<PAGE> 1
As filed with the Securities and Exchange Commission on April 28, 2000
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. 15 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 17 /X/
THE HARTFORD MUTUAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
P. O. Box 2999, Hartford, Connecticut 06104-2999
(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)
Approximate Date of Proposed Public Offering:
Upon this amendment to the Registration Statement being declared
effective.
<PAGE> 2
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 2000 pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
___ on pursuant to paragraph (a)(1) of Rule 485
___ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
___ on pursuant to paragraph (a)(2) of Rule 485
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of its Common
Stock.
The Rule 24f-2 Notice for the Registrant's most recent fiscal year was filed on
March 9, 2000.
<PAGE> 3
THE HARTFORD MUTUAL FUNDS, INC.
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
MAY 1, 2000
<TABLE>
<S> <C>
AS WITH ALL MUTUAL FUNDS, THE GLOBAL HEALTH FUND
SECURITIES AND EXCHANGE COMMISSION GLOBAL TECHNOLOGY FUND
HAS NOT APPROVED OR DISAPPROVED SMALL COMPANY FUND
THESE SECURITIES OR PASSED UPON CAPITAL APPRECIATION FUND
THE ADEQUACY OF THIS PROSPECTUS. MIDCAP FUND
ANY REPRESENTATION TO THE CONTRARY INTERNATIONAL OPPORTUNITIES FUND
IS A CRIMINAL OFFENSE. 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 HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 219054
KANSAS CITY, MO 64121-9054
<PAGE> 4
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 5
INTRODUCTION
- --------------------------------------------------------------------------------
The Hartford Mutual Funds, Inc. is a family of fourteen 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. Each fund, except the Global Health
Fund and Global Technology Fund, is a diversified fund. The Global Health Fund
and Global Technology Fund are non-diversified funds, which are sometimes known
as "sector funds." Information on each fund, including risk factors for
investing in diversified versus non-diversified funds, can be found on the pages
following this introduction.
The investment manager to each fund is Hartford Investment Financial Services
Company ("HIFSCO"). The day-to-day portfolio management of the funds is provided
by two investment sub-advisers -- Wellington Management Company, LLP
("Wellington Management") and Hartford Investment Management Company ("HIMCO").
Information regarding HIFSCO, Wellington Management and HIMCO is included under
"Management of the Funds" in this prospectus.
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosures carefully before investing.
CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
A summary of each fund's goals, The Hartford Global Health Fund 2
strategies, risks, performance and The Hartford Global Technology Fund 4
expenses. The Hartford Small Company Fund 6
The Hartford Capital Appreciation Fund 8
The Hartford MidCap Fund 10
The Hartford International Opportunities Fund 12
The Hartford Global Leaders Fund 14
The Hartford Stock Fund 16
The Hartford Growth and Income Fund 18
The Hartford Dividend and Growth Fund 20
The Hartford Advisers Fund 22
The Hartford High Yield Fund 24
The Hartford Bond Income Strategy Fund 26
The Hartford Money Market Fund 28
Prior performance of similar funds 30
Description of other investment Other investment strategies and investment matters 32
strategies and investment risks.
Investment manager and management Management of the funds 32
fee information.
Information on your account. About your account 34
Choosing a share class 34
How sales charges are calculated 34
Sales charge reductions and waivers 35
Opening an account 36
Buying shares 37
Selling shares 38
Selling shares in writing 39
Transaction policies 40
Further information on the funds. Additional share classes 43
Financial highlights 44
For more information back cover
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 1
<PAGE> 6
THE HARTFORD GLOBAL HEALTH FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Global Health Fund seeks long-term capital
appreciation by investing at least 80% of its total assets in the equity
securities of health care companies worldwide.
INVESTMENT STRATEGY. The focus of the fund's investment process is stock
selection through fundamental analysis. The fund's approach to investing in the
health care sector is based on in-depth understanding of medical science,
regulatory developments, reimbursement policy trends, and individual company
business franchises. The portfolio will exploit favorable macro trends for the
health care sector including demographics.
The portfolio will also seek to invest in health care companies that benefit
from the trend toward global consolidation, the biotechnology revolution and
advances in software, integrated circuits and biocompatible materials.
Fundamental research is focused on direct contact with company management,
suppliers and competitors.
Investments in the portfolio will be allocated across the major subsectors of
the health care sector, which include pharmaceuticals, medical products, managed
health care and health information services. Wellington Management may favor
certain subsectors at times based upon the relative attractiveness of stocks
within these subsectors, near term macroeconomic factors and the availability of
such stocks at attractive prices. Some representation is typically maintained in
each major subsector of the health care sector.
Stocks considered for purchase in the portfolio typically share the following
attributes:
- The company's business franchise is temporarily mispriced
- The company has under-appreciated new product pipelines
- The company has opportunities due to changes in reimbursement policy (for
example, the privatization of health care services abroad)
- The company is a target of opportunity due to industry consolidation
Stocks will be considered for sale from the portfolio when:
- Target prices are achieved
- Wellington Management's fundamental expectations are not met
- A company's prospects become less appealing
Wellington Management seeks growth companies with attractive entry valuations,
defined as those stocks where the price is not already fully exploited by other
investors. Accordingly, Wellington Management seeks to be early, not late in
recognizing opportunity.
The portfolio will be relatively concentrated both with regard to position size
and the health care sector. The fund may invest in companies of any size
capitalization. The portfolio will be close to fully invested; cash balances
normally will not exceed 10% of total assets. Market timing will not be a
significant source of performance. Annual portfolio turnover is expected to be
100% or less.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small, medium and large companies, its performance may be more
volatile than that of a fund that invests primarily in larger companies. You
could lose money as a result of your investment.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's investments are focused in the health care sector. This means that
the fund may have greater market fluctuation and price volatility than a fund
which invests in a more broadly diversified portfolio of securities across
sectors. Financial, business and economic factors may have a greater impact on a
fund of this kind than on a broadly diversified fund.
Health care products and services are generally subject to government
regulation, and changes in laws or regulations could adversely impact the market
value of securities and the fund's overall performance. Government regulation
could have a significant, adverse impact on the price and availability of a
company's products and services.
Lawsuits and regulatory proceedings which may be brought against the issuers of
securities could also adversely impact the market value of securities and the
fund's overall performance.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund expects to trade securities very actively, which will likely increase
its transaction costs (thus lowering performance) and increase your taxable
distributions.
2 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 7
THE HARTFORD GLOBAL HEALTH FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
The fund is managed by
Wellington Management using a
team of its global industry
analysts that specialize in the
health care sector.
PAST PERFORMANCE. Because the fund has been in operation
for less than one year no performance history has been
provided.
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.41% 0.41% 0.38%
Total operating expenses 1.76% 2.41% 2.38%
Fee waiver 0.11% 0.06% 0.03%
Net expenses(1)(2) 1.65% 2.35% 2.35%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.65%, 2.35% and 2.35%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 710 $ 741 $ 438
Year 3 $1,068 $1,054 $ 840
Year 5 $1,449 $1,494 $1,368
Year 10 $2,513 $2,767 $2,811
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 710 $ 241 $ 338
Year 3 $1,068 $ 754 $ 840
Year 5 $1,449 $1,294 $1,368
Year 10 $2,513 $2,767 $2,811
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 3
<PAGE> 8
THE HARTFORD GLOBAL TECHNOLOGY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Global Technology Fund seeks long-term capital
appreciation by investing at least 80% of its total assets in the equity
securities of technology companies worldwide.
INVESTMENT STRATEGY. The focus of the fund's investment process is stock
selection through fundamental analysis. The fund's approach to investing in the
technology sector is based on analyzing the competitive outlook for various
subsectors of the technology sector, identifying those subsectors likely to
benefit from the current and expected future environment, and identifying
individual opportunities.
Wellington Management's evaluation of technology companies rests on its solid
knowledge of the overall competitive environment, including supply and demand
characteristics, secular trends, existing product evaluations, and new product
developments within the technology sector. Fundamental research is focused on
direct contact with company management, suppliers and competitors.
Asset allocation within the portfolio reflects Wellington Management's opinion
of the relative attractiveness of stocks within the subsectors of the technology
sector, near term macroeconomic events that may detract or enhance the
subsector's attractiveness, and the number of underdeveloped opportunities in
each subsector. Opportunities dictate the magnitude and frequency of changes in
asset allocation across the major subsectors of the technology sector, including
computer software, computer hardware, semiconductors and equipment,
communications equipment and internet and news media. Some representation is
typically maintained in each major subsector of the technology sector.
Stocks considered for purchase in the portfolio typically share the following
attributes:
- A positive change in operating results is anticipated
- Unrecognized or undervalued capabilities are present
- The quality of management indicates that these factors will be converted
to shareholder value
Stocks will be considered for sale from the portfolio when:
- Target prices are achieved
- Earnings and/or return expectations are reduced due to fundamental
changes in the company's operating outlook
- More attractive value in a comparable company is available.
The portfolio will be relatively concentrated both with regard to position size
and the technology sector. The fund may invest in companies of any size
capitalization. The portfolio will be close to fully invested; cash balances
normally will not exceed 10% of total assets. Market timing will not be a
significant source of performance. Annual portfolio turnover is expected to be
high and will exceed 100%.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small, medium and large companies, its performance may be more
volatile than that of a fund that invests primarily in larger companies. You
could lose money as a result of your investment.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's investments are focused in the technology sector. This means that the
fund may have greater market fluctuation and price volatility than a fund which
invests in a more broadly diversified portfolio of securities across sectors.
Financial, business and economic factors may have a greater impact on this kind
of fund than on a broadly diversified fund.
Competition in the sector may cause technology companies to cut prices
significantly, which can adversely affect the profitability of companies that
make up the fund's portfolio. In addition, because of rapid technological
developments, products or services which are offered by technology companies may
become obsolete or may be produced for a relatively short time, which could
adversely affect the price of the issuers' securities. This means that the
fund's returns may be more volatile than the returns of a fund which is not
subject to these risk factors.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund expects to trade securities very actively, which will likely increase
its transaction costs (thus lowering performance) and increase your taxable
distributions.
4 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 9
THE HARTFORD GLOBAL TECHNOLOGY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
The fund is managed by
Wellington Management using a
team of its global industry
analysts that specialize in the
technology sector.
PAST PERFORMANCE. Because the fund has been in operation
for less than one year no performance history has been
provided.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.41% 0.41% 0.38%
Total operating expenses 1.76% 2.41% 2.38%
Fee waiver 0.11% 0.06% 0.03%
Net expenses(1)(2) 1.65% 2.35% 2.35%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.65%, 2.35% and 2.35%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 710 $ 741 $ 438
Year 3 $1,068 $1,054 $ 840
Year 5 $1,449 $1,494 $1,368
Year 10 $2,513 $2,767 $2,811
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 710 $ 241 $ 338
Year 3 $1,068 $ 754 $ 840
Year 5 $1,449 $1,294 $1,368
Year 10 $2,513 $2,767 $2,811
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 5
<PAGE> 10
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Small Company Fund seeks growth of capital by
investing primarily in stocks selected on the basis of potential for capital
appreciation.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its total assets
in common stocks of companies with market capitalizations within the range
represented by the Russell 2000 Index. As of December 31, 1999 this range was
between approximately $10 million and $13 billion, and the average market
capitalization was $664 million. The fund may invest up to 20% of its total
assets in securities of non-U.S. issuers.
Through fundamental analysis Wellington Management identifies companies that it
believes have substantial potential for near-term capital appreciation.
Wellington Management selects securities of companies that, in its opinion:
- have potential for above-average earnings growth,
- are undervalued in relation to their investment potential,
- have positive business and/or fundamental financial characteristics that
are overlooked or misunderstood by investors, or
- are relatively obscure and undiscovered by the overall investment
community.
Fundamental analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small companies, its performance may be more volatile than that
of a fund that invests primarily in larger companies. You could lose money as a
result of your investment.
Stocks of smaller companies may be more risky than stocks of larger companies.
Many of these companies are young and have limited operating or business
history. Because these businesses frequently rely on narrow product lines and
niche markets, they can suffer severely from isolated business setbacks.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. Small
company stocks as a group could fall out of favor with the market, causing the
fund to underperform funds that focus on other types of stocks. Similarly, if
the managers' stock selection strategy doesn't perform as expected, the fund
could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[chart]
<TABLE>
<S> <C>
97 19.28
98 10.46
99 65.66
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
35.86% (4th quarter, 1999) and the lowest quarterly return was -20.78% (3rd
quarter, 1998)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 56.55% 28.22%
Class B 59.46% 29.00%
Class C(1) 61.93% 29.14%
Russell 2000 Index 21.26% 15.91%
</TABLE>
INDEX: The Russell 2000 Index is a broad based unmanaged index comprised of
2,000 of the smallest U.S. domiciled company common stocks (on the basis of
capitalization) that are traded in the United States on the New York Stock
Exchange, American Stock Exchange and NASDAQ.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
6 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 11
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Steven C. Angeli
- Vice President of Wellington
Management
- Manager of the fund since
January 1, 2000
- Joined Wellington Management
in 1994
- Investment professional
since 1990
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.31% 0.30% 0.35%
Total operating expenses 1.51% 2.15% 2.20%
Fee waiver 0.06% 0.05%
Net expenses(1)(2) 1.45% 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 contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.45%, 2.15% and 2.15%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 690 $ 720 $ 418
Year 3 $ 998 $ 980 $ 783
Year 5 $1,328 $1,365 $1,275
Year 10 $2,257 $2,503 $2,625
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 690 $ 220 $ 318
Year 3 $ 998 $ 680 $ 783
Year 5 $1,328 $1,165 $1,275
Year 10 $2,257 $2,503 $2,625
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 7
<PAGE> 12
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Capital Appreciation Fund seeks growth of capital
by investing primarily in stocks selected on the basis of potential for capital
appreciation.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its total assets
in common stocks of small, medium and large companies. The fund may invest up to
20% of its total assets in securities of non-U.S. issuers.
Through fundamental analysis, Wellington Management identifies companies that it
believes have substantial near-term capital appreciation potential regardless of
company size or industry. This strategy is sometimes referred to as a "stock
picking" approach. Small and medium sized companies are selected primarily on
the basis of dynamic earnings growth potential. Larger companies are selected
primarily based on the expectation of a significant event that Wellington
Management believes will trigger an increase in the stock price.
In analyzing a prospective investment Wellington Management looks at a number of
factors, such as business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends and other related measures
of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small, medium and large companies, its performance may be more
volatile than that of a fund that invests primarily in larger companies. You
could lose money as a result of your investment.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[Bar Graph]
<TABLE>
<S> <C>
97 55.11%
98 3.26%
99 66.76%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
36.81% (4th quarter, 1999) and the lowest quarterly return was -21.94% (3rd
quarter, 1998)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 57.59% 43.60%
Class B 60.58% 44.64%
Class C(1) 62.79% 44.56%
S&P 500 Index 21.04% 29.71%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
8 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 13
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
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
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.28% 0.29% 0.34%
Total operating expenses 1.38% 2.02% 2.09%
Fee waiver 0.05%
Net expenses(1)(2) 1.33%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.45%, 2.15% and 2.15%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 679 $ 707 $ 412
Year 3 $ 961 $ 940 $ 755
Year 5 $1,263 $1,298 $1,223
Year 10 $2,120 $2,366 $2,515
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 679 $ 207 $ 312
Year 3 $ 961 $ 640 $ 755
Year 5 $1,263 $1,098 $1,223
Year 10 $2,120 $2,366 $2,515
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 9
<PAGE> 14
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford MidCap Fund seeks long-term growth of capital by
investing primarily in stocks selected on the basis of potential for capital
appreciation.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its total assets
in common stocks of companies with market capitalizations within the range
represented by the Standard & Poor's MidCap 400 Index. As of December 31, 1999
this range was between approximately $165 million and $37 billion and the
average market capitalization was $2.3 billion. The fund may invest up to 20% of
its total assets in securities of non-U.S. issuers.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, and demographic trends. Through top down analysis, Wellington
Management anticipates trends and changes in markets and the economy
overall and identifies industries and sectors that are expected to
outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, and other related measures of value.
The fund favors high-quality growth companies. The key characteristics of
high-quality growth companies include a leadership position within an industry,
a strong balance sheet, a high return on equity, and a strong management team.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on mid-sized companies, its performance may be more volatile than
that of a fund that invests primarily in larger companies. You could lose money
as a result of your investment.
Stocks of mid-sized companies may be more risky than stocks of larger companies.
These companies may be young and have more limited operating or business
history. Because these businesses frequently rely on narrower product lines and
niche markets, they can suffer from isolated business setbacks.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly.
Mid-sized company stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on other types of stocks.
Similarly, if the managers' stock selection strategy doesn't perform as
expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[Hartford Midcap Fund Bar Graph]
<TABLE>
<S> <C>
98 23.12%
99 50.17%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
29.78% (4th quarter, 1999) and the lowest quarterly return was -16.03% (3rd
quarter, 1998)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 12/30/97)
<S> <C> <C>
Class A 41.91% 32.07%
Class B 44.10% 33.81%
Class C(1) 46.73% 34.29%
S&P MidCap 400 Index 14.73% 16.88%
</TABLE>
INDEX: The S&P MidCap 400 Index is an unmanaged index of common stocks of
companies chosen by Standard & Poor's designed to represent price movements in
the midcap U.S. equity market.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
10 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 15
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Phillip H. Perelmuter
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1997)
- Joined Wellington Management
in 1995
- Investment professional
since 1983
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.31% 0.32% 0.37%
Total operating expenses 1.51% 2.17% 2.22%
Fee waiver 0.06% 0.02% 0.07%
Net expenses(1)(2) 1.45% 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 contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.45%, 2.15% and 2.15%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 690 $ 720 $ 418
Year 3 $ 998 $ 984 $ 788
Year 5 $1,328 $1,374 $1,283
Year 10 $2,257 $2,522 $2,645
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 690 $ 220 $ 318
Year 3 $ 998 $ 684 $ 788
Year 5 $1,328 $1,174 $1,283
Year 10 $2,257 $2,522 $2,645
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 11
<PAGE> 16
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford International Opportunities Fund seeks growth of
capital by investing primarily in stocks issued by non-U.S. companies.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its assets in
stocks issued by non-U.S. companies which trade in foreign markets that are
generally considered to be well established. Under normal market conditions the
fund diversifies its investments among at least three countries other than the
United States. The securities in which the fund invests are denominated in both
U.S. dollars and non-U.S. currencies and generally are traded in non-U.S.
markets.
Wellington Management uses a three-pronged investment strategy:
- Wellington Management determines the relative attractiveness of the many
countries in which the fund may invest based upon its analysis of the
economic and political environment of each country.
- Wellington Management also evaluates industries on a global basis to
determine which industries offer the most potential for capital
appreciation given current and projected global and local economic and
market conditions.
- Wellington Management conducts fundamental research on individual
companies to identify securities for purchase or sale. Fundamental
analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of
value.
In analyzing companies for investment, Wellington Management considers companies
for inclusion in the fund's portfolio that are typically larger, high- quality
companies that operate in established markets. Characteristics of high-quality
growth companies include a strong balance sheet, attractive industry trends,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[Hartford International Opportunities Fund Bar Graph]
<TABLE>
<S> <C>
97 0.84%
98 12.53%
99 39.13%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
22.28% (4th quarter, 1999) and the lowest quarterly return was -16.14% (3rd
quarter, 1998)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 31.48% 14.90%
Class B 33.11% 15.40%
Class C(1) 35.60% 15.66%
EAFE GDP Index 31.02% 19.65%(2)
</TABLE>
INDEX: The Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP") Index is
an unmanaged index of stocks of companies representing stock markets in Europe,
Australia, New Zealand and the Far East.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
(2) Return is from 7/31/96 -- 12/31/99
12 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 17
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Trond Skramstad
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1993
- Investment professional
since 1990
Andrew S. Offit
- Vice President of Wellington
Management
- Associate Manager of the
fund since 1997
- Joined Wellington Management
in 1997
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.41% 0.41% 0.46%
Total operating expenses 1.61% 2.26% 2.31%
Fee waiver 0.05%
Net expenses(1)(2) 1.56%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.65%, 2.35% and 2.35%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 701 $ 732 $ 434
Year 3 $1,029 $1,014 $ 822
Year 5 $1,380 $1,422 $1,335
Year 10 $2,363 $2,617 $2,742
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 701 $ 232 $ 334
Year 3 $1,029 $ 714 $ 822
Year 5 $1,379 $1,222 $1,335
Year 10 $2,363 $2,617 $2,742
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 13
<PAGE> 18
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Global Leaders Fund seeks growth of capital by
investing primarily in stocks issued by companies worldwide.
