford Dividend and Growth
HLS Fund, Inc.
Hartford Advisers HLS Fund, Inc.
41
<PAGE> 140
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
(other than the Money Market 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.
42
<PAGE> 141
RISKS OF INVESTING IN THE FUNDS
- --------------------------------------------------------------------------------
The funds are subject to the following investment risks:
CORRELATION RISK The risk that changes in the value of a hedging
instrument will not match those of the asset being hedged (hedging is the use of
one investment to offset the effects of another investment). Incomplete
correlation can result in unanticipated risks.
CREDIT RISK The risk that the issuer of a security, or the counterparty
to a contract, will have its credit rating downgraded, default or otherwise
become unable to honor a financial obligation. This risk is higher for junk
bonds.
DERIVATIVES RISK When a derivative (a security whose value is based on
another security or index) is used as a hedge against an opposite position that
the fund also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa. While
hedging can reduce or eliminate losses, it can also reduce or eliminate gains.
To the extent that a derivative is not used as a hedge, the fund is directly
exposed to the potential gains and losses of that derivative. Gains and losses
from non-hedging derivative positions may be substantially greater than the
derivative's original cost.
INTEREST RATE RISK The risk of market losses attributable to increases
in interest rates. With fixed-rate securities (such as bonds), a rise in
interest rates typically causes a fall in values, while a fall in rates
typically causes a rise in values. Generally speaking, a fixed-rate security
with longer maturity is more sensitive to interest rate changes than a similar
security of shorter maturity.
INTERNATIONAL INVESTMENT RISKS Investments in foreign markets involve
special risks and considerations. Some of these factors are also present when
investing in the United States but are heightened when investing in non-US
markets and especially emerging markets. For example, these risks may include
political and economic instability, differing accounting and financial reporting
standards or inability to obtain reliable financial information regarding a
company's balance sheet and operations.
In addition, international investors may experience higher commission
rates on foreign portfolio transactions, potential adverse changes in tax and
exchange control regulations, the potential for restrictions on the flow of
international capital, and potential adverse effects from the transition to the
euro in European Monetary Union countries. Many foreign countries impose
withholding taxes on income from investments in such countries, which a fund may
not be able to recover. Also, changes in the exchange rates between the US
dollar and foreign currencies may have a negative impact on investments
denominated in foreign currencies, for example, by eroding or reversing gains or
widening losses from those investments. These risks are common to all mutual
fund investing in international securities.
LIQUIDITY RISK The risk that certain securities may be difficult or
impossible to sell at the time and the price that the seller would like,
especially in down markets. The seller may have to lower the price, sell other
securities instead, or forego an investment opportunity, any of which could have
a negative effect on fund management or performance. Common to all mutual funds.
43
<PAGE> 142
MANAGEMENT RISK The risk that a strategy used by the fund's management
may fail to produce the intended result. Common to all mutual funds.
MARKET RISK The risk that the market value of a security may move up
and down, sometimes rapidly and unpredictably. Market risk may affect a single
issuer, an industry, a sector or the stock or bond market as a whole. Common to
all stocks and bonds and the mutual funds that invest in them.
NATURAL EVENT RISK The risk of losses attributable to natural
disasters, crop failures and similar events. Common to all mutual funds.
OPPORTUNITY RISK The risk of missing out on an investment opportunity
because the assets necessary to take advantage of it are tied up in less
advantageous investments. Common to all mutual funds.
SMALL COMPANY RISK The risks of securities of small capitalization
companies, which typically include issuers with less experience and shorter
operating histories. These investments may be more speculative than investments
in larger or better established companies. Other risks associated with smaller
or newer companies include less publicly-available information about the
company, and the normal risks which accompany the development of new products,
markets or services.
STYLE RISK The risk that a portfolio's investment style may not produce
favorable results relative to market trends. Common to all mutual funds.
VALUATION RISK The risk that the fund has valued certain of its
securities at a higher price than it can sell them for. Common to all mutual
funds.
YEAR 2000 RISK The risk that the funds' operations could be disrupted
by year 2000 computer system problems. Although the adviser and the funds'
service providers are taking steps to address this issue, there may still be
some risk of adverse effects. If the issuers of securities in a fund's portfolio
have year 2000 problems, these securities could go down in value. Common to all
mutual funds.