INVESTMENT STRATEGY. The fund invests primarily in a diversified portfolio of
common stocks covering a broad range of countries, industries and companies.
Securities in which the fund invests are denominated in both U.S. dollars and
non-U.S. currencies and may trade in both U.S. and non-U.S. markets.
Under normal market and economic conditions, the fund invests at least 65% of
its total assets in common stocks of high-quality growth companies worldwide.
These companies must, in the opinion of Wellington Management, be leaders in
their respective industries as indicated by an established market presence and
strong global, regional or country competitive positions. Under normal market
and economic conditions, the fund will diversify its investments in securities
of issuers among at least five countries, which may include the United States.
There are no limits on the amount of the fund's assets that may be invested in
each country.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the global macro-economic and investment
environments. This includes an evaluation of U.S. and non-U.S. economic
and political conditions, fiscal and monetary policies, demographic
trends and investor sentiment. Through top down analysis, Wellington
Management anticipates trends and changes in the markets and economy to
identify companies which offer significant potential for capital
appreciation given current and projected global and local economic and
market conditions.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statements, anticipated
earnings, revenues and other related measures of value.
The fund emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a strong balance sheet, a high return on
equity, a strong management team, and attractive relative value within the
context of the global marketplace or a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's operation, while the table shows how the fund's
performance for the same time period and since inception compares to that of a
broad-based market index. The bar chart figures do not include the effect of
sales charges, while the average annual total return figures do. If sales
charges were reflected in the bar chart, returns would have been lower. All
figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS A TOTAL RETURN
FOR CALENDAR YEAR 1999
(EXCLUDES SALES CHARGES)
[Global Leaders Fund Bar Graph]
<TABLE>
<S> <C>
99 47.68%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
31.85% (4th quarter, 1999) and the lowest quarterly return was -0.56% (3rd
quarter, 1999)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 9/30/98)
<S> <C> <C>
Class A 39.56% 61.28%
Class B 41.64% 64.78%
Class C 44.17% 65.54%
MSCI Index 24.95% 39.22%
</TABLE>
INDEX: The Morgan Stanley Capital International World Index is a broad based
unmanaged market capitalization weighted total return index which measures the
performance of 23 developed-country global stock markets, including the United
States, Canada, Europe, Australia, New Zealand and the Far East.
14 THE HARTFORD MUTUAL FUNDS, INC.
<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
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.85% 0.85% 0.85%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.42% 0.44% 0.48%
Total operating expenses 1.62% 2.29% 2.33%
Fee waiver 0.05%
Net expenses(1)(2) 1.57%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.65%, 2.35% and 2.35%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 702 $ 735 $ 436
Year 3 $1,032 $1,023 $ 828
Year 5 $1,384 $1,438 $1,346
Year 10 $2,373 $2,648 $2,763
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 702 $ 235 $ 336
Year 3 $1,032 $ 723 $ 828
Year 5 $1,384 $1,238 $1,346
Year 10 $2,373 $2,648 $2,763
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 15
<PAGE> 20
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Stock Fund seeks long-term growth of capital,
with income as a secondary consideration, by investing primarily in stocks.
INVESTMENT STRATEGY. The fund normally invests at least 65% of the fund's total
assets in the common stocks of high-quality growth companies. Many of the
companies in which the fund invests have a history of paying dividends and are
expected to continue paying dividends in the future. The fund may invest up to
20% of its total assets in securities of non-U.S. issuers. The fund invests in a
diversified portfolio of primarily equity securities using a two-tiered
investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, demographic trends, and investor sentiment. Through top down
analysis, Wellington Management anticipates trends and changes in markets
in the economy overall and identifies industries and sectors that are
expected to outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
of a company involves the assessment of such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
The key characteristics of high-quality growth companies favored by the fund
include a leadership position within an industry, a strong balance sheet, a high
return on equity, sustainable or increasing dividends, a strong management team
and a globally competitive position.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on small- or
medium-capitalization stocks. Similarly, if the managers' stock selection
strategy doesn't perform as expected, the fund could underperform its peers or
lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[Hartford Stock Fund Bar Graph]
<TABLE>
<S> <C>
97 31.78
98 31.33
99 22.31
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
20.30% (4th quarter, 1998) and the lowest quarterly return was -10.25% (3rd
quarter, 1998)
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 15.58% 27.53%
Class B 16.46% 28.27%
Class C(1) 19.19% 28.33%
S&P 500 Index 21.04% 29.71%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
16 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 21
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
Philip H. Perelmuter
- Senior Vice President of
Wellington Management
- Associate Manager of the
fund since 1996
- Joined Wellington Management
in 1995
- Investment professional
since 1983
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.74% 0.74% 0.74%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.29% 0.29% 0.33%
Total operating expenses 1.38% 2.03% 2.07%
Fee waiver 0.05%
Net expenses(1)(2) 1.33%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.45%, 2.15% and 2.15%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 679 $ 708 $ 410
Year 3 $ 961 $ 943 $ 748
Year 5 $1,263 $1,303 $1,212
Year 10 $2,120 $2,376 $2,495
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 679 $ 208 $ 310
Year 3 $ 961 $ 643 $ 748
Year 5 $1,263 $1,103 $1,212
Year 10 $2,120 $2,376 $2,495
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 17
<PAGE> 22
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Growth and Income Fund seeks growth of capital
and current income by investing primarily in stocks with earnings growth
potential and steady or rising dividends.
INVESTMENT STRATEGY. The fund invests primarily in a diversified portfolio of
common stocks that typically have steady or rising dividends and whose prospects
for capital appreciation are considered favorable by Wellington Management. The
fund may invest up to 20% of its total assets in securities of non-U.S. issuers.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues, dividends and other
related measures of value.
Wellington Management then complements its fundamental research with an
internally-developed analytical approach. This analytical approach consists of
both valuation and timeliness measures. Valuation factors focus on future
dividend growth and cash flow to determine the relative attractiveness of
different stocks in different industries. Timeliness focuses on stocks with
favorable earnings and stock price momentum to assess the appropriate time for
purchase.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's operation, while the table shows how the fund's
performance for the same time period and since inception compares to that of a
broad-based market index The bar chart figures do not include the effect of
sales charges, while the average annual total return figures do. If sales
charges were reflected in the bar chart, returns would have been lower. All
figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS A TOTAL RETURN
FOR CALENDAR YEAR 1999
(EXCLUDES SALES CHARGES)
[Growth & Income Fund Bar Graph]
<TABLE>
<CAPTION>
99 20.8
- -- ----
<S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
During the period shown in the bar chart, the
highest quarterly return was 15.26% (4th
quarter, 1999) and the lowest quarterly return
was -6.40% (3rd quarter, 1999)
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 4/30/98)
<S> <C> <C>
Class A 14.16% 17.55%
Class B 15.00% 18.63%
Class C(1) 17.78% 20.06%
S&P 500 Index 21.04% 19.78%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
18 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 23
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
James A. Rullo
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1998)
- Joined Wellington Management
in 1994
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.34% 0.33% 0.36%
Total operating expenses 1.49% 2.13% 2.16%
Fee waiver 0.05% 0.01%
Net expenses(1)(2) 1.44% 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 contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.45%, 2.15% and 2.15%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 689 $ 718 $ 418
Year 3 $ 993 $ 974 $ 775
Year 5 $1,319 $1,355 $1,258
Year 10 $2,237 $2,482 $2,587
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 689 $ 218 $ 318
Year 3 $ 993 $ 674 $ 775
Year 5 $1,319 $1,155 $1,258
Year 10 $2,237 $2,482 $2,587
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 19
<PAGE> 24
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Dividend and Growth Fund seeks a high level of
current income consistent with growth of capital by investing primarily in
stocks.
INVESTMENT STRATEGY. The fund invests primarily in a diversified portfolio of
common stocks that typically have above average income yields and whose
prospects for capital appreciation are considered favorable by Wellington
Management. Under normal market and economic conditions at least 65% of the
fund's total assets are invested in dividend-paying equity securities. The fund
may invest up to 20% of its total assets in securities of non-U.S. issuers. The
fund tends to focus on securities of larger, well-established companies.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues and dividends.
As a key component of its fundamental analysis, Wellington Management evaluates
a company's ability to sustain and potentially increase its dividend payments.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[Dividend & Growth Fund Bar Graph]
<TABLE>
<S> <C>
97 30.99
98 14.47
99 4.57
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
15.85% (2nd quarter, 1997) and the lowest quarterly return was -8.10% (3rd
quarter, 1999)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A -1.18% 16.83%
Class B -1.18% 17.33%
Class C(1) 1.72% 17.58%
S&P 500 Index 21.04% 29.71%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
20 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 25
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Laurie A. Gabriel
- Senior Vice President and
Managing Partner of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1976
- Investment professional
since 1976
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.28% 0.27% 0.32%
Total operating expenses 1.38% 2.02% 2.07%
Fee waiver 0.05%
Net expenses(1)(2) 1.33%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.40%, 2.10% and 2.10%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 679 $ 707 $ 410
Year 3 $ 961 $ 940 $ 748
Year 5 $1,263 $1,298 $1,212
Year 10 $2,120 $2,366 $2,495
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 679 $ 207 $ 310
Year 3 $ 961 $ 640 $ 748
Year 5 $1,263 $1,098 $1,212
Year 10 $2,120 $2,366 $2,495
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 21
<PAGE> 26
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Advisers Fund seeks maximum long-term total
return.
INVESTMENT STRATEGY. The fund allocates its assets among three categories:
- stocks,
- debt securities, and
- money market instruments.
The fund favors stocks issued by high-quality growth companies. The key
characteristics of high-quality growth companies include a leadership position
within an industry, a strong balance sheet, a high return on equity, sustainable
or increasing dividends, a strong management team and a globally competitive
position.
The debt securities (other than money market instruments) in which the fund
primarily invests include securities issued or guaranteed by the U.S. Government
and its agencies or instrumentalities and securities rated investment grade
(rated at least BBB by Standard & Poor's Corporation or Baa by Moody's Investors
Service, Inc., or if unrated, securities deemed by Wellington Management to be
of comparable quality). The fund is not restricted to any specific maturity
term.
Asset allocation decisions are based on Wellington Management's judgment of the
projected investment environment for financial assets, relative fundamental
values, the attractiveness of each asset category, and expected future returns
of each asset category. Wellington Management does not attempt to engage in
short-term market timing among asset categories. As a result, shifts in asset
allocation are expected to be gradual and continuous and the fund will normally
have some portion of its assets invested in each asset category. There is no
limit on the amount of fund assets that may be allocated to each asset category
and the allocation is in Wellington Management's discretion.
The fund may invest up to 20% of its total assets in securities of non-U.S.
issuers.
- --------------------------------------------------------------------------------
MAIN RISKS. This fund has stock market risk, interest rate risk, manager
allocation risk, credit risk and prepayment risk. You could lose money as a
result of your investment.
Stock market risk means the stocks held by the fund may decline in value due to
the activities and financial prospects of individual companies or to general
market and economic conditions.
Interest rate risk refers to the possibility that your investment may go down in
value when interest rates rise.
Credit risk refers to the possibility that the issuing company may not be able
to pay interest and principal when due.
Manager allocation risk refers to the possibility that the portfolio managers
could allocate assets in a manner that results in the fund's underperforming its
peers.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[CLASS A YEAR-BY-YEAR TOTAL RETURNS]
<TABLE>
<S> <C>
97 23.30
98 21.09
99 12.08
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
12.39% (2nd quarter, 1997) and the lowest quarterly return was -4.09% (3rd
quarter, 1999)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A 5.92% 17.92%
Class B 6.92% 18.49%
Class C(1) 9.18% 18.69%
S&P 500 Index 21.04% 29.71%
LGCB Index -2.15% 9.03%
</TABLE>
INDICES: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
The Lehman Brothers Government/Corporate Bond Index is a broad based unmanaged,
market-value-weighted index of all debt obligations of the U.S. Treasury and
U.S. Government agencies (excluding mortgaged-backed securities) and of all
publicly-issued fixed-rate, nonconvertible, investment grade domestic corporate
debt.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
22 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 27
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Paul D. Kaplan
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1996)
- Joined Wellington Management
in 1982
- Investment professional
since 1974
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1996)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 5.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 5.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.68% 0.68% 0.68%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.28% 0.29% 0.31%
Total operating expenses 1.31% 1.97% 1.99%
Fee waiver 0.05%
Net expenses(1)(2) 1.26%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.40%, 2.10% and 2.10%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 672 $ 702 $ 402
Year 3 $ 940 $ 924 $ 724
Year 5 $1,228 $1,272 $1,171
Year 10 $2,045 $2,313 $2,411
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 672 $ 202 $ 302
Year 3 $ 940 $ 624 $ 724
Year 5 $1,228 $1,072 $1,171
Year 10 $2,045 $2,313 $2,411
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 23
<PAGE> 28
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford High Yield Fund seeks high current income by
investing in non-investment grade debt securities. Growth of capital is a
secondary objective.
INVESTMENT STRATEGY. The fund normally invests at least 65%, and may invest up
to 100%, of its portfolio in non-investment grade debt securities (securities
rated "Ba" or lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or
lower by Standard and Poor's Corporation ("S&P"), or securities which, if
unrated, are determined by HIMCO to be of comparable quality). Debt securities
rated below investment grade are commonly referred to as "high yield-high risk
securities" or "junk bonds". The fund will invest no more than 10% of total
assets in securities rated below B3 by Moody's or B- by S&P, or, if unrated,
determined to be of comparable quality by HIMCO. The fund may invest in bonds of
any maturity although the fund tends to have an average maturity within the
intermediate-term range, which is typically defined as between 5 to 10 years.
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 and
up to 10% of its total assets in securities denominated in foreign currencies.
To achieve its goal of high current income, the fund uses what is sometimes
referred to as a top-down analysis to determine which industries may benefit
from current and future changes in the economy. The fund then selects individual
securities within selected industries that appear from a yield perspective to be
attractive. The fund assesses such factors as the company's business
environment, balance sheet, income statement, anticipated earnings and
management team.
The fund seeks its secondary goal of capital growth, when consistent with its
primary objective of high current income, by investing in securities that the
portfolio manager expects to appreciate in value as a result of declines in
long-term interest rates or favorable developments affecting the business or
prospects of the issuer which may improve the issuer's financial condition and
credit rating.
- --------------------------------------------------------------------------------
MAIN RISKS. The major factors affecting this fund's performance are interest
rates and credit risk. When interest rates rise, bond prices fall; generally the
longer a bond's maturity, the more sensitive it is to this risk. You could lose
money as a result of your investment.
Credit risk depends largely on the perceived financial health of bond issuers.
In general, lower-rated bonds have higher credit risks. High yield bond prices
can fall on bad news about the economy, an industry or a company. Share price,
yield and total return may fluctuate more than with less aggressive bond funds.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. If certain industries or investments don't perform as the
fund expects, it could underperform its peers or lose money.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
High yield bonds and foreign securities may make the fund more sensitive to
market or economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. The fund may trade securities actively, which could increase its
transaction costs (thus lowering performance) and increase your taxable
distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's performance, while the table shows how the fund's
performance over the same time period and since inception compares to that of a
broad-based market index. The bar chart figures do not include the effect of
sales charges, while the average annual total return figures do. If sales
charges were reflected in the bar chart, returns would have been lower. All
figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS A TOTAL RETURN
FOR CALENDAR YEAR 1999
(EXCLUDES SALES CHARGES)
[Hartford Chart]
<TABLE>
<CAPTION>
99 3.47
- -- ----
<S> <C>
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
2.73% (1st quarter, 1999) and the lowest quarterly return was -1.25% (3rd
quarter, 1999)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
(SINCE 9/30/98)
1 YEAR ----------------
<S> <C> <C>
Class A -1.19% 1.68%
Class B -2.21% 1.56%
Class C 0.78% 3.12%
Lehman High Yield
Corporate Index 2.39% 3.63%
</TABLE>
INDEX: The Lehman Brothers High Yield Corporate Index is a broad-based
market-value-weighted index that tracks the total return performance of
non-investment grade, fixed-rate, publicly placed, dollar denominated and
nonconvertible debt registered with the SEC.
24 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 29
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1998)
- Joined HIMCO in 1993
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 4.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 4.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.31% 0.33% 0.34%
Total operating expenses 1.41% 2.08% 2.09%
Fee waiver 0.05%
Net expenses(1)(2) 1.36%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.40%, 2.10% and 2.10%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 583 $ 713 $ 412
Year 3 $ 874 $ 958 $ 755
Year 5 $1,186 $1,329 $1,223
Year 10 $2,069 $2,429 $2,515
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 583 $ 213 $ 312
Year 3 $ 874 $ 658 $ 755
Year 5 $1,186 $1,129 $1,223
Year 10 $2,069 $2,429 $2,515
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 25
<PAGE> 30
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. 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.
INVESTMENT STRATEGY. Debt securities in which the fund invests include (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) non-convertible debt
securities issued or guaranteed by U.S. corporations or other issuers (including
foreign governments or corporations); (3) asset-backed and mortgage-related
securities; and (4) securities issued or guaranteed as to principal or interest
by a sovereign government or one of its agencies or political subdivisions,
supranational entities such as development banks, non-U.S. corporations, banks
or bank holding companies, or other non-U.S. issuers. The fund normally invests
at least 70% of its portfolio in investment grade debt securities. The fund may
invest up to 30% of its total assets in securities rated in the highest category
of below investment grade bonds or securities which, if unrated, are determined
by HIMCO to be of comparable quality. Securities rated below investment grade
are commonly referred to as "junk bonds".
The fund invests at least 65% of its total assets in debt securities with a
maturity of at least one year. Although the fund does not have a maximum
maturity term restriction, the fund tends to have an average maturity within the
intermediate-term range which is typically defined as between 5 to 10 years. The
fund may invest up to 15% of its total assets in preferred stocks, convertible
securities, and securities accompanied by warrants to purchase equity
securities. The fund will not invest in common stocks directly, but may retain,
for reasonable periods of time, common stocks acquired upon conversion of debt
securities or upon exercise of warrants acquired with debt securities. The fund
may invest up to 30% of its total assets in debt securities of non-U.S. issuers
and up to 10% of its total assets in securities denominated in foreign
currencies.
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 from selected industries that, from a
yield perspective, appear to be attractive. The portfolio manager assesses such
factors as a company's business environment, balance sheet, income statement,
anticipated earnings and management team.
- --------------------------------------------------------------------------------
MAIN RISKS. The major risk factors affecting this fund's performance are
interest rates and credit risk. You could lose money as a result of your
investment.
When interest rates rise, bond prices fall; generally the longer the fund's
maturity, the more sensitive it is to this risk.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. In general, lower-rated bonds have higher credit risks. If
certain sectors or investments don't perform as the fund expects, it could
underperform its peers or lose money.
High yield bonds and foreign securities may make the fund more sensitive to
market or economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government or other guarantees on portfolio securities do not apply to
the market value or current yield of the portfolio's securities or to the value
of the fund's shares.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[Hartford Chart]
<TABLE>
<S> <C>
97 10.80
98 7.48
99 -2.71
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
4.07% (2nd quarter, 1997) and the lowest quarterly return was -1.52% (2nd
quarter, 1997)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class A -7.09% 4.66%
Class B -8.30% 4.55%
Class C(1) -5.33% 5.01%
Lehman Government
Corporate Bond Index -2.15% 9.03%
</TABLE>
INDEX: The Lehman Brothers Government/Corporate Bond Index is a broad based
unmanaged, market-value-weighted index of all debt obligations of the U.S.