44
<PAGE> 143
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: (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, carefully
following the instructions. If you have questions, please contact your
financial representative or call the transfer agent at the number shown
below.
4 Complete the appropriate parts of the account privileges application.
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.
5 Make your initial investment selection.
45
<PAGE> 144
BUYING SHARES
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
BY CHECK
* Make out a check for the investment amount, payable to "The Hartford
Mutual Funds, Inc."
* Deliver the check and your completed application to your financial
representative, or mail to the address listed below.
BY EXCHANGE
* Call your financial representative, plan administrator or the transfer
agent to request an exchange. The minimum exchange amount is $500 per
fund.
BY WIRE
* Deliver your completed application to your financial representative, or
mail it to the address below.
* Obtain your account number by calling your financial representative or
the phone number below.
* Instruct your bank to wire the amount of your 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
* See "By Wire" and "By Exchange"
ADDING TO AN ACCOUNT
BY CHECK
* Make out a check for the investment amount, payable to "The Hartford
Mutual Funds, Inc."
* Fill out the detachable investment slip from an account statement. If
no slip is available, 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, plan administrator or the transfer
agent to request an exchange. The minimum exchange amount is $500 per
fund.
BY WIRE
* Instruct your bank to wire the amount of your investment to:
State Street Bank and Trust Company
Account # 9905-205-2
Routing # 011000028
Specify the fund name, your share class, your account number and the
name(s) in which the account is registered. Your bank may charge a fee
to wire funds.
BY PHONE
* Verify that your bank or credit union is a member of the Automated
Clearing House (ACH) system.
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
46
<PAGE> 145
* Complete the "Telephone Exchanges and Telephone Redemption" and "Bank
Account or Credit Union Information" sections on your account
application.
* Call the transfer agent 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.
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
47
<PAGE> 146
SELLING SHARES
- --------------------------------------------------------------------------------
BY LETTER
* Write a letter of instruction or complete a stock power 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
* 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
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" and "Bank
Account or Credit Union Information" sections of your new account
application.
* Call the transfer agent 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 exchanging
by calling your financial representative or the transfer agent.
* Call your financial representative or the transfer agent to request an
exchange.
SELLING SHARES IN WRITING 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
ADDRESS: PHONE NUMBER:
The Hartford Mutual Funds 1-888-THE-STAG (1-888-843-7824)
P.O. Box 8416
Boston, MA 02266-8415 Or contact your financial representative
for instructions and assistance.
48
<PAGE> 147
* 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.
49
<PAGE> 148
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 (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 if reliable market prices are unavailable. The Money Market
Fund's assets are valued at amortized cost.
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 accepted 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.
To protect the interests of other investors in the fund, each fund reserves the
right to reject or restrict any specific exchange request, if in the opinion of
the fund, the investor is engaging in a pattern of market timing. The fund
defines market timing as making six or more exchanges per calendar year where
any one exchange represents shares equal in value to more than 3% of the fund's
total assets. Accounts under common ownership or control, including accounts
administered by market timers, will be aggregated for purposes of this
definition.
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.
50
<PAGE> 149
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. 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.
51
<PAGE> 150
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.
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.
52
<PAGE> 151
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96-12/31/96(1)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $12.24 $10.71 $10.00
Net investment income (loss) (0.01) 0.00
Net realized and unrealized gain (loss) on
investments 2.09 1.43
------ ------
Total from investment operations 2.08 1.43
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain on
investments (0.55) (0.72)
Return of capital 0.000 0.000 0.000
------ ------ -------
Total from distributions (0.55) (0.72)
------ -------
Net increase (decrease) in net asset value 1.53 0.71
Net asset value, end of period $12.24 $10.71
====== ======
TOTAL RETURN 19.69% 14.41%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $9,062 $72
Ratio of expenses to average net assets before
waivers and reimbursements 1.30% 115.33%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net
assets (0.14%) 0.03%(3)
Portfolio turnover rate(4) 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.