Treasury and U.S. Government agencies (excluding mortgaged-backed securities)
and of all publicly-issued fixed-rate, nonconvertible, investment grade domestic
corporate debt.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
26 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 31
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1996)
- Joined HIMCO in 1993
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) 4.50% 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price 4.50% None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.65% 0.65% 0.65%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.29% 0.29% 0.32%
Total operating expenses 1.29% 1.94% 1.97%
Fee waiver 0.05% 0.02%
Net expenses(1)(2) 1.24% 1.95%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.25%, 1.95% and 1.95%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 571 $ 699 $ 398
Year 3 $ 838 $ 915 $ 716
Year 5 $1,125 $1,256 $1,159
Year 10 $1,939 $2,281 $2,388
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 571 $ 199 $ 298
Year 3 $ 838 $ 615 $ 716
Year 5 $1,125 $1,056 $1,159
Year 10 $1,939 $2,281 $2,388
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 27
<PAGE> 32
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Money Market Fund seeks maximum current income
consistent with liquidity and preservation of capital.
INVESTMENT STRATEGY. The fund seeks to maintain a stable share price of $1.00.
The fund focuses on specific short-term U.S. dollar denominated money market
instruments which are rated in the first two investment tiers by at least one
nationally recognized statistical rating organization, or if unrated, determined
to be of comparable quality by HIMCO. Money market instruments include (1)
banker's acceptances; (2) obligations of governments (whether U.S. or non-U.S.)
and their agencies and instrumentalities; (3) short-term corporate obligations,
including commercial paper, notes, and bonds; (4) other short-term debt
obligations; (5) obligations of U.S. banks, non-U.S. branches of U.S. banks
(Eurodollars), U.S. branches and agencies of non-U.S. banks (Yankee dollars),
and non-U.S. branches of non-U.S. banks; (6) asset-backed securities; and (7)
repurchase agreements.
The fund purchases securities which it believes offer attractive returns
relative to the risks undertaken. In addition, the portfolio manager adjusts the
average maturity of the portfolio in anticipation of interest rate changes.
- --------------------------------------------------------------------------------
MAIN RISKS. The primary risks of this fund are interest rate risk, credit risk
and manager risk.
A rise in interest rates could cause a fall in the values of the fund's
securities.
Credit risk refers to the risk that a security's credit rating could be
downgraded affecting the value and, potentially the likelihood of repayment, of
the fund's securities.
Manager risk refers to the risk that if the manager does not effectively
implement the fund's investment goal and style, the fund could underperform its
peers.
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1.00 per share, there is a risk that
the fund's share price could fall below $1.00, which would make your shares less
than what you paid for them.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A TOTAL RETURNS
BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
[Hartford Chart]
<TABLE>
<S> <C>
97 4.73
98 4.69
99 4.32
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
1.19% (3rd quarter, 1997) and the lowest quarterly return was 0.98% (2nd
quarter, 1999)
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
------ (SINCE 7/22/96)
<S> <C> <C>
Class A 4.32% 4.58%
Class B -1.41% 2.61%
Class C(1) 1.55% 3.38%
60-Day Treasury Bill
Index 4.80% 5.04%
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term treasury
bills.
Current 7-day yield as of December 31, 1999: 4.77%
Effective 7-day yield (which indicates the effect of daily compounding) as of
December 31, 1999: 4.88%
Please call 1-888-843-7824 for the most recent current and effective yield
information.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance and
operating expenses less Class C share sales charges.
28 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 33
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
William H. Davison, Jr.
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1996)
- Joined HIMCO in 1990
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) None 5.00% 2.00%
Maximum load imposed on purchases as a
percentage of offering price None None 1.00%
Maximum deferred sales charge (load) None 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's
assets)
Management fees 0.50% 0.50% 0.50%
Distribution and service (12b-1) fees(1) 0.35% 1.00% 1.00%
Other expenses 0.30% 0.31% 0.34%
Total operating expenses 1.15% 1.81% 1.84%
Fee waiver 0.15% 0.11% 0.14%
Net expenses(1)(2) 1.00% 1.70% 1.70%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is
0.35% of average net assets, the fund's distributor
has contractually agreed to reduce the fee to 0.30%
through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has contractually 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 and extraordinary expenses, to
not more than 1.00%, 1.70% and 1.70%, respectively,
through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
EXAMPLE. These examples are intended to help you compare
the cost of investing in the fund with the cost of
investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods
indicated. The example also assumes that your investment
has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all
dividends and distributions. Although your actual costs
may be higher or lower, based on these assumptions your
costs would be:
You would pay the following expenses if you redeemed your
shares at the end of each period:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 103 $ 674 $ 373
Year 3 $ 352 $ 863 $ 664
Year 5 $ 622 $1,177 $1,080
Year 10 $1,390 $2,132 $2,240
</TABLE>
You would pay the following expenses if you did not redeem
your shares:
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Year 1 $ 103 $ 174 $ 273
Year 3 $ 352 $ 563 $ 664
Year 5 $ 622 $ 977 $1,080
Year 10 $1,390 $2,132 $2,240
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 29
<PAGE> 34
PRIOR PERFORMANCE OF SIMILAR FUNDS
- --------------------------------------------------------------------------------
Because the mutual funds that are the subject of this prospectus (the "Retail
Funds") began operations in July, 1996, or later, they have limited operating
and performance histories. However, the Capital Appreciation Fund, International
Opportunities Fund, Stock Fund, Dividend and Growth Fund and Advisers Fund are
modeled after existing funds (the "HLS Funds") that are managed by the same
portfolio managers at 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. The HLS Funds listed
below are the only funds advised by The Hartford's affiliates and sub-advised by
Wellington Management with similar investment objectives, policies and
strategies to their Retail Fund counterparts. 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 dates and asset sizes as of December 31, 1999. 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 inception
dates, expenses, asset sizes and cash flows.
<TABLE>
<CAPTION>
FUND, INCEPTION DATE, ASSET SIZE CORRESPONDING HLS FUND, INCEPTION DATE, ASSET SIZE
- -------------------------------- --------------------------------------------------
<S> <C>
Capital Appreciation (July 22, Hartford Capital Appreciation HLS Fund, Inc. (April 2,
1996) $1,623,012,202 1984) $7,985,996,377
International Opportunities Hartford International Opportunities HLS Fund, Inc. (July
(July 22, 1996) $125,034,101 2, 1990) $1,578,038,808
Stock (July 22, 1996) Hartford Stock HLS Fund, Inc. (August 31, 1977)
$1,551,776,783 $9,447,823,496
Dividend and Growth (July 22, Hartford Dividend and Growth HLS Fund, Inc. (March 8,
1996) $430,515,565 1994) $3,223,819,460
Advisers (July 22, 1996) Hartford Advisers HLS Fund, Inc. (March 31, 1983)
$1,640,237,707 $14,220,213,254
</TABLE>
30 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 35
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, 1999. 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 corresponding Retail
Fund are deducted to arrive at the net return. Please remember that past
performance is not indicative of future returns.
<TABLE>
<CAPTION>
10 YEARS OR
HLS FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
-------- ------ ------- ------- -----------------
<S> <C> <C> <C> <C>
HARTFORD CAPITAL APPRECIATION
HLS FUND, INC. (INCEPTION 4/2/84)
Class A expenses plus maximum load 28.88% 21.45% 22.62% 18.26%
Class A expenses with no load(1) 36.38% 23.76% 24.02% 18.93%
Class B expenses with redemption 30.43% 22.23% 22.98% 18.10%
Class B expenses without redemption 35.43% 22.90% 23.15% 18.10%
Class C expenses with maximum load and redemption 33.07% 22.48% 22.91% 17.98%
Class C expenses without load or redemption 35.43% 22.90% 23.15% 18.10%
HARTFORD INTERNATIONAL OPPORTUNITIES
HLS FUND, INC. (INCEPTION 7/2/90)
Class A expenses plus maximum load 31.02% 13.49% 13.16% 8.91%
Class A expenses with no load(1) 38.65% 15.65% 14.38% 9.56%
Class B expenses with redemption 32.68% 14.07% 13.33% 8.80%
Class B expenses without redemption 37.68% 14.84% 13.58% 8.80%
Class C expenses with maximum load and redemption 35.30% 14.45% 13.35% 8.68%
Class C expenses without load or redemption 37.68% 14.84% 13.58% 8.80%
HARTFORD STOCK HLS FUND, INC. (INCEPTION 8/31/77)
Class A expenses plus maximum load 12.10% 24.43% 25.80% 16.12%
Class A expenses with no load(1) 18.62% 26.80% 27.23% 16.78%
Class B expenses with redemption 12.80% 25.28% 26.19% 15.97%
Class B expenses without redemption 17.80% 25.92% 26.35% 15.97%
Class C expenses with maximum load and redemption 15.62% 25.50% 26.09% 15.85%
Class C expenses without load or redemption 17.80% 25.92% 26.35% 15.97%
HARTFORD DIVIDEND AND GROWTH
HLS FUND, INC. (INCEPTION 3/8/94)
Class A expenses plus maximum load -1.20% 14.34% 19.86% 17.14%
Class A expenses with no load(1) 4.55% 16.52% 21.23% 18.29%
Class B expenses with redemption -1.18% 14.95% 20.19% 17.38%
Class B expenses without redemption 3.82% 15.71% 20.38% 17.46%
Class C expenses with maximum load and redemption 1.78% 15.32% 20.14% 17.26%
Class C expenses without load or redemption 3.82% 15.71% 20.38% 17.46%
HARTFORD ADVISERS HLS FUND, INC. (INCEPTION 3/31/83)
Class A expenses plus maximum load 3.73% 16.60% 18.50% 12.55%
Class A expenses with no load(1) 9.76% 18.82% 19.84% 13.19%
Class B expenses with redemption 4.00% 17.26% 18.81% 12.40%
Class B expenses without redemption 9.00% 17.99% 19.01% 12.40%
Class C expenses with maximum load and redemption 6.91% 17.59% 18.77% 12.29%
Class C expenses without load or redemption 9.00% 17.99% 19.01% 12.40%
</TABLE>
- ---------------
(1) Certain persons may purchase Class A Shares that are not subject to the
Class A Initial Sales Charge and certain other persons may purchase Class A
Shares subject to less than the maximum Initial Sales Charge (see "Sales
Charge Reductions and Waivers" in this Prospectus).
THE HARTFORD MUTUAL FUNDS, INC. 31
<PAGE> 36
OTHER INVESTMENT STRATEGIES AND INVESTMENT MATTERS
- --------------------------------------------------------------------------------
USE OF MONEY MARKET INVESTMENTS
FOR TEMPORARY DEFENSIVE PURPOSES
From time to time, as part of its primary investment strategy, 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.
USE OF OPTIONS, FUTURES AND
OTHER DERIVATIVES
Each fund (other than the Money Market fund) may purchase and sell options,
enter into futures contracts or utilize other derivatives with respect to
stocks, bonds, groups of securities (such as financial indices), foreign
currencies or interest rates. These techniques, which are incidental to each
fund's primary strategies, permit a fund to gain exposure to a particular
security, group of securities, interest rate or index, and thereby have the
potential for a fund to earn returns that are similar to those which would be
earned by direct investments in those securities or instruments.
These techniques are also used to manage risk by hedging a fund's portfolio
investments. Hedging techniques may not always be available to the funds; and it
may not always be feasible for a fund to use hedging techniques even when they
are available.
Derivatives have risks, however. If the issuer of the derivative instrument does
not pay the amount due, a fund could lose money on the instrument. In addition,
the underlying security or investment on which the derivative is based, and the
derivative itself, may not perform the way the manager expected. As a result,
the use of these techniques may result in losses to a fund or increase
volatility in a fund's performance.
ABOUT EACH FUND'S INVESTMENT GOAL
Each fund's investment goal may be changed without approval of the shareholders
of the fund. A fund may not be able to achieve its goal.
TAX CONSEQUENCES OF PORTFOLIO
TRADING PRACTICES
At times each fund may engage in short-term trading, which could produce higher
brokerage expenses for a fund and higher taxable distributions to the fund's
shareholders. The funds are not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
ADDITIONAL INVESTMENT STRATEGIES
AND RISKS
Each fund may invest in various securities and engage in various investment
techniques which are not the principal focus of the fund and therefore are not
described in this prospectus. These securities and techniques, together with
their risks are discussed in the funds' Statement of Additional Information
which may be obtained free of charge by contacting the fund (see back cover for
address and phone number).
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
THE INVESTMENT MANAGER
Hartford Investment Financial Services Company ("HIFSCO") is the investment
manager to each fund. HIFSCO is a majority-owned indirect subsidiary of The
Hartford Financial Services Group, Inc. ("The Hartford"), a Connecticut
financial services company with over $165 billion in assets. As of December 31,
1999 HIFSCO had over $6 billion in assets under management. HIFSCO is
responsible for the management of each fund and supervises the activities of the
investment sub-advisers described below. HIFSCO is principally located at 200
Hopmeadow Street, Simsbury, Connecticut 06070.
THE INVESTMENT SUB-ADVISERS
Wellington Management Company, LLP ("Wellington Management") is the investment
sub-adviser to the Global Health Fund, Global Technology Fund, Advisers Fund,
Capital Appreciation Fund, Dividend and Growth Fund, Global Leaders Fund, Growth
and Income Fund, International Opportunities Fund, MidCap Fund, Small Company
Fund and Stock 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
32 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 37
Management and its predecessor organizations have provided investment advisory
services since 1928. As of December 31, 1999 Wellington Management had
investment management authority over approximately $235 billion in assets.
Wellington Management is principally located at 75 State Street, Boston,
Massachusetts 02109.
The Hartford Investment Management Company ("HIMCO(R)") 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, 1999 HIMCO and its
wholly-owned subsidiary had investment management authority over approximately
$59 billion in assets. HIMCO is principally located at 55 Farmington Avenue,
Hartford, Connecticut 06105.
MANAGEMENT FEES
Each Fund pays a monthly management fee to HIFSCO based on a stated percentage
of the Fund's average daily net asset value as follows:
MONEY MARKET FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.50%
Next $500,000,000 0.45%
Amount Over $1 Billion 0.40%
</TABLE>
BOND INCOME STRATEGY FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.65%
Next $500,000,000 0.55%
Amount Over $1 Billion 0.50%
</TABLE>
DIVIDEND AND GROWTH FUND, ADVISERS FUND AND HIGH YIELD FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.75%
Next $500,000,000 0.65%
Amount Over $1 Billion 0.60%
</TABLE>
CAPITAL APPRECIATION FUND, STOCK FUND AND GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.80%
Next $500,000,000 0.70%
Amount Over $1 Billion 0.65%
</TABLE>
SMALL COMPANY FUND, MIDCAP FUND, INTERNATIONAL OPPORTUNITIES FUND AND GLOBAL
LEADERS FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.85%
Next $500,000,000 0.75%
Amount Over $1 Billion 0.70%
</TABLE>
GLOBAL HEALTH FUND AND GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 1.00%
Next $500,000,000 0.95%
Amount Over $1 Billion 0.90%
</TABLE>
For the year ended December 31, 1999, the investment advisory fees paid to
HIFSCO, expressed as a percentage of net assets, were as follows:
<TABLE>
<CAPTION>
FUND NAME ANNUAL RATE
- --------- -----------
<S> <C>
The Hartford Global Health Fund(1) --
The Hartford Global Technology
Fund(1) --
The Hartford Advisers Fund 0.68%
The Hartford Bond Income Strategy
Fund 0.65%
The Hartford Capital Appreciation
Fund 0.75%
The Hartford Dividend and Growth
Fund 0.75%
The Hartford Global Leaders Fund 0.85%
The Hartford Growth and Income Fund 0.80%
The Hartford High Yield Fund 0.75%
The Hartford International
Opportunities Fund 0.85%
The Hartford MidCap Fund 0.85%
The Hartford Money Market Fund 0.50%
The Hartford Small Company Fund 0.85%
The Hartford Stock Fund 0.74%
</TABLE>
- ---------------
(1) Fund commenced operations in 2000.
THE HARTFORD MUTUAL FUNDS, INC. 33
<PAGE> 38
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. For
actual past expenses of each share class, see the fund-by-fund information
earlier in this prospectus.
Each class has adopted a Rule 12b-1 plan which allows the class to pay
distribution fees for the sale and distribution of its shares and for providing
services to shareholders. Because these fees are paid out of a fund's assets on
an ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
Purchase requests which, when combined with current holdings, for Class B shares
in excess of $500,000 or Class C shares in excess of $1,000,000, will be
processed as purchases of Class A shares.
CLASS A
- - Front-end sales charges, as described at right.
- - Distribution and service (12b-1) fees of 0.35% (currently 0.30% due to
contractual waiver by the distributor through at least April 30, 2001).
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.
HOW SALES CHARGES ARE CALCULATED
CLASS A sales charges and commissions paid to dealers for the Global Health
Fund, Global Technology Fund, Small Company Fund, Capital Appreciation Fund,
MidCap Fund, International Opportunities Fund, Global Leaders Fund, Stock Fund,
Growth and Income Fund, Dividend and Growth Fund and Advisers Fund are listed
below. The offering price includes the front end sales load.
<TABLE>
<CAPTION>
DEALER
AS A % OF AS A % COMMISSION AS
OFFERING OF NET PERCENTAGE OF
YOUR INVESTMENT PRICE INVESTMENT OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 5.50% 5.82% 4.75%
$ 50,000 -- $99,999 4.50% 4.71% 4.00%
$100,000 -- $249,999 3.50% 3.63% 3.00%
$250,000 -- $499,999 2.50% 2.56% 2.00%
$500,000 -- $999,999 2.00% 2.04% 1.75%
$1 million or more(1) 0% 0% 0%
</TABLE>
CLASS A sales charges and commissions paid to dealers for the Bond Income
Strategy Fund and High Yield Fund are as follows:
<TABLE>
<CAPTION>
DEALER
AS A % OF AS A % COMMISSION AS
OFFERING OF NET PERCENTAGE OF
YOUR INVESTMENT PRICE INVESTMENT OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 3.75%
$ 50,000 -- $99,999 4.00% 4.17% 3.50%
$100,000 -- $249,999 3.50% 3.63% 3.00%
$250,000 -- $499,999 2.50% 2.56% 2.00%
$500,000 -- $999,999 2.00% 2.04% 1.75%
$1 million or more(1) 0% 0% 0%
</TABLE>
(1) Investments of $1 million or more in Class A shares may be made with no
front-end sales charge. However, there is a contingent deferred sales charge
(CDSC) of 1% on any shares sold within 18 months of purchase. For purposes
of this CDSC, all purchases made during a calendar month are counted as
having been made on the first day of that month. The CDSC is based on the
lesser of the original purchase cost or the current market value of the
shares being sold, and is not charged on shares you acquired by reinvesting
your dividends and distributions. 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.
The distributor may pay up to the entire amount of the sales commission to
particular broker-dealers. The distributor may pay dealers of record commissions
on purchases over $1 million an amount of up to 1.0% of the first $4 million,
plus 0.50% of the next $6 million, plus 0.25% of share purchases over $10
million. This commission schedule is also effective for sales of Class A shares
made to investors which qualify under any of the last three categories listed
under "Waivers for Certain Investors".
CLASS B shares are offered at their net asset value per share, without any
initial sales charge. However, you
34 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 39
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
PURCHASE CDSC
<S> <C>
1st year 5.00%
2nd year 4.00%
3rd year 3.00%
4th year 3.00%
5th year 2.00%
6th year 1.00%
After 6 years None
</TABLE>
CLASS C sales charges for all funds, regardless of the amount that is being
purchased are as follows:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
DEALER
COMMISSION
AS A % OF AS A % OF AS PERCENTAGE
OFFERING NET OF OFFERING
PRICE INVESTMENT PRICE
<S> <C> <C>
1.00% 1.01% 1.00%
</TABLE>
<TABLE>
<CAPTION>
YEARS AFTER
PURCHASE CDSC
<S> <C>
1st year 1.00%
After 1 year None
</TABLE>
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. To
determine whether a CDSC applies the fund redeems shares in the following order:
(1) shares acquired through reinvestment of dividends and capital gains
distributions, (2) Class B shares held for over 6 years or Class C shares held
over 1 year, (3) effective June 1, 2000, shares representing an increase over
the original purchase cost, and (4) Class B shares held the longest during the
six-year period.
Although the funds do not charge a transaction fee, you may be charged a fee by
brokers for the purchase or sale of the funds' shares through that broker. This
transaction fee is separate from any sales charge that the funds may apply.
The distributor may pay commissions to dealers of up to 4% of the purchase price
of Class B shares purchased through dealers and up to 2% of the purchase price
of Class C shares purchased through dealers.
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 certain annuities or variable life insurance
products that are issued by affiliates of The Hartford, the current account
value of your contract or policy will be included. The eligible annuity and
life insurance products are discussed in the funds' Statement of Additional
Information. Participants in retirement plans receive breakpoints at the plan
level. You must notify your broker, and your broker must notify the funds,
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 Systematic Withdrawal Plan payments that are limited annually to no
more than 12% of the value of the account at the time the plan is initiated,
- - because of shareholder death or disability,
- - because of the death or disability of the grantor of a living trust,
- - under reorganization, liquidation, merger or acquisition transactions
involving other investment companies, and
- - for retirement plans under the following circumstances:
(1) to return excess contributions,
(2) hardship withdrawals as defined in the plan,
(3) under a Qualified Domestic Relations Order as defined in the Internal
Revenue Code,
(4) to meet minimum distribution requirements under the Internal Revenue
Code,
(5) to make "substantially equal payments" as described in Section 72(t) of
the Internal Revenue Code, and
(6) after separation from service.
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
THE HARTFORD MUTUAL FUNDS, INC. 35
<PAGE> 40
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 to the following individuals and institutions:
- - selling brokers and their employees and sales representatives,
- - financial representatives utilizing fund shares in fee-based investment
products under a 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,
- - individuals purchasing shares with the proceeds from shares redeemed from an
unaffiliated fund within the last 60 days on which an initial or contingent
deferred sales charge was paid (CDSC applies if redeemed within 18 months),
- - participants in certain retirement plans not administered by Hartford Life
Insurance Company or an affiliate with at least 100 eligible employees or if
the total amount invested is $500,000 or more (CDSC applies if redeemed within
18 months),
- - participants in retirement plans where Hartford Life Insurance Company or an
affiliate is the plan administrator, and
- - 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 (CDSC applies if
redeemed within 18 months).
CLASS C shares may be purchased without a front-end sales charge when purchased
through a broker-dealer that has entered into an agreement with the distributor
to waive this charge.
ADDITIONAL COMPENSATION TO BROKERS In addition to the commissions described
above, the distributor pays additional compensation to dealers based on a number
of factors described in the fund's statement of additional information. This
additional compensation is not paid by the shareholder.
OPENING AN ACCOUNT
NOTE FOR RETIREMENT PLAN PARTICIPANTS AND INVESTORS WHOSE SHARES ARE HELD BY
FINANCIAL REPRESENTATIVES.
If you hold your shares through a retirement plan or if your shares are held
with a financial representative you will need to make transactions through the
retirement plan administrator or your financial representative. Some of the
services and programs described in this prospectus may not be available or may
differ in such circumstances. In addition, some of the funds offered in this
prospectus may not be available in your retirement plan. You should check with
your retirement plan administrator or financial representative for further
details.
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
- subsequent investments: $25
Minimum investment amounts may be waived for present or former officers,
directors and employees and their families of The Hartford, Wellington
Management and their affiliates.
3 Complete the appropriate parts of the account application including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional application if you want to
add privileges later. If you have questions and you hold the shares through a
financial representative or retirement plan, please contact your financial
representative or plan administrator. If you hold the shares directly with the
fund, please call the transfer agent at the number shown below.
4 Make your initial investment selection. You, your financial representative or
plan administrator can initiate any purchase, exchange or sale of shares.
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 219054
KANSAS CITY, MO 64121-9054 OR CONTACT YOUR FINANCIAL REPRESENTATIVE OR PLAN
ADMINISTRATOR FOR INSTRUCTIONS AND ASSISTANCE.
</TABLE>
36 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 41
BUYING SHARES
<TABLE>
<C> <C> <S> <C> <C>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
BY CHECK
- Make out a check for the investment amount, - Make out a check for the investment amount,
CHECK ICON payable to "The Hartford Mutual Funds, Inc." payable to "The Hartford Mutual Funds, Inc."
- Deliver the check and your completed - Fill out the detachable investment slip from
application to your financial representative, an account statement. If no slip is available,
plan administrator or mail to the address include a note specifying the fund name, your
listed below. 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, plan
administrator or mail to the address listed
below.
BY EXCHANGE
- Call your financial representative, plan - Call your financial representative, plan
EXCHANGE ICON administrator or the transfer agent at the administrator or the transfer agent at the
number below to request an exchange. The number below to request an exchange. The
minimum exchange amount is $500 per fund. minimum exchange amount is $500 per fund.
BY WIRE
- Deliver your completed application to your - Instruct your bank to wire the amount of your
WIRE ICON financial representative, or mail it to the investment to:
address below. State Street Bank and Trust Company
Account # 9905-205-2
- Obtain your account number by calling your Routing # 011000028
financial representative or the phone number
below. Specify the fund name, your choice of share
class, the new account number and the name(s)
- Instruct your bank to wire the amount of your in which the account is registered. Your bank
investment to: may charge a fee to wire funds.
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
- See "By Wire" and "By Exchange" - Verify that your bank or credit union is a
PHONE ICON member of the Automated Clearing House (ACH)
system.
- Complete the "Telephone Exchanges and
Telephone Redemption" and "Bank Account or
Credit Union Information" sections on your
account application.
- Call the transfer agent at the number below to
verify that these features are in place on
your account.
- Tell the transfer agent representative the
fund name, your share class, your account
number, the name(s) in which the account is
registered and the amount of your investment.
To open or add to an account using the Automatic Investment Plan,
see "Additional Investor Services".
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 219054
KANSAS CITY, MO 64121-9054 OR CONTACT YOUR FINANCIAL REPRESENTATIVE OR PLAN
ADMINISTRATOR FOR INSTRUCTIONS AND ASSISTANCE.
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 37
<PAGE> 42
SELLING SHARES
<TABLE>
<C> <C> <S>
BY LETTER
- Write a letter of instruction or complete a power of
LETTER ICON attorney indicating the fund name, your share class, your
account number, the name(s) in which the account is
registered and the dollar value or number of shares you wish
to sell.
- Include all signatures and any additional documents that may
be required (see next page).
- Mail the materials to the address below or to your plan
administrator.
- A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
letter of instruction.
BY PHONE
- Restricted to sales of up to $50,000 in any 7-day period.
PHONE ICON - To place your order with a representative, call the transfer
agent at the number below between 8 A.M. and 6 P.M. Eastern
Time on most business days.
- For automated service 24 hours a day using your touch-tone
phone, call the number below.
BY WIRE OR ELECTRONIC FUNDS TRANSFER (EFT)
- Fill out the "Telephone Exchanges and Telephone Redemption"
WIRE ICON and "Bank Account or Credit Union Information" sections of
your new account application.
- Call the transfer agent to verify that the telephone
redemption privilege is in place on an account, or to
request the forms to add it to an existing account.
- Amounts of $1,000 or more will be wired on the next business
day. Your bank may charge a fee for this service.
- Amounts of less than $1,000 may be sent by EFT or by check.
Funds from EFT transactions are generally available by the
second business day. Your bank may charge a fee for this
service.
- Phone requests are limited to amounts up to $50,000 in a
7-day period.
BY EXCHANGE
- Obtain a current prospectus for the fund into which you are
ARROW ICON exchanging by calling your financial representative or the
transfer agent at the number below.
- Call your financial representative or the transfer agent to
request an exchange.
BY CHECK -- APPLIES TO MONEY MARKET FUND (CLASS A SHARES ONLY)
- Fill out the checkwriting section of the application.
CHECK ICON - Request checkwriting on your account application.
- Verify that the shares to be sold were purchased more than
15 days earlier or were purchased by wire.
- Write a check for any amount over $100.
To sell shares through a systematic withdrawal plan, see "Additional Investor
Services".
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 219054
KANSAS CITY, MO 64121-9054 OR CONTACT YOUR FINANCIAL REPRESENTATIVE OR PLAN
ADMINISTRATOR FOR INSTRUCTIONS AND ASSISTANCE.
</TABLE>
38 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 43
SELLING SHARES IN WRITING
<TABLE>
<C> <C> <S>
BY LETTER
In certain circumstances, you will need to make your request to sell shares in
writing. You may need to include additional items with your request, as shown
in the table below. You may also need to include a signature guarantee, which
protects you against fraudulent orders. You will need a signature guarantee
if:
- your address of record has changed within the past 30 days
LETTER ICON
- you are selling more than $50,000 worth of shares
- you are requesting payment other than by a check mailed to
the address of record and payable to the registered owner(s)
Please note that a notary public CANNOT provide a signature guarantee. Please
check with a representative of your bank or other financial institution about
obtaining a signature guarantee.
REQUIREMENTS FOR WRITTEN REQUESTS BY SELLER
OWNERS OF INDIVIDUAL, JOINT, SOLE PROPRIETORSHIP, UGMA/UTMA (CUSTODIAL
ACCOUNTS FOR MINORS) OR GENERAL PARTNER ACCOUNTS.
- Letter of instruction.
- On the letter, the signatures and titles of all persons
authorized to sign for the account, exactly as the account
is registered.
- Signature guarantee if applicable (see above).
OWNERS OF CORPORATE OR ASSOCIATION ACCOUNTS.
- Letter of instruction.
- Corporate resolution, certified within the past twelve
months.
- On the letter and the resolution, the signature of the
person(s) authorized to sign for the account.
- Signature guarantee if applicable (see above).
OWNERS OR TRUSTEES OF TRUST ACCOUNTS.
- Letter of instruction.
- On the letter, the signature(s) of the trustee(s).
- Provide a copy of the trust document certified within the
past twelve months.
- Signature guarantee if applicable (see above).
JOINT TENANCY SHAREHOLDERS WHOSE CO-TENANTS ARE DECEASED.
- Letter of instruction signed by surviving tenant.
- Copy of death certificate.
- Signature guarantee if applicable (see above).
EXECUTORS OF SHAREHOLDER ESTATES.
- Letter of instruction signed by executor.
- Copy of order appointing executor, certified within the past
twelve months.
- Signature guarantee if applicable (see above).
ADMINISTRATORS, CONSERVATORS, GUARDIANS AND OTHER SELLERS OR ACCOUNT TYPES
NOT LISTED ABOVE.
- Call 1-888-843-7824 for instructions.
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 219054
KANSAS CITY, MO 64121-9054 OR CONTACT YOUR FINANCIAL REPRESENTATIVE OR PLAN
ADMINISTRATOR FOR INSTRUCTIONS AND ASSISTANCE.
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 39
<PAGE> 44
TRANSACTION POLICIES
- --------------------------------------------------------------------------------
VALUATION OF SHARES
The net asset value per share (NAV) for each fund and class is determined each
business day at the close of regular trading on the New York Stock Exchange
("NYSE") (typically 4 p.m. Eastern Time). Except for the Money Market Fund, the
funds use market prices in valuing portfolio securities, but may use fair-value
estimates, as determined by HIFSCO under the direction of the Board of
Directors, if reliable market prices are unavailable. Fair value pricing may be
used by a fund when current market values are unavailable or when an event
occurs after the close of the exchange on which the fund's portfolio securities
are principally traded that is likely to have changed the value of the
securities. The use of fair value pricing by a fund may cause the net asset
value of its shares to differ significantly from the net asset value that would
be calculated using current market values. The Money Market Fund's assets and
debt securities with remaining maturities of 60 days or less are valued at
amortized cost.
Trading on many foreign securities markets is completed at various times before
or after the close of the NYSE or on days the NYSE is not open for business.
Consequently, the calculation of a fund's NAV may take place at a time that is
different than when prices are determined for certain foreign securities. As a
result, events affecting the values of foreign portfolio securities that occur
after the close of the NYSE will not be reflected in a fund's calculation of
NAV.
BUY AND SELL PRICES
When you buy shares, you pay the NAV plus any applicable sales charges. When you
sell shares, you receive the NAV less any applicable sales charges.
EXECUTION OF REQUESTS
Each fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV to be calculated after your request is received, if your order is complete
(has all required information), 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 redemption 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. You may be
subject to tax liability or sales charges as a result of your exchange.
RIGHT TO REJECT PURCHASE ORDERS/
MARKET TIMING
Purchases and exchanges should be made for investment purposes only. The Funds
reserve the right to reject or restrict any specific purchase request or to
modify or terminate your exchange privileges if a fund determines that you are
or have engaged in market timing. A market timer is defined as a shareholder
that exchanges shares more than twice out of the same fund in a 90-day period
(excluding automatic programs).
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 within this time, your fund may close out your account and mail you
the proceeds. You will not be charged a CDSC if your account is closed for this
reason, and your account will not be closed if its drop in value is due to fund
performance or the effects of sales charges.
SALES IN ADVANCE OF
PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 15 business days after the purchase.
40 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 45
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. 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.
PAYMENT REQUIREMENTS
All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks and made payable to The Hartford Mutual Funds, Inc., or in the case
of a retirement account, to the custodian or trustee. You may not purchase
shares with a third party check.
If your check does not clear, your purchase will be canceled and you will be
liable for any losses or fees that the funds or HIFSCO has incurred.
Certain broker-dealers and financial institutions may enter confirmed purchase
orders with the funds on behalf of customers, by phone or other electronic
means, with payment to follow within the customary settlement period (generally
within three business days). If payment is not received by that time, the order
will be canceled and the broker-dealer or financial institution will be held
liable for the resulting fees or losses.
DIVIDENDS AND ACCOUNT POLICIES
ACCOUNT STATEMENTS In general, you will receive account statements as follows:
- - after every transaction (except a dividend or distribution 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 AND DISTRIBUTIONS 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 Global Health Fund, Global
Technology Fund, 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 and distributions you receive from a fund,
whether reinvested or taken as cash, are generally considered taxable.
Distributions from a fund's long-term capital gains are taxable as capital
gains; distributions from short-term capital gains and income are generally
taxable as ordinary income. Some dividends paid in January may be taxable as if
they had been paid the previous December. Tax rates may vary depending on how
long a fund investment is held. See your application for distribution options.
The Form 1099 that is mailed to you every January details your dividends and
distributions and their federal tax category, although you should verify your
tax liability with your tax professional.
TAXABILITY OF TRANSACTIONS Unless your shares are held in a qualified
retirement account, 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") allow you to
initiate a purchase or redemption for as little as $100 or as much as $50,000
between your bank account and fund account using the ACH network. Sales charges
and initial purchase minimums apply.
AUTOMATIC INVESTMENT PLAN (AIP) AIP lets you set up regular investments from
your paycheck or bank account to The Hartford Mutual Fund(s) of your choice. You
determine the frequency and amount of your investments, and you can terminate
your program at any time. To establish:
- - Complete the appropriate parts of your account application.
- - If you are using AIP to open an account, make out a check ($25 minimum) for
your first investment amount payable to "The Hartford Mutual Funds, Inc."
Deliver your check and application to your financial representative or the
transfer agent.
THE HARTFORD MUTUAL FUNDS, INC. 41
<PAGE> 46
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. A signature guarantee is required if the payee is
someone other than the registered owner.
- - 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 distributions paid by one fund into the same class
of another fund. To establish:
- - Fill out the relevant portion of the account application.
- - Be sure that the accounts involved have identical registrations.
RETIREMENT PLANS The Hartford Mutual Funds, Inc. offer a range of retirement
plans, including traditional and Roth IRAs, SIMPLE plans, SEPs and 401(k) plans.
Using these plans, you can invest in any fund offered by The Hartford Mutual
Funds, Inc. with a low minimum investment of $250. To find out more, call
1-888-843-7824.
42 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 47
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)
employee benefit or retirement 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 or other large institutional
investors; (iii) investment companies; and (iv) employee benefit or retirement
plans of The Hartford, Wellington Management or broker-dealer wholesalers and
their affiliates.
Class Y shares are available to eligible institutional investors at net asset
value without the imposition of an initial or deferred sales charge and are not
subject to ongoing distribution fees imposed under a plan adopted pursuant to
Rule 12b-1 under the 1940 Act. The minimum initial investment in Class Y shares
is $1,000,000, but this requirement may be waived at the discretion of the
fund's officers. The differences in class expenses may affect performance.
The Systematic Withdrawal Plan, Dollar Cost Averaging Plan, Automatic Dividend
Diversification Plan and Automatic Investment Plan are not available for Class Y
shares.
If you are considering a purchase of Class Y shares of a fund, please call the
Transfer Agent at 1-888-843-7824 to obtain information about eligibility.
THE HARTFORD MUTUAL FUNDS, INC. 43
<PAGE> 48
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD SMALL COMPANY FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99 12/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.31 $12.16 $10.68 $10.00 $13.09 $12.04
Income from investment operations:
Net investment income (loss) (0.05) (0.06) (0.02) (0.02) (0.09) (0.12)
Net realized and unrealized gain (loss)
on investments 8.52 1.33 2.05 1.42 8.26 1.29
-------- ------- ------- ------ ------- -------
Total from investment operations 8.47 1.27 2.03 1.40 8.17 1.17
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (1.30) (0.12) (0.55) (0.72) (1.30) (0.12)
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
-------- ------- ------- ------ ------- -------
Total distributions (1.30) (0.12) (0.55) (0.72) (1.30) (0.12)
-------- ------- ------- ------ ------- -------
Net asset value, end of period $20.48 $13.31 $12.16 $10.68 $19.96 $13.09
======== ======= ======= ====== ======= =======
TOTAL RETURN(3) 65.66% 10.46% 19.28% 14.11%(4) 64.46% 9.73%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $109,559 $37,623 $19,391 $4,673 $53,358 $18,345
Ratio of expenses to average net assets
before waivers and reimbursements 1.51% 1.57% 1.82% 4.29%(5) 2.15% 2.22%
Ratio of expenses to average net assets
after waivers and reimbursements 1.45% 1.45% 1.45% 1.45%(5) 2.15% 2.15%
Ratio of net investment income (loss)
to average net assets (0.92%) (0.79%) (0.61%) (0.60%)(5) (1.62%) (1.49%)
Portfolio turnover rate(6) 176.74% 266.82% 255.37% 69.92% 176.74% 266.82%
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/31/98-
12/31/97 12/31/96(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.65 $10.00 $13.09 $12.49
Income from investment operations:
Net investment income (loss) (0.03) (0.02) (0.08) (0.02)
Net realized and unrealized gain (loss)
on investments 1.97 1.39 8.26 0.62
------- ------ ------- -------
Total from investment operations 1.94 1.37 8.18 0.60
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00
Distributions from capital gains (0.55) (0.72) (1.30) 0.00
Return of capital 0.00 0.00 0.00 0.00
------- ------ ------- -------
Total distributions (0.55) (0.72) (1.30) 0.00
------- ------ ------- -------
Net asset value, end of period $12.04 $10.65 $19.97 $13.09
======= ====== ======= =======
TOTAL RETURN(3) 18.49% 13.81%(4) 64.58% 4.80%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $9,694 $241 $37,672 $2,765
Ratio of expenses to average net assets
before waivers and reimbursements 2.53% 20.03%(5) 2.20% 2.46%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 2.15% 2.15%(5) 2.15% 2.15%(5)
Ratio of net investment income (loss)
to average net assets (1.30%) (1.30%)(5) (1.61%) (1.49%)(5)
Portfolio turnover rate(6) 255.37% 69.92% 176.74% 266.82%
</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) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) Not annualized.
(5) Annualized.