53
<PAGE> 152
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $20.05 $ 13.38 $ 10.00
Net investment income (loss) (0.03) 0.00
Net realized and unrealized gain (loss) on
investments 7.47 3.79
------ -------- --------
Total from investment operations 7.44 3.79
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain on
investments (0.77) (0.41)
Return of capital 0.000 0.000 0.000
------ -------- --------
Total from distributions (0.77) (0.41)
-------- -------
Net increase (decrease) in net asset value 6.67 3.38
Net asset value, end of period $ 20.05 $ 13.38
======== =======
TOTAL RETURN 56.00% 37.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $29,693 $107
Ratio of expenses to average net assets before
waivers and reimbursements 1.13% 93.64%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net
assets (0.35%) 0.04%(3)
Portfolio turnover rate(4) 119.61% 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.
54
<PAGE> 153
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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)
PER SHARE OPERATING PERFORMANCE
<S> <C>
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
------
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(2)
</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.
55
<PAGE> 154
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $10.62 $10.73 $10.00
Net investment income (loss) 0.15 0.00
Net realized and unrealized gain (loss) on
investments (0.02) 0.84
------- -------
Total from investment operations 0.13 0.84
Less distributions:
Dividends from net investment income 0.00 (0.07) (0.08)
Distributions from net realized gain on
investments (0.17) (0.03)
Return of capital 0.000 0.000 0.000
------ ------- -------
Total from distributions (0.24) (0.11)
------- -------
Net increase (decrease) in net asset value (0.11) 0.73
Net asset value, end of period $10.62 $10.73
======= =======
TOTAL RETURN 1.31% 8.36%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $6,422 $64
Ratio of expenses to average net assets before
waivers and reimbursements 1.76% 126.52%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 1.20% 1.20%(3)
Ratio of net investment income (loss) to average net
assets 1.33% 0.57%(3)
Portfolio turnover rate1(4) 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.
56
<PAGE> 155
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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)
PER SHARE OPERATING PERFORMANCE
<S> <C>
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
-------
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN1(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
</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.
57
<PAGE> 156
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $15.25 $11.55 $10.00
Net investment income (loss) 0.03 0.01
Net realized and unrealized gain (loss) on
investments 3.70 1.57
------- -------
Total from investment operations 3.73 1.58
Less distributions:
Dividends from net investment income 0.00 0.00 (0.03)
Distributions from net realized gain on
investments (0.03) 0.00
Return of capital 0.000 0.000 0.000
------- ------- -------
Total from distributions (0.03) (0.03)
------- -------
Net increase (decrease) in net asset value 3.70 1.55
Net asset value, end of period $15.25 $11.55
======= =======
TOTAL RETURN 32.33% 15.80%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $5,510 $ 44
Ratio of expenses to average net assets before
waivers and reimbursements 1.11% 133.50%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net
assets 0.53% 1.37%(3)
Portfolio turnover rate(4) 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.
58
<PAGE> 157
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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)
PER SHARE OPERATING PERFORMANCE
<S> <C>
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
-----
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
</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.
59
<PAGE> 158
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $14.77 $ 11.46 $ 10.00
Net investment income (loss) 0.21 0.02
Net realized and unrealized gain (loss) on
investments 3.39 1.53
------- -------
Total from investment operations 3.60 1.55
Less distributions:
Dividends from net investment income (0.15) (0.07)
Distributions from net realized gain on
investments (0.14) (0.02)
Return of capital 0.000 (0.000 0.000
------- ------- -------
Total from distributions (0.29) (0.09)
------- -------
Net increase (decrease) in net asset value 3.31 1.46
Net asset value, end of period $ 14.77 $ 11.46
======= =======
TOTAL RETURN 31.59% 15.49%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $13,241 $ 36
Ratio of expenses to average net assets before
waivers and reimbursements 1.09% 141.53%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net
assets 1.83% 2.41%(3)
Portfolio turnover rate(4) 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.