(6) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
44 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 49
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD CAPITAL APPRECIATION FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99 12/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $20.42 $19.90 $13.36 $10.00 $20.08 $19.71
Income from investment operations:
Net investment income (loss) (0.07) (0.10) (0.03) (0.03) (0.19) (0.21)
Net realized and unrealized gain (loss)
on investments 13.28 0.75 7.34 3.80 12.94 0.71
-------- -------- -------- ------- -------- --------
Total from investment operations 13.21 0.65 7.31 3.77 12.75 0.50
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (1.91) (0.13) (0.77) (0.41) (1.91) (0.13)
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- ------- -------- --------
Total distributions (1.91) (0.13) (0.77) (0.41) (1.91) (0.13)
-------- -------- -------- ------- -------- --------
Net asset value, end of period $31.72 $20.42 $19.90 $13.36 $30.92 $20.08
======== ======== ======== ======= ======== ========
TOTAL RETURN(3) 66.76% 3.26% 55.11% 37.75%(4) 65.58% 2.52%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $797,656 $364,951 $233,601 $9,028 $569,201 $290,756
Ratio of expenses to average net assets
before waivers and reimbursements 1.38% 1.49% 1.69% 4.15%(5) 2.02% 2.15%
Ratio of expenses to average net assets
after waivers and reimbursements 1.33% 1.44% 1.45% 1.45%(5) 2.02% 2.15%
Ratio of net investment income (loss)
to average net assets (0.61%) (0.70%) (0.80%) (0.70%)(5) (1.31%) (1.39%)
Portfolio turnover rate(6) 168.97% 123.42% 119.62% 149.99%(4) 168.97% 123.42%
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/31/98-
12/31/97 12/31/96(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.32 $10.00 $20.08 $19.67
Income from investment operations:
Net investment income (loss) (0.06) (0.02) (0.12) (0.06)
Net realized and unrealized gain (loss)
on investments 7.22 3.75 12.84 0.47
-------- ------- -------- -------
Total from investment operations 7.16 3.73 12.72 0.41
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00
Distributions from capital gains (0.77) (0.41) (1.91) 0.00
Return of capital 0.00 0.00 0.00 0.00
-------- ------- -------- -------
Total distributions (0.77) (0.41) (1.91) 0.00
-------- ------- -------- -------
Net asset value, end of period $19.71 $13.32 $30.89 $20.08
======== ======= ======== =======
TOTAL RETURN(3) 54.15% 37.35%(4) 65.44% 2.10%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $174,392 $889 $191,466 $15,231
Ratio of expenses to average net assets
before waivers and reimbursements 2.38% 9.05%(5) 2.09% 2.29%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 2.15% 2.15%(5) 2.09% 2.15%(5)
Ratio of net investment income (loss)
to average net assets (1.46%) (1.53%)(5) (1.37%) (1.34%)(5)
Portfolio turnover rate(6) 119.62% 149.99%(4) 168.97% 123.42%
</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) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) Not annualized.
(5) Annualized.
(6) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 45
<PAGE> 50
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MIDCAP FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS C -
CLASS A - CLASS B - PERIOD ENDED:
PERIOD ENDED: PERIOD ENDED: 7/31/98-
12/31/99 12/31/98(1) 12/31/99 12/31/98(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.30 $10.00 $12.22 $10.00 $12.21 $11.23
Income from investment operations:
Net investment income (loss) (0.03) (0.05) (0.03) (0.10) (0.04) (0.03)
Net realized and unrealized gain (loss)
on investments 6.08 2.35 5.92 2.32 5.93 1.01
-------- ------- ------- ------- ------- -------
Total from investment operations 6.05 2.30 5.89 2.22 5.89 0.98
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (0.57) 0.00 (0.57) 0.00 (0.57) 0.00
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
-------- ------- ------- ------- ------- -------
Total distributions (0.57) 0.00 (0.57) 0.00 (0.57) 0.00
-------- ------- ------- ------- ------- -------
Net asset value, end of period $17.78 $12.30 $17.54 $12.22 $17.53 $12.21
======== ======= ======= ======= ======= =======
TOTAL RETURN(3) 50.17% 23.12% 49.10% 22.32% 49.22% 8.70%(5)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $118,194 $24,294 $50,301 $8,403 $48,310 $1,077
Ratio of expenses to average net assets
before waivers and reimbursements 1.51% 1.62% 2.17% 2.31% 2.22% 2.57%(6)
Ratio of expenses to average net assets
after waivers and reimbursements 1.45% 1.45% 2.15% 2.15% 2.15% 2.15%(6)
Ratio of net investment income (loss) to
average net assets (0.79%) (0.78%) (1.48%) (1.48%) (1.48%) (1.45%)(6)
Portfolio turnover rate(4) 122.52% 139.02% 122.52% 139.02% 122.52% 139.02%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
December 31, 1997.
(2) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(5) Not annualized.
(6) Annualized.
46 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 51
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99 12/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.89 $10.58 $10.72 $10.00 $11.73 $10.49
Income from investment operations:
Net investment income (loss) 0.06 0.07 0.09 (0.02) 0.01 0.01
Net realized and unrealized gain (loss)
on investments 4.46 1.26 (0.01) 0.79 4.32 1.23
-------- ------- ------- ------ -------- -------
Total from investment operations 4.52 1.33 0.08 0.81 4.33 1.24
Less distributions:
Dividends from net investment income (0.15) (0.02) (0.05) (0.06) (0.06) 0.00
Distributions from capital gains (0.83) 0.00 (0.17) (0.03) (0.83) 0.00
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
-------- ------- ------- ------ -------- -------
Total distributions (0.98) (0.02) (0.22) (0.09) (0.89) 0.00
-------- ------- ------- ------ -------- -------
Net asset value, end of period $15.43 $11.89 $10.58 $10.72 $15.17 $11.73
======== ======= ======= ====== ======== =======
TOTAL RETURN(3) 39.13% 12.53% 0.84% 8.14%(4) 38.11% 11.82%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $63,281 $32,014 $15,701 $4,294 $22,835 $11,767
Ratio of expenses to average net assets
before waivers and reimbursements 1.61% 1.89% 2.30% 5.40%(5) 2.26% 2.56%
Ratio of expenses to average net assets
after waivers and reimbursements 1.56% 1.65% 1.65% 1.65%(5) 2.26% 2.35%
Ratio of net investment income (loss)
to average net assets 0.61% 0.69% 0.88% 0.51%(5) (0.09%) 0.01%
Portfolio turnover rate(6) 128.26% 148.58% 59.16% 21.51%(4) 128.26% 148.58%
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/98-
12/31/97 12/31/96(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.69 $10.00 $11.74 $12.26
Income from investment operations:
Net investment income (loss) 0.07 (0.01) (0.02) (0.01)
Net realized and unrealized gain (loss)
on investments (0.06) 0.80 4.33 (0.49)
------- ------ ------- -------
Total from investment operations 0.01 0.79 4.31 (0.50)
Less distributions:
Dividends from net investment income (0.04) (0.07) (0.12) (0.03)
Distributions from capital gains (0.17) (0.03) (0.83) 0.00
Return of capital 0.00 0.00 0.00 0.00
------- ------ ------- -------
Total distributions (0.21) (0.10) (0.95) (0.03)
------- ------ ------- -------
Net asset value, end of period $10.49 $10.69 $15.10 $11.74
======= ====== ======= =======
TOTAL RETURN(3) 0.12% 7.86%(4) 37.98% (4.05%)(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $7,188 $163 $13,514 $1,379
Ratio of expenses to average net assets
before waivers and reimbursements 3.03% 32.61%(5) 2.31% 2.83%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 2.35% 2.35%(5) 2.31% 2.35%(5)
Ratio of net investment income (loss)
to average net assets (0.05%) (0.86%)(5) (0.13%) (0.71%)(5)
Portfolio turnover rate(6) 59.16% 21.51%(4) 128.26% 148.58%
</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) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) Not annualized.
(5) Annualized.
(6) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 47
<PAGE> 52
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GLOBAL LEADERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
9/30/98- 9/30/98- 9/30/98-
12/31/99 12/31/98(1) 12/31/99 12/31/98(1) 12/31/99 12/31/98(1)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.67 $10.00 $12.65 $10.00 $12.65 $10.00
Income from investment operations:
Net investment income (loss) 0.00 (0.01) (0.02) (0.02) (0.02) (0.02)
Net realized and unrealized gain (loss)
on investments 6.01 3.03 5.89 3.02 5.89 3.02
------- ------ ------- ------ ------- ------
Total from investment operations 6.01 3.02 5.87 3.00 5.87 3.00
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (0.12) (0.35) (0.12) (0.35) (0.12) (0.35)
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
------- ------ ------- ------ ------- ------
Total distributions (0.12) (0.35) (0.12) (0.35) (0.12) (0.35)
------- ------ ------- ------ ------- ------
Net asset value, end of period $18.56 $12.67 $18.40 $12.65 $18.40 $12.65
======= ====== ======= ====== ======= ======
TOTAL RETURN(2) 47.68% 30.36%(4) 46.64% 30.16%(4) 46.64% 30.16%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $84,632 $3,771 $24,588 $486 $43,012 $517
Ratio of expenses to average net assets
before waivers and reimbursements 1.62% 2.71%(5) 2.29% 3.55%(5) 2.33% 3.57%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 1.57% 1.65%(5) 2.29% 2.35%(5) 2.33% 2.35%(5)
Ratio of net investment income (loss) to
average net assets (0.15%) (0.19%)(5) (0.86%) (0.92%)(5) (0.89%) (0.90%)(5)
Portfolio turnover rate(3) 203.74% 49.04% 203.74% 49.04% 203.74% 49.04%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
48 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 53
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD STOCK FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99 12/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $19.70 $15.16 $11.53 $10.00 $19.36 $15.01
Income from investment operations:
Net investment income (loss) 0.00 (0.01) 0.00 0.02 (0.07) (0.05)
Net realized and unrealized gain (loss)
on investments 4.36 4.75 3.66 1.53 4.19 4.60
-------- -------- ------ ------ -------- --------
Total from investment operations 4.36 4.74 3.66 1.55 4.12 4.55
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (0.42) (0.19) (0.03) (0.02) (0.42) (0.19)
Return of capital 0.00 (0.01) 0.000 0.000 0.00 (0.01)
-------- -------- ------ ------ -------- --------
Total distributions (0.42) (0.20) (0.03) (0.02) (0.42) (0.20)
-------- -------- ------ ------ -------- --------
Net asset value, end of period $23.64 $19.70 $15.16 $11.53 $23.06 $19.36
======== ======== ====== ====== ======== ========
TOTAL RETURN(3) 22.31% 31.33% 31.78% 15.50%(4) 21.46% 30.38%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $752,763 $268,226 $65,763 $6,273 $462,318 $185,205
Ratio of expenses to average net assets
before waivers and reimbursements 1.38% 1.49% 1.69% 4.01%(5) 2.03% 2.16%
Ratio of expenses to average net assets
after waivers and reimbursements 1.33% 1.44% 1.45% 1.45%(5) 2.03% 2.15%
Ratio of net investment income (loss)
to average net assets (0.06%) (0.07%) 0.06% 0.71%(5) (0.75%) (0.77%)
Portfolio turnover rate(6) 33.62% 37.03% 42.83% 11.87%(4) 33.62% 37.03%
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/31/98-
12/31/97 12/31/96(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.50 $10.00 $19.36 $18.53
Income from investment operations:
Net investment income (loss) (0.02) 0.00 (0.08) (0.02)
Net realized and unrealized gain (loss)
on investments 3.56 1.52 4.19 1.22
------- ------ -------- -------
Total from investment operations 3.54 1.52 4.11 1.20
Less distributions:
Dividends from net investment income 0.00 (0.02) 0.00 0.00
Distributions from capital gains (0.03) 0.00 (0.42) (0.35)
Return of capital 0.00 0.00 0.00 (0.02)
------- ------ -------- -------
Total distributions (0.03) (0.02) (0.42) (0.37)
------- ------ -------- -------
Net asset value, end of period $15.01 $11.50 $23.05 $19.36
======= ====== ======== =======
TOTAL RETURN(3) 30.82% 15.20%(4) 21.40% 6.60%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $35,294 $1,254 $305,566 $36,039
Ratio of expenses to average net assets
before waivers and reimbursements 2.38% 7.76%(5) 2.07% 2.24%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 2.15% 2.15%(5) 2.07% 2.15%(5)
Ratio of net investment income (loss)
to average net assets (0.66%) (0.12%)(5) (0.78%) (0.76%)(5)
Portfolio turnover rate(6) 42.83% 11.87%(4) 33.62% 37.03%
</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) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) Not annualized.
(5) Annualized.
(6) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 49
<PAGE> 54
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GROWTH AND INCOME FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
4/30/98- 4/30/98- 7/31/98-
12/31/99 12/31/98(1) 12/31/99 12/31/98(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.45 $10.00 $11.41 $10.00 $11.41 $10.14
Income from investment operations:
Net investment income (loss) 0.01 0.02 (0.02) (0.01) (0.03) 0.01
Net realized and unrealized gain (loss)
on investments 2.36 1.45 2.29 1.43 2.30 1.29
------- ------- ------- ------ ------- ------
Total from investment operations 2.37 1.47 2.27 1.42 2.27 1.30
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from capital gains (0.10) (0.02) (0.10) (0.01) (0.10) 0.00
Return of capital 0.00 0.00 0.00 0.00 0.00 (0.03)
------- ------- ------- ------ ------- ------
Total distributions (0.10) (0.02) (0.10) (0.01) (0.10) (0.03)
------- ------- ------- ------ ------- ------
Net asset value, end of period $13.72 $11.45 $13.58 $11.41 $13.58 $11.41
======= ======= ======= ====== ======= ======
TOTAL RETURN(3) 20.80% 14.78%(5) 20.00% 14.21%(5) 19.98% 12.80%(5)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $74,764 $11,120 $20,375 $3,538 $29,265 $3,726
Ratio of expenses to average net assets
before waivers and reimbursements 1.49% 1.63%(6) 2.13% 2.32%(6) 2.16% 2.38%(6)
Ratio of expenses to average net assets
after waivers and reimbursements 1.44% 1.45%(6) 2.13% 2.15%(6) 2.15% 2.15%(6)
Ratio of net investment income (loss) to
average net assets 0.01% 0.23%(6) (0.68%) (0.47%)(6) (0.69%) (0.53%)(6)
Portfolio turnover rate(4) 52.98% 35.10% 52.98% 35.10% 52.98% 35.10%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
April 30, 1998.
(2) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(5) Not annualized.
(6) Annualized.
50 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 55
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD DIVIDEND AND GROWTH FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99 12/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $16.62 $14.72 $11.45 $10.00 $16.47 $14.61
Income from investment operations:
Net investment income (loss) 0.15 0.15 0.13 0.07 0.04 0.06
Net realized and unrealized gain (loss)
on investments 0.60 1.97 3.40 1.46 0.58 1.92
-------- ------- ------ ------ -------- -------
Total from investment operations 0.75 2.12 3.53 1.53 0.62 1.98
Less distributions:
Dividends from net investment income (0.17) (0.15) (0.12) (0.06) (0.05) (0.05)
Distributions from capital gains (0.35) (0.07) (0.14) (0.02) (0.35) (0.07)
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
-------- ------- ------ ------ -------- -------
Total distributions (0.52) (0.22) (0.26) (0.08) (0.40) (0.12)
-------- ------- ------ ------ -------- -------
Net asset value, end of period $16.85 $16.62 $14.72 $11.45 $16.69 $16.47
======== ======= ====== ====== ======== =======
TOTAL RETURN(3) 4.57% 14.47% 30.99% 15.29%(4) 3.82% 13.62%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $242,054 $182,495 $67,861 $6,083 $121,977 $108,344
Ratio of expenses to average net assets
before waivers and reimbursements 1.38% 1.43% 1.64% 4.17%(5) 2.02% 2.10%
Ratio of expenses to average net assets
after waivers and reimbursements 1.33% 1.38% 1.40% 1.40%(5) 2.02% 2.10%
Ratio of net investment income (loss)
to average net assets 0.94% 1.08% 1.42% 1.95%(5) 0.25% 0.39%
Portfolio turnover rate(6) 50.21% 46.43% 28.75% 29.80%(4) 50.21% 46.43%
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/98-
12/31/97 12/31/96(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.40 $10.00 $16.48 $15.94
Income from investment operations:
Net investment income (loss) 0.13 0.01 0.04 0.05
Net realized and unrealized gain (loss)
on investments 3.30 1.48 0.58 0.70
------- ------ ------- ------
Total from investment operations 3.43 1.49 0.62 0.75
Less distributions:
Dividends from net investment income (0.08) (0.07) (0.08) (0.10)
Distributions from capital gains (0.14) (0.02) (0.35) (0.11)
Return of capital 0.00 0.00 0.00 0.00
------- ------ ------- ------
Total distributions (0.22) (0.09) (0.43) (0.21)
------- ------ ------- ------
Net asset value, end of period $14.61 $11.40 $16.67 $16.48
======= ====== ======= ======
TOTAL RETURN(3) 30.20% 14.82%(4) 3.76% 4.82%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $33,730 $33,741 $42,869 $9,682
Ratio of expenses to average net assets
before waivers and reimbursements 2.34% 12.97%(5) 2.07% 2.20%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 2.10% 2.10%(5) 2.07% 2.10%(5)
Ratio of net investment income (loss)
to average net assets 0.69% 0.82%(5) 0.21% 0.23%(5)
Portfolio turnover rate(6) 28.75% 29.80%(4) 50.21% 46.43%
</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) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) Not annualized.
(5) Annualized.
(6) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 51
<PAGE> 56
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD ADVISERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99 12/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.71 $13.41 $11.08 $10.00 $15.59 $13.33
Income from investment operations:
Net investment income (loss) 0.27 0.23 0.16 0.09 0.16 0.15
Net realized and unrealized gain (loss)
on investments 1.60 2.58 2.41 1.07 1.58 2.54
-------- -------- ------- ------- -------- --------
Total from investment operations 1.87 2.81 2.57 1.16 1.74 2.69
Less distributions:
Dividends from net investment income (0.25) (0.25) (0.17) (0.08) (0.15) (0.17)
Distributions from capital gains (0.31) (0.26) (0.07) 0.00 (0.31) (0.26)
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- ------- ------- -------- --------
Total distributions (0.56) (0.51) (0.24) (0.08) (0.46) (0.43)
-------- -------- ------- ------- -------- --------
Net asset value, end of period $17.02 $15.71 $13.41 $11.08 $16.87 $15.59
======== ======== ======= ======= ======== ========
TOTAL RETURN(3) 12.08% 21.09% 23.30% 11.56%(4) 11.29% 20.27%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $693,136 $316,435 $98,633 $14,347 $555,338 $237,959
Ratio of expenses to average net assets
before waivers and reimbursements 1.31% 1.43% 1.60% 2.99%(5) 1.97% 2.11%
Ratio of expenses to average net assets
after waivers and reimbursements 1.26% 1.38% 1.40% 1.40%(5) 1.97% 2.10%
Ratio of net investment income (loss)
to average net assets 1.72% 1.67% 1.54% 2.13%(5) 1.00% 0.98%
Portfolio turnover rate(6) 34.63% 40.24% 38.62% 19.75%(4) 34.63% 40.24%
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/98-
12/31/97 12/31/96(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.05 $10.00 $15.73 $15.56
Income from investment operations:
Net investment income (loss) 0.16 0.02 0.17 0.16
Net realized and unrealized gain (loss)
on investments 2.31 1.11 1.58 0.64
------- ------ -------- -------
Total from investment operations 2.47 1.13 1.75 0.80
Less distributions:
Dividends from net investment income (0.12) (0.08) (0.15) (0.23)
Distributions from capital gains (0.07) 0.00 (0.31) (0.40)
Return of capital 0.00 0.00 0.00 0.00
------- ------ -------- -------
Total distributions (0.19) (0.08) (0.46) (0.63)
------- ------ -------- -------
Net asset value, end of period $13.33 $11.05 $17.02 $15.73
======= ====== ======== =======
TOTAL RETURN(3) 22.44% 11.28%(4) 11.29% 5.25%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $39,334 $1,499 $323,631 $54,907
Ratio of expenses to average net assets
before waivers and reimbursements 2.31% 6.71%(5) 1.99% 2.18%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 2.10% 2.10%(5) 1.99% 2.10%(5)
Ratio of net investment income (loss)
to average net assets 0.80% 1.24%(5) 0.99% 1.06%(5)
Portfolio turnover rate(6) 38.62% 19.75%(4) 34.63% 40.24%
</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) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) Not annualized.
(5) Annualized.
(6) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
52 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 57
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD HIGH YIELD FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED: PERIOD ENDED:
9/30/98- 9/30/98- 9/30/98-
12/31/99 12/31/98(1) 12/31/99 12/31/98(1) 12/31/99 12/31/98(1)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.15 $10.00 $10.14 $10.00 $10.14 $10.00
Income from investment operations:
Net investment income (loss) 0.75 0.19 0.68 0.16 0.68 0.16
Net realized and unrealized gain (loss)
on investments (0.40) 0.13 (0.40) 0.14 (0.40) 0.14
------- ------ ------ ------ ------ ------
Total from investment operations 0.35 0.32 0.28 0.30 0.28 0.30
Less distributions:
Dividends from net investment income (0.75) (0.17) (0.68) (0.16) (0.68) (0.16)
Distributions from capital gains 0.00 0.00 0.00 0.00 0.00 0.00
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
------- ------ ------ ------ ------ ------
Total distributions (0.75) (0.17) (0.68) (0.16) (0.68) (0.16)
------- ------ ------ ------ ------ ------
Net asset value, end of period $9.75 $10.15 $9.74 $10.14 $9.74 $10.14
======= ====== ====== ====== ====== ======
TOTAL RETURN(2) 3.47% 3.33%(4) 2.80% 3.09%(4) 2.81% 3.08%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $17,465 $8,507 $7,436 $2,322 $8,573 $2,278
Ratio of expenses to average net assets
before waivers and reimbursements 1.41% 1.58%(5) 2.08% 2.31%(5) 2.09% 2.31%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 1.36% 1.40%(5) 2.08% 2.10%(5) 2.09% 2.10%(5)
Ratio of net investment income (loss) to
average net assets 7.74% 7.06%(5) 7.03% 6.50%(5) 7.01% 6.49%(5)
Portfolio turnover rate(3) 52.96% 10.85% 52.96% 10.85% 52.96% 10.85%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
THE HARTFORD MUTUAL FUNDS, INC. 53
<PAGE> 58
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD BOND INCOME STRATEGY FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99 12/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.76 $10.61 $10.26 $10.00 $10.72 $10.58
Income from investment operations:
Net investment income (loss) 0.54 0.54 0.57 0.26 0.47 0.47
Net realized and unrealized gain (loss)
on investments (0.83) 0.23 0.50 0.31 (0.82) 0.22
-------- ------- ------- ------ -------- -------
Total from investment operations (0.29) 0.77 1.07 0.57 (0.35) 0.69
Less distributions:
Dividends from net investment income (0.52) (0.54) (0.56) (0.25) (0.45) (0.47)
Distributions from capital gains (0.02) (0.08) (0.16) (0.06) (0.02) (0.08)
Return of capital 0.00 0.00 0.00 0.00 0.00 0.00
-------- ------- ------- ------ -------- -------
Total distributions (0.54) (0.62) (0.72) (0.31) (0.47) (0.55)
-------- ------- ------- ------ -------- -------
Net asset value, end of period $9.93 $10.76 $10.61 $10.26 $9.90 $10.72
======== ======= ======= ====== ======== =======
TOTAL RETURN(3) (2.71%) 7.48% 10.80% 5.73%(4) (3.30%) 6.70%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $57,320 $47,143 $28,589 $10,925 $21,442 $16,772
Ratio of expenses to average net assets
before waivers and reimbursements 1.29% 1.32% 1.49% 2.77%(5) 1.94% 2.01%
Ratio of expenses to average net assets
after waivers and reimbursements 1.24% 1.25% 1.25% 1.25%(5) 1.94% 1.95%
Ratio of net investment income (loss)
to average net assets 5.32% 5.04% 5.59% 5.72%(5) 4.62% 4.32%
Portfolio turnover rate(6) 113.37% 135.01% 220.45% 75.52%(4) 113.37% 135.01%
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED: PERIOD ENDED:
7/1/96- 7/1/98-
12/31/97 12/31/96(1) 12/31/99 12/31/98(2)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.25 $10.00 $10.76 $10.70
Income from investment operations:
Net investment income (loss) 0.53 0.20 0.47 0.19
Net realized and unrealized gain (loss)
on investments 0.46 0.34 (0.82) 0.15
------- ------ ------- -------
Total from investment operations 0.99 0.54 (0.35) 0.34
Less distributions:
Dividends from net investment income (0.50) (0.23) (0.46) (0.21)
Distributions from capital gains (0.16) (0.06) (0.02) (0.07)
Return of capital 0.00 0.00 0.00 0.00
------- ------ ------- -------
Total distributions (0.66) (0.29) (0.48) (0.28)
------- ------ ------- -------
Net asset value, end of period $10.58 $10.25 $9.93 $10.76
======= ====== ======= =======
TOTAL RETURN(3) 9.96% 5.38%(4) (3.36%) 3.19%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $5,745 $124 $18,136 $5,420
Ratio of expenses to average net assets
before waivers and reimbursements 2.19% 22.36%(5) 1.97% 2.13%(5)
Ratio of expenses to average net assets
after waivers and reimbursements 1.95% 1.95%(5) 1.95% 1.95%(5)
Ratio of net investment income (loss)
to average net assets 4.85% 5.22%(5) 4.62% 4.13%(5)
Portfolio turnover rate(6) 220.45% 75.52%(4) 113.37% 135.01%
</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) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(3) Does not include sales charges.
(4) Not annualized.
(5) Annualized.
(6) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
54 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 59
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MONEY MARKET FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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 and financial highlights, are included in the annual report which is
available upon request.
<TABLE>
<CAPTION>
CLASS A - CLASS B -
PERIOD ENDED: PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1) 12/31/99
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) 0.04 0.50 0.05 0.02 0.04
Net realized and unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- -------
Total from investment operations 0.04 0.50 0.05 0.02 0.04
Less distributions:
Dividends from net investment income (0.04) (0.50) (0.05) (0.02) (0.04)
Distributions from capital gains 0.00 0.00 0.00 0.00 0.00
Return of capital 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- -------
Total distributions (0.04) (0.50) (0.05) (0.02) (0.04)
------- ------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
TOTAL RETURN(4) 4.32% 4.69% 4.73% 2.01%(5) 3.59%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $44,663 $29,424 $22,578 $10,754 $25,762
Ratio of expenses to average net assets
before waivers and reimbursements 1.15% 1.25% 1.28% 2.75%(6) 1.81%
Ratio of expenses to average net assets
after waivers and reimbursements 1.00% 1.00% 1.00% 1.00%(6) 1.70%
Ratio of net investment income (loss)
to average net assets 4.25% 4.57% 4.67% 4.49%(6) 3.55%
Portfolio turnover rate N/A N/A N/A N/A N/A
<CAPTION>
CLASS B - CLASS C -
PERIOD ENDED:
8/22/97- 7/31/98-
12/31/98 12/31/97(2) 12/31/99 12/31/98(3)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) 0.04 0.01 0.04 0.02
Net realized and unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00
------- ------ ------ ------
Total from investment operations 0.04 0.01 0.04 0.02
Less distributions:
Dividends from net investment income (0.04) (0.01) (0.04) (0.02)
Distributions from capital gains 0.00 0.00 0.00 0.00
Return of capital 0.00 0.00 0.00 0.00
------- ------ ------ ------
Total distributions (0.04) (0.01) (0.04) (0.02)
------- ------ ------ ------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
======= ====== ====== ======
TOTAL RETURN(4) 3.97% 1.45%(5) 3.59% 1.58%(5)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $11,936 $4,449 $9,904 $1,203
Ratio of expenses to average net assets
before waivers and reimbursements 1.86% 3.63%(6) 1.84% 2.02%(6)
Ratio of expenses to average net assets
after waivers and reimbursements 1.70% 1.70%(6) 1.70% 1.70%(6)
Ratio of net investment income (loss)
to average net assets 3.83% 3.92%(6) 3.56% 3.57%(6)
Portfolio turnover rate N/A N/A N/A N/A
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Class B shares were first offered on August 22, 1997.
(3) Class C shares were first offered on July 31, 1998. Per share amounts for
Class C shares for 1998 were restated to reflect a reverse stock split which
was effective February 11, 1999.
(4) Does not include sales charges.
(5) Not annualized.
(6) Annualized.
THE HARTFORD MUTUAL FUNDS, INC. 55
<PAGE> 60
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT
TO SHAREHOLDERS
Additional information on each fund is contained in the financial statements and
portfolio holdings in the fund's annual and semi-annual report. In the fund's
annual report you will also find a discussion of the market conditions and
investment strategies that significantly affected performance during the last
fiscal year, and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION
(SAI)
The SAI contains more detailed information on all aspects of the funds.
A current SAI and annual report have been filed with the Securities and Exchange
Commission and are incorporated by reference into (which means they are legally
a part of) this prospectus.
To request a free copy of the current annual/semiannual report and/or the SAI or
for shareholder inquiries, please contact the funds at:
BY MAIL:
The Hartford Mutual Funds, Inc.
P.O. Box 219054
Kansas City, MO 64121-9054
BY PHONE:
1-888-843-7824
ON THE INTERNET:
invest.hartfordlife.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-202-942-8090.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET OR BY E-MAIL:
Internet: www.sec.gov
E-Mail: [email protected]
Requests which are made by e-mail require the payment of a duplicating fee to
the SEC to obtain a document.
SEC FILE NUMBER: 811-07589
<PAGE> 61
THE HARTFORD MUTUAL FUNDS, INC.
CLASS Y SHARES
PROSPECTUS
MAY 1, 2000
<TABLE>
<S> <C>
AS WITH ALL MUTUAL FUNDS, THE GLOBAL HEALTH FUND
SECURITIES AND EXCHANGE COMMISSION GLOBAL TECHNOLOGY FUND
HAS NOT APPROVED OR DISAPPROVED SMALL COMPANY FUND
THESE SECURITIES OR PASSED UPON CAPITAL APPRECIATION FUND
THE ADEQUACY OF THIS PROSPECTUS. MIDCAP FUND
ANY REPRESENTATION TO THE CONTRARY INTERNATIONAL OPPORTUNITIES FUND
IS A CRIMINAL OFFENSE. 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 HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 219054
KANSAS CITY, MO 64121-9054
<PAGE> 62
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 63
INTRODUCTION
- --------------------------------------------------------------------------------
The Hartford Mutual Funds, Inc. is a family of fourteen mutual funds, each with
its own investment strategy and risk/reward profile. Each fund, except the
Global Health Fund and Global Technology Fund, is a diversified fund. The Global
Health Fund and Global Technology Fund are non-diversified funds, which are
sometimes known as "sector funds." Information on each fund, including risk
factors for investing in diversified versus non-diversified funds, can be found
on the pages following this introduction.
The investment manager to each fund is Hartford Investment Financial Services
Company ("HIFSCO"). The day-to-day portfolio management of the funds is provided
by two investment sub-advisers -- Wellington Management Company, LLP
("Wellington Management") and Hartford Investment Management Company ("HIMCO").
Information regarding HIFSCO, Wellington Management and HIMCO is included under
"Management of the Funds" in this prospectus.
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosures carefully before investing.
CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
A summary of each fund's goals, The Hartford Global Health Fund 2
strategies, risks, performance and The Hartford Global Technology Fund 4
expenses. The Hartford Small Company Fund 6
The Hartford Capital Appreciation Fund 8
The Hartford MidCap Fund 10
The Hartford International Opportunities Fund 12
The Hartford Global Leaders Fund 14
The Hartford Stock Fund 16
The Hartford Growth and Income Fund 18
The Hartford Dividend and Growth Fund 20
The Hartford Advisers Fund 22
The Hartford High Yield Fund 24
The Hartford Bond Income Strategy Fund 26
The Hartford Money Market Fund 28
Prior performance of similar funds 30
Description of other investment Other investment strategies and investment matters 31
strategies and investment risks.
Investment manager and management Management of the funds 32
fee information.
Information on your About your account 34
account. Class Y investor requirements 34
Opening an account 34
Buying shares 35
Selling shares 36
Selling shares in writing 36
Transaction policies 37
Further information on the funds. Additional share classes 39
Financial highlights 40
For more information back cover
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 1
<PAGE> 64
THE HARTFORD GLOBAL HEALTH FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Global Health Fund seeks long-term capital
appreciation by investing at least 80% of its total assets in the equity
securities of health care companies worldwide.
INVESTMENT STRATEGY. The focus of the fund's investment process is stock
selection through fundamental analysis. The fund's approach to investing in the
health care sector is based on in-depth understanding of medical science,
regulatory developments, reimbursement policy trends, and individual company
business franchises. The portfolio will exploit favorable macro trends for the
health care sector including demographics.
The portfolio will also seek to invest in health care companies that benefit
from the trend toward global consolidation, the biotechnology revolution and
advances in software, integrated circuits and biocompatible materials.
Fundamental research is focused on direct contact with company management,
suppliers and competitors.
Investments in the portfolio will be allocated across the major subsectors of
the health care sector, which include pharmaceuticals, medical products, managed
health care and health information services. Wellington Management may favor
certain subsectors at times based upon the relative attractiveness of stocks
within these subsectors, near term macroeconomic factors and the availability of
such stocks at attractive prices. Some representation is typically maintained in
each major subsector of the health care sector.
Stocks considered for purchase in the portfolio typically share the following
attributes:
- The company's business franchise is temporarily mispriced
- The company has under-appreciated new product pipelines
- The company has opportunities due to changes in reimbursement policy (for
example, the privatization of health care services abroad)
- The company is a target of opportunity due to industry consolidation
Stocks will be considered for sale from the portfolio when:
- Target prices are achieved
- Wellington Management's fundamental expectations are not met
- A company's prospects become less appealing
Wellington Management seeks growth companies with attractive entry valuations,
defined as those stocks where the price is not already fully exploited by other
investors. Accordingly, Wellington Management seeks to be early, not late in
recognizing opportunity.
The portfolio will be relatively concentrated both with regard to position size
and the health care sector. The fund may invest in companies of any size
capitalization. The portfolio will be close to fully invested; cash balances
normally will not exceed 10% of total assets. Market timing will not be a
significant source of performance. Annual portfolio turnover is expected to be
100% or less.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small, medium and large companies, its performance may be more
volatile than that of a fund that invests primarily in larger companies. You
could lose money as a result of your investment.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's investments are focused in the health care sector. This means that
the fund may have greater market fluctuation and price volatility than a fund
which invests in a more broadly diversified portfolio of securities across
sectors. Financial, business and economic factors may have a greater impact on a
fund of this kind than on a broadly diversified fund.
Health care products and services are generally subject to government
regulation, and changes in laws or regulations could adversely impact the market
value of securities and the fund's overall performance.
Government regulation could have a significant, adverse impact on the price and
availability of a company's products and services.
Lawsuits and regulatory proceedings which may be brought against the issuers of
securities could also adversely impact the market value of securities and the
fund's overall performance.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund expects to trade securities very actively, which will likely increase
its transaction costs (thus lowering performance) and increase your taxable
distributions.
- --------------------------------------------------------------------------------
2 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 65
THE HARTFORD GLOBAL HEALTH FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
The fund is managed by
Wellington Management using a
team of its global industry
analysts that specialize in the
health care sector.
PAST PERFORMANCE. Because the fund has been in operation
for less than one year no performance history has been
provided.
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) None
Maximum load imposed on purchases as a percentage of
offering price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 1.00%
Distribution and service (12b-1) fees None
Other expenses 0.24%
Total operating expenses 1.24%
Fee waiver (0.04%)
Net expenses(1) 1.20%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.20% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 123
Year 3 $ 392
Year 5 $ 681
Year 10 $1,503
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 3
<PAGE> 66
THE HARTFORD GLOBAL TECHNOLOGY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Global Technology Fund seeks long-term capital
appreciation by investing at least 80% of its total assets in the equity
securities of technology companies worldwide.
INVESTMENT STRATEGY. The focus of the fund's investment process is stock
selection through fundamental analysis. The fund's approach to investing in the
technology sector is based on analyzing the competitive outlook for various
subsectors of the technology sector, identifying those subsectors likely to
benefit from the current and expected future environment, and identifying
individual opportunities.
Wellington Management's evaluation of technology companies rests on its solid
knowledge of the overall competitive environment, including supply and demand
characteristics, secular trends, existing product evaluations, and new product
developments within the technology sector. Fundamental research is focused on
direct contact with company management, suppliers and competitors.
Asset allocation within the portfolio reflects Wellington Management's opinion
of the relative attractiveness of stocks within the subsectors of the technology
sector, near term macroeconomic events that may detract or enhance the
subsector's attractiveness, and the number of underdeveloped opportunities in
each subsector. Opportunities dictate the magnitude and frequency of changes in
asset allocation across the major subsectors of the technology sector, including
computer software, computer hardware, semiconductors and equipment,
communications equipment and internet and news media. Some representation is
typically maintained in each major subsector of the technology sector.
Stocks considered for purchase in the portfolio typically share the following
attributes:
- A positive change in operating results is anticipated
- Unrecognized or undervalued capabilities are present
- The quality of management indicates that these factors will be converted
to shareholder value
Stocks will be considered for sale from the portfolio when:
- Target prices are achieved
- Earnings and/or return expectations are reduced due to fundamental
changes in the company's operating outlook
- More attractive value in a comparable company is available.
The portfolio will be relatively concentrated both with regard to position size
and the technology sector. The fund may invest in companies of any size
capitalization. The portfolio will be close to fully invested; cash balances
normally will not exceed 10% of total assets. Market timing will not be a
significant source of performance. Annual portfolio turnover is expected to be
high and will exceed 100%.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small, medium and large companies, its performance may be more
volatile than that of a fund that invests primarily in larger companies. You
could lose money as a result of your investment.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's investments are focused in the technology sector. This means that the
fund may have greater market fluctuation and price volatility than a fund which
invests in a more broadly diversified portfolio of securities across sectors.
Financial, business and economic factors may have a greater impact on this kind
of fund than on a broadly diversified fund.
Competition in the sector may cause technology companies to cut prices
significantly, which can adversely affect the profitability of companies that
make up the fund's portfolio. In addition, because of rapid technological
developments, products or services which are offered by technology companies may
become obsolete or may be produced for a relatively short time, which could
adversely affect the price of the issuers' securities. This means that the
fund's returns may be more volatile than the returns of a fund which is not
subject to these risk factors.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund expects to trade securities very actively, which will likely increase
its transaction costs (thus lowering performance) and increase your taxable
distributions.
- --------------------------------------------------------------------------------
4 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 67
THE HARTFORD GLOBAL TECHNOLOGY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
The fund is managed by
Wellington Management using a
team of its global industry
analysts that specialize in the
technology sector.
PAST PERFORMANCE. Because the fund has been in operation
for less than one year no performance history has been
provided.
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) None
Maximum load imposed on purchases as a percentage of
offering price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 1.00%
Distribution and service (12b-1) fees None
Other expenses 0.24%
Total operating expenses 1.24%
Fee waiver (0.04%)
Net expenses(1) 1.20%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.20% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 123
Year 3 $ 392
Year 5 $ 681
Year 10 $1,503
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 5
<PAGE> 68
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Small Company Fund seeks growth of capital by
investing primarily in stocks selected on the basis of potential for capital
appreciation.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its total assets
in common stocks of companies with market capitalizations within the range
represented by the Russell 2000 Index. As of December 31, 1999 this range was
between approximately $10 million and $13 billion, and the average market
capitalization was $664 million. The fund may invest up to 20% of its total
assets in securities of non-U.S. issuers.
Through fundamental analysis Wellington Management identifies companies that it
believes have substantial potential for near-term capital appreciation.
Wellington Management selects securities of companies that, in its opinion:
- have potential for above-average earnings growth,
- are undervalued in relation to their investment potential,
- have positive business and/or fundamental financial characteristics that
are overlooked or misunderstood by investors, or
- are relatively obscure and undiscovered by the overall investment
community.
Fundamental analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small companies, its performance may be more volatile than that
of a fund that invests primarily in larger companies. You could lose money as a
result of your investment.
Stocks of smaller companies may be more risky than stocks of larger companies.