60
<PAGE> 159
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $13.46 $ 11.10 $ 10.00
Net investment income (loss) 0.31 0.03
Net realized and unrealized gain (loss) on
investments 2.32 1.16
------- -------
Total from investment operations 2.63 1.19
Less distributions:
Dividends from net investment income 0.00 (0.20) (0.09)
Distributions from net realized gain on
investments (0.07) 0.00
Return of capital 0.000 0.000 0.000
------ ------- -------
Total from distributions (0.27) (0.09)
------- -------
Net increase (decrease) in net asset value 2.35 1.10
Net asset value, end of period $ 13.46 $ 11.10
======= =======
TOTAL RETURN 23.80% 11.88%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $39,773 $ 34
Ratio of expenses to average net assets before
waivers and reimbursements 1.03% 144.82%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net
assets 2.08% 2.75%(3)
Portfolio turnover rate(4) 38.62% 19.75%(2)
</TABLE>
HARTFORD HIGH YIELD FUND
- ----------------------------
(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.
61
<PAGE> 160
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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.
CLASS Y - PERIOD ENDED: 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Net investment income (loss)
Net realized and unrealized gain (loss) on
investments
Total from investment operations
Less distributions:
Dividends from net investment income 0.00
Distributions from net realized gain on
investments
Return of capital 0.000
-------
Total from distributions
Net increase (decrease) in net asset value
Net asset value, end of period
TOTAL RETURN(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)
Ratio of expenses to average net assets before
waivers and reimbursements
Ratio of expenses to average net assets after
waivers and reimbursements
Ratio of net investment income (loss) to average net
assets
Portfolio turnover rate(3)
- ----------------------------
(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.
62
<PAGE> 161
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $10.64 $ 10.27 $ 10.00
Net investment income (loss) 0.58 0.28
Net realized and unrealized gain (loss) on
investments 0.54 0.31
------- -------
Total from investment operations 1.12 0.59
Less distributions:
Dividends from net investment income 0.00 (0.59) (0.26)
Distributions from net realized gain on
investments (0.16) (0.06)
Return of capital 0.000 0.000 0.000
------- ------- -------
Total from distributions (0.75) (0.32)
------- -------
Net increase (decrease) in net asset value 0.37 0.26
Net asset value, end of period $ 10.64 $ 10.27
======= =======
TOTAL RETURN 11.30% 5.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 4,756 $ 5
Ratio of expenses to average net assets before
waivers and reimbursements 1.01% 185.34%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.80% 0.80(3)
Ratio of net investment income (loss) to average net
assets 5.98% 6.17%(3)
Portfolio turnover rate(4) 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.
63
<PAGE> 162
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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: 12/31/98 12/31/97 7/1/96
-12/31/96(1)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $1.00 $ 1.00 $1.00
Net investment income (loss) 0.05 0.02
Net realized and unrealized gain (loss) on
investments 0.00 0.00
------- ---------
Total from investment operations 0.05 0.02
Less distributions:
Dividends from net investment income 0.00 (0.05) (0.02)
Distributions from net realized gain on
investments (0.00) 0.00
Return of capital 0.000 0.000 0.000
------ ------- ---------
Total from distributions (0.05) (0.02)
------- ---------
Net increase (decrease) in net asset value 0.00 0.00
Net asset value, end of period $ 1.00 $ 1.00
======= =========
TOTAL RETURN 5.23% 2.34%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $2,638 $ 0.3
Ratio of expenses to average net assets before
waivers and reimbursements 0.82% 3496.38%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.55% 0.55%(3)
Ratio of net investment income (loss) to average net
assets 5.13% 4.56%(3)
Portfolio turnover rate(4) 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.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
64
<PAGE> 163
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Includes financial statements and portfolio holdings. In the fund's annual
report you will 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. The
current annual report is included in the SAI.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (is legally a part of) this prospectus.
To request a free copy of the current annual/semiannual report or the SAI,
please contact the funds at:
BY MAIL:
The Hartford Mutual Funds
P.O. Box 8416
Boston, MA 02266-8416
BY PHONE:
1-888-THE-STAG (1-888-843-7824)
ON THE INTERNET:
www.thehartford.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
BY PHONE:
1-800-SEC-0330 (1-800-732-0330)
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> 164
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
<PAGE> 165
TABLE OF CONTENTS PAGE
GENERAL INFORMATION............................................................3
INVESTMENT OBJECTIVES AND POLICIES.............................................3
MANAGEMENT OF THE COMPANY.....................................................18
INVESTMENT ADVISORY ARRANGEMENTS..............................................25
FUND EXPENSES.................................................................28
DISTRIBUTION ARRANGEMENTS.....................................................28
DISTRIBUTION FINANCING PLANS..................................................31
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................33
DETERMINATION OF NET ASSET VALUE..............................................35
PURCHASE AND REDEMPTION OF SHARES.............................................36
INVESTMENT PERFORMANCE........................................................40
TAXES.........................................................................49
PRINCIPAL UNDERWRITER.........................................................54
CUSTODIAN.....................................................................54
TRANSFER AGENT SERVICES.......................................................54
INDEPENDENT PUBLIC ACCOUNTANTS................................................54
OTHER INFORMATION.............................................................54
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS.................................54
APPENDIX......................................................................55
<PAGE> 166
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") 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 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
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<PAGE> 167
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.