Many of these companies are young and have limited operating or business
history. Because these businesses frequently rely on narrow product lines and
niche markets, they can suffer severely from isolated business setbacks.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. Small
company stocks as a group could fall out of favor with the market, causing the
fund to underperform funds that focus on other types of stocks. Similarly, if
the managers' stock selection strategy doesn't perform as expected, the fund
could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 19.69%
98 11.05%
99 66.37%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
35.99% (4th quarter, 1999) and the lowest quarterly return was -20.72% (3rd
quarter, 1998).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 66.37% 30.94%
Russell 2000 Index 21.26% 15.91%
</TABLE>
INDEX: The Russell 2000 Index is a broad based unmanaged index comprised of
2,000 of the smallest U.S. domiciled company common stocks (on the basis of
capitalization) that are traded in the United States on the New York Stock
Exchange, American Stock Exchange and NASDAQ.
6 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 69
THE HARTFORD SMALL COMPANY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Steven C. Angeli
- Vice President of Wellington
Management
- Manager of the fund since
January 1, 2000
- Joined Wellington Management
in 1994
- Investment professional
since 1990
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses 0.14%
Total operating expenses(1) 0.99%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.00% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 101
Year 3 $ 317
Year 5 $ 549
Year 10 $1,217
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 7
<PAGE> 70
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Capital Appreciation Fund seeks growth of capital
by investing primarily in stocks selected on the basis of potential for capital
appreciation.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its total assets
in common stocks of small, medium and large companies. The fund may invest up to
20% of its total assets in securities of non-U.S. issuers.
Through fundamental analysis, Wellington Management identifies companies that it
believes have substantial near-term capital appreciation potential regardless of
company size or industry. This strategy is sometimes referred to as a "stock
picking" approach. Small and medium sized companies are selected primarily on
the basis of dynamic earnings growth potential. Larger companies are selected
primarily based on the expectation of a significant event that Wellington
Management believes will trigger an increase in the stock price.
In analyzing a prospective investment Wellington Management looks at a number of
factors, such as business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends and other related measures
of value.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on small, medium and large companies, its performance may be more
volatile than that of a fund that invests primarily in larger companies. You
could lose money as a result of your investment.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
managers' stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 56.00%
98 3.68%
99 67.49%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
36.93% (4th quarter, 1999) and the lowest quarterly return was -21.79% (3rd
quarter, 1998).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 67.49% 46.64%
S&P 500 Index 21.04% 29.71%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
8 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 71
THE HARTFORD CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
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
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.75%
Distribution and service (12b-1) fees None
Other expenses 0.12%
Total operating expenses(1) 0.87%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.00% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 89
Year 3 $ 279
Year 5 $ 484
Year 10 $1,076
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 9
<PAGE> 72
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford MidCap Fund seeks long-term growth of capital by
investing primarily in stocks selected on the basis of potential for capital
appreciation.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its total assets
in common stocks of companies with market capitalizations within the range
represented by the Standard & Poor's MidCap 400 Index. As of December 31, 1999
this range was between approximately $165 million and $37 billion and the
average market capitalization was $2.3 billion. The fund may invest up to 20% of
its total assets in securities of non-U.S. issuers.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, and demographic trends. Through top down analysis, Wellington
Management anticipates trends and changes in markets and the economy
overall and identifies industries and sectors that are expected to
outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, and other related measures of value.
The fund favors high-quality growth companies. The key characteristics of
high-quality growth companies include a leadership position within an industry,
a strong balance sheet, a high return on equity, and a strong management team.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. Because the fund
concentrates on mid-sized companies, its performance may be more volatile than
that of a fund that invests primarily in larger companies. You could lose money
as a result of your investment.
Stocks of mid-sized companies may be more risky than stocks of larger companies.
These companies may be young and have more limited operating or business
history. Because these businesses frequently rely on narrower product lines and
niche markets, they can suffer from isolated business setbacks.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly.
Mid-sized company stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on other types of stocks.
Similarly, if the managers' stock selection strategy doesn't perform as
expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
98 23.62%
99 50.87%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
29.99% (4th quarter, 1999) and the lowest quarterly return was -15.91% (3rd
quarter, 1998).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 12/30/97)
<S> <C> <C>
Class Y 50.87% 36.44%
S&P MidCap 400 Index 14.73% 16.88%
</TABLE>
INDEX: The S&P MidCap 400 Index is an unmanaged index of common stocks of
companies chosen by Standard & Poor's designed to represent price movements in
the midcap U.S. equity market.
10 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 73
THE HARTFORD MIDCAP FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Phillip H. Perelmuter
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1997)
- Joined Wellington Management
in 1995
- Investment professional
since 1983
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses 0.12%
Total operating expenses(1) 0.97%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.00% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 99
Year 3 $ 310
Year 5 $ 539
Year 10 $1,194
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 11
<PAGE> 74
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford International Opportunities Fund seeks growth of
capital by investing primarily in stocks issued by non-U.S. companies.
INVESTMENT STRATEGY. The fund normally invests at least 65% of its assets in
stocks issued by non-U.S. companies which trade in foreign markets that are
generally considered to be well established. Under normal market conditions the
fund diversifies its investments among at least three countries other than the
United States. The securities in which the fund invests are denominated in both
U.S. dollars and non-U.S. currencies and generally are traded in non-U.S.
markets.
Wellington Management uses a three-pronged investment strategy:
- Wellington Management determines the relative attractiveness of the many
countries in which the fund may invest based upon its analysis of the
economic and political environment of each country.
- Wellington Management also evaluates industries on a global basis to
determine which industries offer the most potential for capital
appreciation given current and projected global and local economic and
market conditions.
- Wellington Management conducts fundamental research on individual
companies to identify securities for purchase or sale. Fundamental
analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of
value.
In analyzing companies for investment, Wellington Management considers companies
for inclusion in the fund's portfolio that are typically larger, high- quality
companies that operate in established markets. Characteristics of high-quality
growth companies include a strong balance sheet, attractive industry trends,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 1.31%
98 13.11%
99 39.63%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
22.37% (4th quarter, 1999) and the lowest quarterly return was -16.11% (3rd
quarter, 1998).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 39.63% 17.33%
EAFE GDP Index 31.02% 19.65%(1)
</TABLE>
INDEX: The Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP") Index is
an unmanaged index of stocks of companies representing stock markets in Europe,
Australia, New Zealand and the Far East.
(1) Return is from 7/31/96 -- 12/31/99
12 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 75
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Trond Skramstad
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1993
- Investment professional
since 1990
Andrew S. Offit
- Vice President of Wellington
Management
- Associate Manager of the
fund since 1997
- Joined Wellington Management
in 1997
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses 0.26%
Total operating expenses(1) 1.11%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.20% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 114
Year 3 $ 355
Year 5 $ 615
Year 10 $1,357
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 13
<PAGE> 76
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Global Leaders Fund seeks growth of capital by
investing primarily in stocks issued by companies worldwide.
INVESTMENT STRATEGY. The fund invests primarily in a diversified portfolio of
common stocks covering a broad range of countries, industries and companies.
Securities in which the fund invests are denominated in both U.S. dollars and
non-U.S. currencies and may trade in both U.S. and non-U.S. markets.
Under normal market and economic conditions, the fund invests at least 65% of
its total assets in common stocks of high-quality growth companies worldwide.
These companies must, in the opinion of Wellington Management, be leaders in
their respective industries as indicated by an established market presence and
strong global, regional or country competitive positions. Under normal market
and economic conditions, the fund will diversify its investments in securities
of issuers among at least five countries, which may include the United States.
There are no limits on the amount of the fund's assets that may be invested in
each country.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the global macro-economic and investment
environments. This includes an evaluation of U.S. and non-U.S. economic
and political conditions, fiscal and monetary policies, demographic
trends and investor sentiment. Through top down analysis, Wellington
Management anticipates trends and changes in the markets and economy to
identify companies which offer significant potential for capital
appreciation given current and projected global and local economic and
market conditions.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
involves the assessment of a company through such factors as its business
environment, management, balance sheet, income statements, anticipated
earnings, revenues and other related measures of value.
The fund emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a strong balance sheet, a high return on
equity, a strong management team, and attractive relative value within the
context of the global marketplace or a security's primary trading market.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's operation, while the table shows how the fund's
performance for the same time period and since inception compares to that of a
broad-based market index. The total return figures in both the bar chart and
table do not include the effect of sales charges as no sales charge is
applicable to the Class Y shares. All figures assume that all dividends and
distributions were reinvested. Keep in mind that past performance does not
indicate future results.
CLASS Y TOTAL RETURN
FOR CALENDAR YEAR 1999
[Bar Chart]
<TABLE>
<S> <C>
99 48.39
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
32.04% (4th quarter, 1999) and the lowest quarterly return was -0.42% (3rd
quarter, 1999).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 9/30/98)
<S> <C> <C>
Class Y 48.39% 69.60%
MSCI Index 24.95% 39.22%
</TABLE>
INDEX: The Morgan Stanley Capital International World Index is a broad based
unmanaged market capitalization weighted total return index which measures the
performance of 23 developed-country global stock markets, including the United
States, Canada, Europe, Australia, New Zealand and the Far East.
14 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 77
THE HARTFORD GLOBAL LEADERS FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1998)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
Andrew S. Offit
- Vice President of Wellington
Management
- Co-manager of the fund since
inception (1998)
- Joined Wellington Management
in 1997
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.85%
Distribution and service (12b-1) fees None
Other expenses 0.25%
Total operating expenses(1) 1.10%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.20% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 113
Year 3 $ 352
Year 5 $ 609
Year 10 $1,346
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 15
<PAGE> 78
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Stock Fund seeks long-term growth of capital,
with income as a secondary consideration, by investing primarily in stocks.
INVESTMENT STRATEGY. The fund normally invests at least 65% of the fund's total
assets in the common stocks of high-quality growth companies. Many of the
companies in which the fund invests have a history of paying dividends and are
expected to continue paying dividends in the future. The fund may invest up to
20% of its total assets in securities of non-U.S. issuers. The fund invests in a
diversified portfolio of primarily equity securities using a two-tiered
investment strategy:
- Using what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the general economic and investment environment. This
includes an evaluation of economic conditions, U.S. fiscal and monetary
policy, demographic trends, and investor sentiment. Through top down
analysis, Wellington Management anticipates trends and changes in markets
in the economy overall and identifies industries and sectors that are
expected to outperform.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental analysis
of a company involves the assessment of such factors as its business
environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value.
The key characteristics of high-quality growth companies favored by the fund
include a leadership position within an industry, a strong balance sheet, a high
return on equity, sustainable or increasing dividends, a strong management team
and a globally competitive position.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on small- or
medium-capitalization stocks. Similarly, if the managers' stock selection
strategy doesn't perform as expected, the fund could underperform its peers or
lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index . The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 32.33
98 31.80
99 22.91
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
14.56% (4th quarter, 1999) and the lowest quarterly return was -10.12% (3rd
quarter, 1998).
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 22.91% 30.21%
S&P 500 Index 21.04% 29.71%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
16 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 79
THE HARTFORD STOCK FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
Philip H. Perelmuter
- Senior Vice President of
Wellington Management
- Associate Manager of the
fund since 1996
- Joined Wellington Management
in 1995
- Investment professional
since 1983
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.74%
Distribution and service (12b-1) fees None
Other expenses 0.17%
Total operating expenses(1) 0.91%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.00% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 93
Year 3 $ 291
Year 5 $ 506
Year 10 $1,123
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 17
<PAGE> 80
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Growth and Income Fund seeks growth of capital
and current income by investing primarily in stocks with earnings growth
potential and steady or rising dividends.
INVESTMENT STRATEGY. The fund invests primarily in a diversified portfolio of
common stocks that typically have steady or rising dividends and whose prospects
for capital appreciation are considered favorable by Wellington Management. The
fund may invest up to 20% of its total assets in securities of non-U.S. issuers.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues, dividends and other
related measures of value.
Wellington Management then complements its fundamental research with an
internally-developed analytical approach. This analytical approach consists of
both valuation and timeliness measures. Valuation factors focus on future
dividend growth and cash flow to determine the relative attractiveness of
different stocks in different industries. Timeliness focuses on stocks with
favorable earnings and stock price momentum to assess the appropriate time for
purchase.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's operation, while the table shows how the fund's
performance over the same time period and since inception compares to that of a
broad-based market index. The bar chart figures do not include the effect of
sales charges, while the average annual total return figures do. If sales
charges were reflected in the bar chart, returns would have been lower. All
figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS Y TOTAL RETURN
FOR CALENDAR YEAR 1999
[Bar Chart]
<TABLE>
<S> <C>
99 21.45
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
15.51% (4th quarter, 1999) and the lowest quarterly return was -6.36% (3rd
quarter, 1999).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
(INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 4/30/98)
<S> <C> <C>
Class Y 21.45% 22.24%
S&P 500 Index 21.04% 19.78%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
18 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 81
THE HARTFORD GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
James A. Rullo
- Senior Vice President of
Wellington Management
- Manager of the fund since
inception (1998)
- Joined Wellington Management
in 1994
- Investment professional
since 1987
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.80%
Distribution and service (12b-1) fees None
Other expenses 0.13%
Total operating expenses(1) 0.93%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 1.00% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 95
Year 3 $ 298
Year 5 $ 517
Year 10 $1,147
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 19
<PAGE> 82
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Dividend and Growth Fund seeks a high level of
current income consistent with growth of capital by investing primarily in
stocks.
INVESTMENT STRATEGY. The fund invests primarily in a diversified portfolio of
common stocks that typically have above average income yields and whose
prospects for capital appreciation are considered favorable by Wellington
Management. Under normal market and economic conditions at least 65% of the
fund's total assets are invested in dividend-paying equity securities. The fund
may invest up to 20% of its total assets in securities of non-U.S. issuers. The
fund tends to focus on securities of larger, well-established companies.
Wellington Management uses fundamental analysis to evaluate a security for
purchase or sale by the fund. Fundamental analysis of a company involves the
assessment of such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues and dividends.
As a key component of its fundamental analysis, Wellington Management evaluates
a company's ability to sustain and potentially increase its dividend payments.
The fund's portfolio is broadly diversified by industry and company.
- --------------------------------------------------------------------------------
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to overall stock market movements and trends. You could lose money
as a result of your investment.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 31.59%
98 14.86%
99 5.10%
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
15.92% (2nd quarter, 1997) and the lowest quarterly return was -8.04% (3rd
quarter, 1999).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 5.10% 19.27%
S&P 500 Index 21.04% 29.71%
</TABLE>
INDEX: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
20 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 83
THE HARTFORD DIVIDEND AND GROWTH FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Laurie A. Gabriel
- Senior Vice President and
Managing Partner of
Wellington Management
- Manager of the fund since
inception (1996)
- Joined Wellington Management
in 1976
- Investment professional
since 1976
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.75%
Distribution and service (12b-1) fees None
Other expenses 0.12%
Total operating expenses(1) 0.87%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 0.95% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 89
Year 3 $ 279
Year 5 $ 484
Year 10 $1,076
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 21
<PAGE> 84
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Advisers Fund seeks maximum long-term total
return.
INVESTMENT STRATEGY. The fund allocates its assets among three categories:
- stocks,
- debt securities, and
- money market instruments.
The fund favors stocks issued by high-quality growth companies. The key
characteristics of high-quality growth companies include a leadership position
within an industry, a strong balance sheet, a high return on equity, sustainable
or increasing dividends, a strong management team and a globally competitive
position.
The debt securities (other than money market instruments) in which the fund
primarily invests include securities issued or guaranteed by the U.S. Government
and its agencies or instrumentalities and securities rated investment grade
(rated at least BBB by Standard & Poor's Corporation or Baa by Moody's Investors
Service, Inc., or if unrated, securities deemed by Wellington Management to be
of comparable quality). The fund is not restricted to any specific maturity
term.
Asset allocation decisions are based on Wellington Management's judgment of the
projected investment environment for financial assets, relative fundamental
values, the attractiveness of each asset category, and expected future returns
of each asset category. Wellington Management does not attempt to engage in
short-term market timing among asset categories. As a result, shifts in asset
allocation are expected to be gradual and continuous and the fund will normally
have some portion of its assets invested in each asset category. There is no
limit on the amount of fund assets that may be allocated to each asset category
and the allocation is in Wellington Management's discretion.
The fund may invest up to 20% of its total assets in securities of non-U.S.
issuers.
- --------------------------------------------------------------------------------
MAIN RISKS. This fund has stock market risk, interest rate risk, manager
allocation risk, credit risk and prepayment risk. You could lose money as a
result of your investment.
Stock market risk means the stocks held by the fund may decline in value due to
the activities and financial prospects of individual companies or to general
market and economic conditions.
Interest rate risk refers to the possibility that your investment may go down in
value when interest rates rise.
Credit risk refers to the possibility that the issuing company may not be able
to pay interest and principal when due.
Manager allocation risk refers to the possibility that the portfolio managers
could allocate assets in a manner that results in the fund underperforming its
peers.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 23.8
98 21.62
99 12.62
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
12.57% (2nd quarter, 1997) and the lowest quarterly return was -3.94% (3rd
quarter, 1999).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 12.62% 20.43%
S&P 500 Index 21.04% 29.71%
LGCB Index -2.15% 9.03%
</TABLE>
INDICES: The S&P 500 Index is a market capitalization weighted price index
composed of 500 widely held common stocks.
The Lehman Brothers Government/Corporate Bond Index is a broad based unmanaged,
market-value-weighted index of all debt obligations of the U.S. Treasury and
U.S. Government agencies (excluding mortgaged-backed securities) and of all
publicly-issued fixed-rate, nonconvertible, investment grade domestic corporate
debt.
22 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 85
THE HARTFORD ADVISERS FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGERS
Paul D. Kaplan
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1996)
- Joined Wellington Management
in 1982
- Investment professional
since 1974
Rand L. Alexander
- Senior Vice President of
Wellington Management
- Co-manager of the fund since
inception (1996)
- Joined Wellington Management
in 1990
- Investment professional
since 1976
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.68%
Distribution and service (12b-1) fees None
Other expenses 0.11%
Total operating expenses(1) 0.79%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 0.95% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 81
Year 3 $253
Year 5 $440
Year 10 $981
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 23
<PAGE> 86
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford High Yield Fund seeks high current income by
investing in non-investment grade debt securities. Growth of capital is a
secondary objective.
INVESTMENT STRATEGY. The fund normally invests at least 65%, and may invest up
to 100%, of its portfolio in non-investment grade debt securities (securities
rated "Ba" or lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or
lower by Standard and Poor's Corporation ("S&P"), or securities which, if
unrated, are determined by HIMCO to be of comparable quality). Debt securities
rated below investment grade are commonly referred to as "high yield-high risk
securities" or "junk bonds". The fund will invest no more than 10% of total
assets in securities rated below B3 by Moody's or B- by S&P, or, if unrated,
determined to be of comparable quality by HIMCO. The fund may invest in bonds of
any maturity although the fund tends to have an average maturity within the
intermediate-term range, which is typically defined as between 5 to 10 years.
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 and
up to 10% of its total assets in securities denominated in foreign currencies.
To achieve its goal of high current income, the fund uses what is sometimes
referred to as a top-down analysis to determine which industries may benefit
from current and future changes in the economy. The fund then selects individual
securities within selected industries that appear from a yield perspective to be
attractive. The fund assesses such factors as the company's business
environment, balance sheet, income statement, anticipated earnings and
management team.
The fund seeks its secondary goal of capital growth, when consistent with its
primary objective of high current income, by investing in securities that the
portfolio manager expects to appreciate in value as a result of declines in
long-term interest rates or favorable developments affecting the business or
prospects of the issuer which may improve the issuer's financial condition and
credit rating.
- --------------------------------------------------------------------------------
MAIN RISKS. The major factors affecting this fund's performance are interest
rates and credit risk. You could lose money as a result of your investment.
When interest rates rise, bond prices fall; generally the longer a bond's
maturity, the more sensitive it is to this risk.
Credit risk depends largely on the perceived financial health of bond issuers.