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,
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<PAGE> 168
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.
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.
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<PAGE> 169
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
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.
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.
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.
REVERSE REPURCHASE AGREEMENTS
-6-
<PAGE> 170
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 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.
-7-
<PAGE> 171
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 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
-8-
<PAGE> 172
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 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
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<PAGE> 173
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.
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.
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
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<PAGE> 174
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.
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.
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
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<PAGE> 175
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 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.
In addition, 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. Aggregates are
composites of equity or debt securities that are not tied to a commonly known
index. An index is
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<PAGE> 176
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 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 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 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
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<PAGE> 177
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, the "in-the-money" amount of
such options 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 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.
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<PAGE> 178
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.
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.
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<PAGE> 179
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.
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
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<PAGE> 180
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.
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).
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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.
NAME, ADDRESS, AGE AND POSITION WITH THE FUND
JOSEPH ANTHONY BIERNAT (age 71)
Director
30 Hurdle Fence Drive
Avon, CT 06001
Mr. Biernat served as Senior Vice President and Treasurer of United Technologies
Corporation from 1984 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
27 Buckingham Lane
West Hartford, CT 06117
Ms. Coleman has served as President of Saint Joseph College since 1991. She is a
Director of LeMoyne 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 and President
55 Farmington Avenue
Hartford, CT 06105
Mr. Gareau serves as President and Chief Investment Officer of HIMCO. Previously
he served as Executive 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.
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<PAGE> 182
WILLIAM ATCHISON O'NEILL (age 68)
Director
Box 360
East Hampton, CT 06424
The Honorable William A. O'Neill served as Governor of the State of Connecticut
from 1980 until 1991. He is presently retired.
MILLARD HANDLEY PRYOR, JR. (age 65)
Director
695 Bloomfield Avenue
Bloomfield, CT 06002
Mr. Pryor has served as Managing Director of Pryor & Clark Company, Hartford,
Connecticut, since June, 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 Chairman
P.O. Box 2999
Hartford, CT 06104-2999
Mr. Smith has served as Vice Chairman of Hartford Financial Services Group, Inc.
since February, 1997, 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 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
225 Asylum Avenue
Hartford, CT 06103
Mr. Springer currently serves as Chairman of Medspan, Inc. From 1986 to 1997 he
served as Chief Executive 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).
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<PAGE> 183
PETER CUMMINS (age 61)
Vice President
P. O. Box 2999
Hartford, CT 06104-2999
Mr. Cummins has served as Senior Vice President since 1997 and Vice President
since 1989 of sales and marketing of the Individual Life and Annuity Division of
The Hartford Life Insurance Company. He is also a Director and Vice President of
HIFSCO.
ANDREW WILLIAM KOHNKE (age 40)
Vice President
55 Farmington Avenue
Hartford, CT 06105
Mr. Kohnke serves as Managing Director and a Director of HIMCO. Previously he
served as Vice President of 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 President
P.O. Box 2999
Hartford, CT 06104-2999
Mr. Marra has served as an Executive Vice President since 1996, and as Senior
Vice President and Director since 1994 of the Individual Life and Annuity
Division of The Hartford Life Insurance Company. Mr. Marra is also a Director
and Executive Vice President of HIFSCO. Mr. Marra joined The Hartford Life
Insurance Company in 1980.
CHARLES MINER O'HALLORAN (age 51)
Vice President and Secretary
Hartford Plaza
Hartford, CT 06115
Mr. O'Halloran has served as Senior Vice President since January, 1998,
Corporate Secretary from 1996 to 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.
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<PAGE> 184
GEORGE RICHARD JAY (age 46)
Controller and Treasurer
P.O. Box 2999
Hartford, CT 06104-2999
Mr. Jay has served as Secretary and Director, Life and Equity Accounting and
Financial Control, of The Hartford Life Insurance Company since 1987.
KEVIN J. CARR (age 44)
Assistant Secretary and Counsel
55 Farmington Avenue
Hartford, CT 06105
Mr. Carr has served as Counsel since November 1996 and Associate Counsel since
November 1995, of The Hartford 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 Secretary
P.O. Box 2999
Hartford, CT 06104-2999
Mr. Costa has served as the Tax Manager of The Hartford-Sponsored Mutual Funds
since July 1996. 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.
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.
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<PAGE> 185
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 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.
For information on sales charge waivers for the Company's directors and
affiliated persons of the Company, please see the prospectus.
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>
JOSEPH A. WINIFRED E. WILLIAM A. MILLARD H. JOHN K.
BIERNAT COLEMAN O'NEILL PRYOR SPRINGER
<S> <C> <C> <C> <C> <C>
COMPENSATION $ 6,100 $ 6,100 $ 6,100 $ 6,100 $ 6,100
RECEIVED FROM
COMPANY
PENSION OR $ 0 $ 0 $ 0 $ 0 $ 0
RETIREMENT BENEFITS
ACCRUED AS FUND
EXPENSE
TOTAL COMPENSATION $25,000 $25,000 $25,000 $25,000 $25,000
FROM COMPANY AND
COMPLEX PAID TO
DIRECTORS*
</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
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<PAGE> 186
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.
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>
[to be updated to reflect 5% shareholders CLASS A CLASS B CLASS C CLASS Y
and % held as of 1/31/99] ------- ------- ------- -------
<S> <C> <C> <C> <C>
SMALL COMPANY FUND
CAPITAL APPRECIATION FUND
MIDCAP FUND
INTERNATIONAL OPPORTUNITIES FUND
GLOBAL LEADERS FUND
STOCK FUND
GROWTH AND INCOME FUND
</TABLE>
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<PAGE> 187
<TABLE>
<CAPTION>
[to be updated to reflect 5% shareholders CLASS A CLASS B CLASS C CLASS Y
and % held as of 1/31/99] ------- ------- ------- -------
<S> <C> <C> <C> <C>
DIVIDEND AND GROWTH FUND
ADVISERS FUND
HIGH YIELD FUND
BOND INCOME STRATEGY FUND
MONEY MARKET FUND
</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.
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
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<PAGE> 188
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 of Wellington
Management as set forth in the Prospectus. With respect to each Fund, except for
the Growth and Income Fund and Global Leaders Fund, Wellington Management will
waive 100% of its fees until the assets of each Fund reach $100 million, and,
thereafter, 50% of its fees until the assets of each Fund reach $500 million,
and, thereafter, 25% of its fees until the assets of each Fund reach $1 billion.
With respect to the Growth and Income Fund and the Global Leaders Fund,
Wellington Management will waive 100% of its fee until the assets of the Fund
first reach $50 million. As a corporate affiliate of HIFSCO, HIMCO is reimbursed
by HIFSCO for the cost it incurs in providing investment management services to
the High Yield Fund, Bond Income Strategy Fund and Money Market Fund.
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
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<PAGE> 189
time 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:
<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 or an affiliate of The Hartford has voluntarily and temporarily
agreed to limit the expenses of each of the Funds by reimbursing each Fund after
a certain level of total expenses has been incurred. The reimbursement details
are disclosed in the fee table under Investor Expenses in the Prospectuses.
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
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<PAGE> 190
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.
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.
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<PAGE> 191
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.
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
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<PAGE> 192
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 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 $_____ in connection with the above-referenced programs.
The aggregate dollar amount of commissions paid by the Company for the last
three fiscal years is as follows:
<TABLE>
<CAPTION>
COMMISSIONS AMOUNT REALLOWED AMOUNT RETAINED
----------- ---------------- ---------------
<S> <C> <C> <C>
1998
1997
1996
</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 PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 5.50% 5.82% 4.75%
</TABLE>
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<PAGE> 193
<TABLE>
<CAPTION>
FRONT-END SALES FRONT-END SALES
CHARGE AS A CHARGE AS A COMMISSION AS
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
<S> <C> <C> <C>
$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 million 2.00% 2.04% 1.75%
$1 million or more 0% 0% 0%
</TABLE>
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 PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
<S> <C> <C> <C>
AMOUNT OF PURCHASE
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 million 2.00% 2.04% 1.75%
$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.
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. The distributor
may pay the entire amount of the sales commission to 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.
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<PAGE> 194
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.
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.
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
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<PAGE> 195
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 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
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<PAGE> 196
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).
For the fiscal year ended December 31, 1998, the following 12b-1 fees were
paid by the Funds: [To be updated]
<TABLE>
<CAPTION>
FUND NAME CLASS A CLASS B CLASS C
--------- ------- ------- -------
<S> <C> <C> <C>
Small Company Fund
Capital Appreciation Fund
International Opportunities Fund
Global Leaders Fund
Stock Fund
Growth and Income Fund
Dividend and Growth Fund
Advisers Fund
High Yield Fund
Bond Income Strategy Fund
Money Market Fund
</TABLE>
The entire amount of 12b-1 fees listed above were paid to broker-dealers.
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
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<PAGE> 197
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.
Each Fund has paid the following brokerage commissions: [To be updated]
<TABLE>
<CAPTION>
FUND NAME 1998 1997 1996(1)
- --------- ---- -------- -------
<S> <C> <C> <C>
Small Company Fund $103,548 $ 8,264
Capital Appreciation Fund $748,835 $20,709
MidCap Fund N/A N/A
International Opportunities Fund $111,809 $65,362
Global Leaders Fund(3) N/A N/A
Stock Fund $ 78,586 $ 4,039
Growth and Income Fund(2) N/A N/A
Dividend and Growth Fund $101,358 $ 5,471
Advisers Fund $ 95,434 $ 6,412
High Yield Fund(3) 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 (April 30, 1998) through December 31, 1998.
(3) From inception date (September 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.
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<PAGE> 198
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 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).
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 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
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<PAGE> 199
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 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
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<PAGE> 200
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.
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
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<PAGE> 201
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.
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
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<PAGE> 202
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.
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.
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<PAGE> 203
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 [To be
updated] %, %, % and % respectively. For the same period, the effective yield
for Class A, Class B, Class C and Class Y shares was [To be updated] %, %, % and
% 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.
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)[superscript]n = ERV
Where:
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<PAGE> 204
P = a hypothetical initial n = number of years
payment of $1,000, less the
maximum sales load applicable ERV = ending redeemable value of
to a Fund the hypothetical $1,000 initial
payment made at the beginning
T = average annual total return of the designated period (or
fractional portion thereof)
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.
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 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
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<PAGE> 205
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
Class B Shares
Class C Shares N/A N/A
Class Y Shares N/A 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
Class B Shares
Class C Shares N/A N/A
Class Y Shares N/A 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 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 N/A N/A
Class B Shares N/A N/A
Class C Shares N/A N/A
Class Y Shares N/A N/A
</TABLE>
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<PAGE> 206
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
Class B Shares
Class C Shares N/A N/A
Class Y Shares N/A 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
Class B Shares N/A N/A
Class C Shares N/A N/A
Class Y Shares N/A N/A 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 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
Class B Shares
Class C Shares N/A N/A
Class Y Shares N/A N/A
</TABLE>
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<PAGE> 207
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
Class B Shares N/A N/A
Class C Shares N/A N/A
Class Y Shares N/A N/A 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
Class B Shares
Class C Shares N/A N/A
Class Y Shares N/A 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 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
Class B Shares
Class C Shares N/A N/A
Class Y Shares N/A N/A
</TABLE>
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<PAGE> 208
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
Class B Shares N/A N/A
Class C Shares N/A N/A
Class Y Shares N/A N/A 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
Class B Shares
Class C Shares N/A N/A
Class Y Shares N/A N/A
</TABLE>
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 N/A N/A
Class B Shares N/A N/A
Class C Shares N/A N/A
Class Y Shares N/A 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
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<PAGE> 209
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:
2[((a-b)/(cd)) + 1)(superscript)6 - 1]
Where:
a = net investment income earned c = the average daily number of
during the period attributable shares of the subject class
to the subject class outstanding during the period
that were entitled to receive
b = net expenses accrued for the dividends
period attributable to the
subject class d = the maximum offering price
per share of the subject
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 [To be
updated] %, %, % and % 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 Y was %, %, % and % 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
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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 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.
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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 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
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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>
<S> <C> <C>
Across the Board Forbes Morningstar, Inc.
Advertising Age Fortune Hartford Courant Nation's Business
Adviser's Magazine Inc National Underwriter
Adweek Independent Business New Choices (formerly 50
Agent Institutional Investor Plus)
American Banker Insurance Forum New England Business
American Agent and Insurance Advocate New York Times
Broker Independent Pension World
Associated Press Insurance Review Pensions & Investments
Barron's Investor's Professional Insurance
Best's Review Insurance Times Agents
Bloomberg Insurance Week Professional Agent
Broker World Insurance Product News Registered Representative
Business Week Insurance Sales Reuter's
Business Wire Investment Dealers Digest Rough Notes
Business News Features Investment Advisor Round the Table
Business Month Journal of Commerce Service
Business Marketing Journal of Accountancy Success
Business Daily Journal of the American The Standard
Business Insurance Society of CLU & ChFC The Boston Globe
California Broker Kiplinger's Personal The Washington Post
Changing Times Finance Tillinghast
Consumer Reports Knight-Ridder Time
Consumer Digest Crain's Life Association News U.S. News & World
Dow Jones News Service Life Insurance Selling Report
Economist Life Times U.S. Banker
Entrepreneur LIMRA's MarketFacts United Press International
Entrepreneurial Woman Lipper Analytical Services, USA Today
Financial Services Week Inc. Value Line
Financial World MarketFacts Wall Street Journal
Financial Planning Medical Economics Wiesenberger Investment
Financial Times Money Working Woman
</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
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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 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, may increase the amount of gain it is
deemed to recognize from the sale of certain investments held for less than
three months, which gain is limited under the Code to less than 30% of its
annual gross income, and 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. The Funds anticipate that they generally will
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not qualify to pass such foreign taxes and any associated tax deductions or
credits through to their shareholders, who therefore generally will not 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 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.
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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 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.
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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
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
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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.
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 financial statements and financial highlights of the Company as of
December 31, 1998 and for the year then ended, included in this Registration
Statement, have been audited by Arthur Andersen LLP, One Financial Plaza,
Hartford, Connecticut 06103, independent public accounts, as stated in their
report appearing herein.
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, are attached to this
Statement of Additional Information.
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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> 219
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:
- Leading market positions in well-established industries.
<PAGE> 220
- 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.
- The long-term senior debt rating is "A" or better; in some instances
"BBB" credits may be allowed if other factors outweigh the "BBB".
<PAGE> 221
- 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> 222
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) To be filed by Amendment.
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<PAGE> 223
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(10)
j. Consent of Independent Public Accountants(10)
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 Amendment Number 2 to Amended and Restated Rule
12b-1 Distribution Plan for Class A Shares(8)
m.(ix) Form of Amendment 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)
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<PAGE> 224
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 Senior Vice President of Hartford
and Distribution Life, 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>
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<PAGE> 225
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
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<PAGE> 226
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant 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 8th day of
February, 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.
Signature Title Date
- --------- ----- ----
* President February 8, 1999
- ----------------------- (Chief Executive Officer
Joseph H. Gareau & Director)
* Controller & Treasurer February 8, 1999
- ----------------------- (Chief Accounting Officer and
George R. Jay Chief Financial Officer)
* Director February 8, 1999
- -----------------------
Joseph A. Biernat
* Director February 8, 1999
- -----------------------
Winifred E. Coleman
* Director February 8, 1999
- -----------------------
William A. O'Neill
* Director February 8, 1999
- -----------------------
Millard H. Pryor, Jr.
* Director February 8, 1999
- -----------------------
Lowndes A. Smith
* Director February 8, 1999
- -----------------------
John K. Springer
/s/ Kevin J. Carr February 8, 1999
- -----------------------
* By Kevin J. Carr
Attorney-in-fact
101