In general, lower-rated bonds have higher credit risks. High yield bond prices
can fall on bad news about the economy, an industry or a company. Share price,
yield and total return may fluctuate more than with less aggressive bond funds.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. If certain industries or investments don't perform as the
fund expects, it could underperform its peers or lose money.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
High yield bonds and foreign securities may make the fund more sensitive to
market or economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's performance, while the table shows how the fund's
performance over the same time and since inception compares to that of a
broad-based market index. The total return figures in both the bar chart and
table do not include the effect of sales charges as no sales charge is
applicable to the Class Y shares. All figures assume that all dividends and
distributions were reinvested. Keep in mind that past performance does not
indicate future results.
CLASS Y TOTAL RETURN
FOR CALENDAR YEAR 1999
[Bar Chart]
<TABLE>
<S> <C>
99 3.98
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
2.80% (1st quarter, 1999) and the lowest quarterly return was -1.18% (3rd
quarter, 1999).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 9/30/98)
<S> <C> <C>
Class Y 3.98% 6.05%
Lehman High Yield
Corporate Index 2.39% 3.63%
</TABLE>
INDEX: The Lehman Brothers High Yield Corporate Index is a broad-based
market-value-weighted index that tracks the total return performance of
non-investment grade, fixed-rate, publicly placed, dollar denominated and
nonconvertible debt registered with the SEC.
24 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 87
THE HARTFORD HIGH YIELD FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1998)
- Joined HIMCO in 1993
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.75%
Distribution and service (12b-1) fees None
Other expenses 0.15%
Total operating expenses(1) 0.90%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 0.95% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 92
Year 3 $ 288
Year 5 $ 500
Year 10 $1,112
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 25
<PAGE> 88
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. 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.
INVESTMENT STRATEGY. Debt securities include (1) securities issued or
guaranteed as to principal or interest by the U.S. Government, its agencies or
instrumentalities; (2) non-convertible debt securities issued or guaranteed by
U.S. corporations or other issuers (including foreign governments or
corporations); (3) asset-backed and mortgage-related securities; and (4)
securities issued or guaranteed as to principal or interest by a sovereign
government or one of its agencies or political subdivisions, supranational
entities such as development banks, non-U.S. corporations, banks or bank holding
companies, or other non-U.S. issuers.
The fund normally invests at least 70% of its portfolio in investment grade debt
securities. The fund may invest up to 30% of its total assets in securities
rated in the highest category of below investment grade bonds or securities
which, if unrated, are determined by HIMCO to be of comparable quality.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds".
The fund invests at least 65% of its total assets in debt securities with a
maturity of at least one year. Although the fund does not have a maximum
maturity term restriction, the fund tends to have an average maturity within the
intermediate-term range which is typically defined as between 5 and 10 years.
The fund may invest up to 15% of its total assets in preferred stocks,
convertible securities, and securities accompanied by warrants to purchase
equity securities. The fund will not invest in common stocks directly, but may
retain, for reasonable periods of time, common stocks acquired upon conversion
of debt securities or upon exercise of warrants acquired with debt securities.
The fund may invest up to 30% of its total assets in debt securities of non-U.S.
issuers and up to 10% of its total assets in securities denominated in foreign
currencies.
The fund uses what is sometimes referred to as a top-down analysis to determine
which industries may benefit from current and future changes in the economy. The
fund then selects individual securities that appear comparatively undervalued
within selected industries. The portfolio manager assesses such factors as a
company's business environment, balance sheet, income statement, anticipated
earnings and management team.
- --------------------------------------------------------------------------------
MAIN RISKS. The major risk factors affecting this fund's performance are
interest rates and credit risk. You could lose money as a result of your
investment.
When interest rates rise, bond prices fall; generally the longer the fund's
maturity, the more sensitive it is to this risk.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. In general, lower-rated bonds have higher credit risks. If
certain sectors or investments don't perform as the fund expects, it could
underperform its peers or lose money.
High yield bonds and foreign securities may make the fund more sensitive to
market or economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government or other guarantees on portfolio securities do not apply to
the market value or current yield of the portfolio's securities or to the value
of the fund's shares.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 11.3
98 7.98
99 -2.31
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
4.13% (2nd quarter, 1997) and the lowest quarterly return was -1.44% (2nd
quarter, 1999).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y -2.31% 6.54%
Lehman Government
Corporate Bond Index -2.15% 9.03%
</TABLE>
INDEX: The Lehman Brothers Government/Corporate Bond Index is a broad based
unmanaged, market-value-weighted index of all debt obligations of the U.S.
Treasury and U.S. Government agencies (excluding mortgaged-backed securities)
and of all publicly-issued fixed-rate, nonconvertible, investment grade domestic
corporate debt.
26 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 89
THE HARTFORD BOND INCOME STRATEGY FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1996)
- Joined HIMCO in 1993
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.65%
Distribution and service (12b-1) fees None
Other expenses 0.15%
Total operating expenses(1) 0.80%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 0.80% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 82
Year 3 $256
Year 5 $446
Year 10 $993
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 27
<PAGE> 90
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL. The Hartford Money Market Fund seeks maximum current income
consistent with liquidity and preservation of capital.
INVESTMENT STRATEGY. The fund seeks to maintain a stable share price of $1.00.
The fund focuses on specific short-term U.S. dollar denominated money market
instruments which are rated in the first two investment tiers by at least one
nationally recognized statistical rating organization, or if unrated, determined
to be of comparable quality by HIMCO. Money market instruments include (1)
banker's acceptances; (2) obligations of governments (whether U.S. or non-U.S.)
and their agencies and instrumentalities; (3) short-term corporate obligations,
including commercial paper, notes, and bonds; (4) other short-term debt
obligations; (5) obligations of U.S. banks, non-U.S. branches of U.S. banks
(Eurodollars), U.S. branches and agencies of non-U.S. banks (Yankee dollars),
and non-U.S. branches of non-U.S. banks; (6) asset-backed securities; and (7)
repurchase agreements.
The fund purchases securities which it believes offer attractive returns
relative to the risks undertaken. In addition, the portfolio manager adjusts the
average maturity of the portfolio in anticipation of interest rate changes.
- --------------------------------------------------------------------------------
MAIN RISKS. The primary risks of this fund are interest rate risk, credit risk
and manager risk.
A rise in interest rates could cause a fall in the values of the fund's
securities.
Credit risk refers to the risk that a security's credit rating could be
downgraded affecting the value and, potentially the likelihood of repayment, of
the fund's securities.
Manager risk refers to the risk that if the manager does not effectively
implement the fund's investment goal and style, the fund could underperform its
peers.
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1.00 per share, there is a risk that
the fund's share price could fall below $1.00, which would make your shares
worth less than what you paid for them.
- --------------------------------------------------------------------------------
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows how the fund's performance over time
compares to that of a broad-based market index. The bar chart year-by-year and
average annual figures do not include the effect of sales charges as no sales
charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y TOTAL RETURNS
BY CALENDAR YEAR
[Bar Chart]
<TABLE>
<S> <C>
97 5.23
98 5.16
99 4.80
</TABLE>
During the period shown in the bar chart, the highest quarterly return was
1.32% (4th quarter, 1996) and the lowest quarterly return was 1.10% (2nd
quarter, 1999).
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
LIFE OF FUND
1 YEAR (SINCE 7/22/96)
<S> <C> <C>
Class Y 4.80% 5.10%
60-Day Treasury Bill
Index 4.80% 5.04%
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term treasury
bills.
Current 7-day yield as of December 31, 1999: 5.22%
Effective 7-day yield (which indicates the effect of daily compounding) as of
December 31, 1999: 5.36%
Please call 1-888-843-7824 for the most recent current and effective yield
information.
28 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 91
THE HARTFORD MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
William H. Davison, Jr.
- Senior Vice President of
HIMCO
- Manager of the fund since
inception (1996)
- Joined HIMCO in 1990
- Investment professional
since 1981
YOUR EXPENSES. This table describes the fees and expenses
that you may pay if you buy and hold shares of the fund.
<TABLE>
<CAPTION>
CLASS Y
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) as a percentage of offering
price None
Maximum deferred sales charge (load) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees 0.50%
Distribution and service (12b-1) fees None
Other expenses 0.14%
Total operating expenses 0.64%
Fee waiver (0.09%)
Net expenses(1) 0.55%
</TABLE>
(1) HIFSCO has contractually agreed to limit the total
operating expenses of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary
expenses, to not more than 0.55% through at least
April 30, 2001. This policy may be discontinued at any
time thereafter.
EXAMPLE. This example is intended to help you compare the
cost of investing in the fund with the cost of investing
in other mutual funds. The example assumes that you invest
$10,000 in the fund for the time periods indicated. The
example also assumes that your investment has a 5% return
each year, that the fund's operating expenses remain the
same and that you reinvest all dividends and
distributions. Because no sales charges apply to the Class
Y shares you would have the same expenses whether or not
you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1 $ 56
Year 3 $196
Year 5 $349
Year 10 $892
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 29
<PAGE> 92
PRIOR PERFORMANCE OF SIMILAR FUNDS
- --------------------------------------------------------------------------------
Because the mutual funds that are the subject of this prospectus (the "Retail
Funds") began operations in July, 1996, or later, they have limited operating
and performance histories. However, the Capital Appreciation Fund, International
Opportunities Fund, Stock Fund, Dividend and Growth Fund and Advisers Fund are
modeled after existing funds (the "HLS Funds") that are managed by the same
portfolio managers at HIMCO or Wellington Management and have investment
objectives, policies and strategies substantially similar to those of the
corresponding funds. Depending on the fund involved, similarity of investment
characteristics may involve factors such as industry diversification, country
diversification, portfolio beta, portfolio quality, average maturity of
fixed-income assets, equity/non-equity mixes, and individual holdings. The HLS
Funds are used as investment vehicles for the assets of variable annuity and
variable life insurance contracts issued by The Hartford affiliates. The HLS
Funds listed below are the only funds advised by The Hartford's affiliates and
sub-advised by Wellington Management with similar investment objectives,
policies and strategies to their Retail Fund counterparts. 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 dates and asset sizes as of December 31, 1999. 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.
<TABLE>
<CAPTION>
FUND, INCEPTION DATE,
ASSET SIZE CORRESPONDING HLS FUND, INCEPTION DATE, ASSET SIZE
- --------------------- --------------------------------------------------
<S> <C>
Capital Appreciation (July Hartford Capital Appreciation HLS Fund, Inc. (April 2, 1984)
22, 1996) $1,623,012,202 $7,985,996,377
International Opportunities Hartford International Opportunities HLS Fund, Inc. (July 2,
(July 22, 1996) 1990) $1,578,038,808
$125,034,101
Stock (July 22, 1996) Hartford Stock HLS Fund, Inc. (August 31, 1977)
$1,551,776,783 $9,447,823,496
Dividend and Growth (July Hartford Dividend and Growth HLS Fund, Inc. (March 8, 1994)
22, 1996) $430,515,565 $3,223,819,460
Advisers (July 22, 1996) Hartford Advisers HLS Fund, Inc. (March 31, 1983)
$1,640,237,707 $14,220,213,254
</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, 1999. 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 corresponding Retail
Fund are deducted to arrive at the net return. Please remember that past
performance is not indicative of future returns.
<TABLE>
<CAPTION>
10 YEARS OR
HLS FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
-------- ------ ------- ------- ---------------
<S> <C> <C> <C> <C>
Hartford Capital Appreciation HLS Fund, Inc. 36.99% 24.32% 24.58% 19.47%
Hartford International Opportunities HLS Fund, Inc. 39.27% 16.17% 14.89% 10.06%
Hartford Stock HLS Fund, Inc. 19.16% 27.38% 27.81% 17.31%
Hartford Dividend and Growth HLS Fund, Inc. 5.03% 17.05% 21.78% 18.83%
Hartford Advisers HLS Fund,Inc. 10.26% 19.35% 20.39% 13.70%
</TABLE>
30 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 93
OTHER INVESTMENT STRATEGIES AND INVESTMENT MATTERS
- --------------------------------------------------------------------------------
USE OF MONEY MARKET INVESTMENTS
FOR TEMPORARY DEFENSIVE PURPOSES
From time to time, as part of its primary investment strategy, 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.
USE OF OPTIONS, FUTURES AND
OTHER DERIVATIVES
Each fund (other than the Money Market fund) may purchase and sell options,
enter into futures contracts or utilize other derivatives with respect to
stocks, bonds, groups of securities (such as financial indices), foreign
currencies or interest rates. These techniques, which are incidental to each
fund's primary strategy, permit a fund to gain exposure to a particular
security, group of securities, interest rate or index, and thereby have the
potential for a fund to earn returns that are similar to those which would be
earned by direct investments in those securities or instruments.
These techniques are also used to manage risk by hedging a fund's portfolio
investments. Hedging techniques may not always be available to the Funds; and it
may not always be feasible for a Fund to use hedging techniques even when they
are available.
Derivatives have risks, however. If the issuer of the derivative instrument does
not pay the amount due, a Fund could lose money on the instrument. In addition,
the underlying security or investment on which the derivative is based, and the
derivative itself, may not perform the way the manager expected. As a result,
the use of these techniques may result in losses to a fund or increase
volatility in a fund's performance.
ABOUT EACH FUND'S INVESTMENT GOAL
Each fund's investment goal may be changed without approval of the shareholders
of the fund. A fund may not be able to achieve its goal.
TAX CONSEQUENCES OF PORTFOLIO
TRADING PRACTICES
At times each fund may engage in short-term trading, which could produce higher
brokerage expenses for a fund and higher taxable distributions to the fund's
shareholders. The funds are not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
ADDITIONAL INVESTMENT STRATEGIES
AND RISKS
Each fund may invest in various securities and engage in various investment
techniques which are not the principal focus of the fund and therefore are not
described in this prospectus. These securities and techniques, together with
their risks are discussed in the fund's Statement of Additional Information
which may be obtained free of charge by contacting the fund (see back cover for
address and phone number).
THE HARTFORD MUTUAL FUNDS, INC. 31
<PAGE> 94
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
THE INVESTMENT MANAGER
Hartford Investment Financial Services Company ("HIFSCO") is the investment
manager to each fund. HIFSCO is a majority-owned indirect subsidiary of The
Hartford Financial Services Group, Inc. ("The Hartford"), a Connecticut
financial services company with over $165 billion in assets. As of December 31,
1999 HIFSCO had over $6 billion in assets under management. HIFSCO is
responsible for the management of each fund and supervises the activities of the
investment sub-advisers described below. HIFSCO is principally located at 200
Hopmeadow Street, Simsbury, Connecticut 06070.
THE INVESTMENT SUB-ADVISERS
Wellington Management Company, LLP ("Wellington Management") is the investment
sub-adviser to the Global Health Fund, Global Technology Fund, 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, 1999 Wellington Management had investment management authority over
approximately $235 billion in assets. Wellington Management is principally
located at 75 State Street, Boston, Massachusetts 02109.
The Hartford Investment Management Company ("HIMCO") is the investment
sub-adviser to the High Yield Fund, Bond Income Strategy Fund and Money Market
Fund. HIMCO is a professional money management firm that provides services to
investment companies, employee benefit plans and insurance companies. HIMCO is a
wholly-owned subsidiary of The Hartford. As of December 31, 1999 HIMCO and its
wholly-owned subsidiary had investment management authority over approximately
$59 billion in assets. HIMCO is principally located at 55 Farmington Avenue,
Hartford, Connecticut 06105.
MANAGEMENT FEES
Each Fund pays a monthly management fee to HIFSCO based on a stated percentage
of the Fund's average daily net asset value as follows:
MONEY MARKET FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.50%
Next $500,000,000 0.45%
Amount Over $1 Billion 0.40%
</TABLE>
BOND INCOME STRATEGY FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.65%
Next $500,000,000 0.55%
Amount Over $1 Billion 0.50%
</TABLE>
DIVIDEND AND GROWTH FUND, ADVISERS FUND AND HIGH YIELD FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.75%
Next $500,000,000 0.65%
Amount Over $1 Billion 0.60%
</TABLE>
CAPITAL APPRECIATION FUND, STOCK FUND AND GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.80%
Next $500,000,000 0.70%
Amount Over $1 Billion 0.65%
</TABLE>
SMALL COMPANY FUND, MIDCAP FUND, INTERNATIONAL OPPORTUNITIES FUND AND GLOBAL
LEADERS FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 0.85%
Next $500,000,000 0.75%
Amount Over $1 Billion 0.70%
</TABLE>
GLOBAL HEALTH FUND AND GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- --------------- -----------
<S> <C>
First $500,000,000 1.00%
Next $500,000,000 0.95%
Amount Over $1 Billion 0.90%
</TABLE>
32 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 95
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
MANAGEMENT FEES (CONTINUED)
For the year ended December 31, 1999, the investment advisory fees paid to
HIFSCO for each fund with at least one full year of operations, expressed as a
percentage of net assets, were as follows:
<TABLE>
<CAPTION>
FUND NAME ANNUAL RATE
- --------- -----------
<S> <C>
The Hartford Global Health Fund(1) --
The Hartford Global Technology
Fund(1) --
The Hartford Advisers Fund 0.68%
The Hartford Bond Income Strategy
Fund 0.65%
The Hartford Capital Appreciation
Fund 0.75%
The Hartford Dividend and Growth
Fund 0.75%
The Hartford Global Leaders Fund 0.85%
The Hartford Growth and Income Fund 0.80%
The Hartford High Yield Fund 0.75%
The Hartford International
Opportunities Fund 0.85%
The Hartford MidCap Fund 0.85%
The Hartford Money Market Fund 0.50%
The Hartford Small Company Fund 0.85%
The Hartford Stock Fund 0.74%
</TABLE>
(1) Fund commenced operations in 2000.
THE HARTFORD MUTUAL FUNDS, INC. 33
<PAGE> 96
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) employee benefit or retirement 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 or other
large institutional investors; (iii) investment companies; and (iv) employee
benefit or retirement plans of The Hartford, Wellington Management or
broker-dealer wholesalers and their affiliates.
OPENING AN ACCOUNT
Please note that if you are purchasing shares through your employer's tax
qualified retirement plan, you may need to call the administrator of the plan
for details on purchases, redemptions and other account activity.
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investment for each
fund is $1 million although this minimum may be waived at the discretion of
the funds' officers.
3 Complete the appropriate parts of the account application including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional application if you want to
add privileges later. If you have questions, please contact your financial
representative or call the transfer agent at the number shown below.
4 Make your initial investment selection.
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 219054
KANSAS CITY, MO 64121-9054 OR CONTACT YOUR FINANCIAL REPRESENTATIVE FOR INSTRUCTIONS
AND ASSISTANCE.
</TABLE>
34 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 97
BUYING SHARES
<TABLE>
<C> <S> <C>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
BY CHECK
(CHECK ICON) - Make out a check for the investment amount, - Make out a check for the investment amount,
payable to "The Hartford Mutual Funds, Inc." payable to "The Hartford Mutual Funds, Inc."
- Deliver the check and your completed - Fill out the detachable investment slip from
application to your financial representative, or an account statement. If no slip is available,
mail to the address listed below. include a note specifying the fund name, your
share class, your account number and the
name(s) in which the account is registered.
- Deliver the check and your investment slip or
note to your financial representative, or mail
to the address listed below.
BY EXCHANGE
(ARROW ICON) - Call your financial representative, plan - Call your financial representative, plan
administrator or the transfer agent at the administrator or the transfer agent at the
number below to request an exchange. The number below to request an exchange. The
minimum exchange amount is $500 per fund. minimum exchange amount is $500 per fund.
BY WIRE
(WIRE ICON) - Deliver your completed application to your - Instruct your bank to wire the amount of your
financial representative, or mail it to the investment to:
address below. State Street Bank and Trust Company
Account # 9905-205-2
- Obtain your account number by calling your Routing # 011000028
financial representative or the phone number
below. Specify the fund name, your share class, your
account number and the name(s) in which the
- Instruct your bank to wire the amount of your account is registered. Your bank may charge a
investment to: fee to wire funds.
State Street Bank and Trust Company
Account # 9905-205-2
Routing # 011000028
Specify the fund name, your 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
(PHONE ICON) - See "By Wire" and "By Exchange" - Verify that your bank or credit union is a
member of the Automated Clearing House (ACH)
system.
- Complete the "Telephone Exchanges and
Telephone Redemption" and "Bank Account or
Credit Union Information" sections on your
account application.
- Call the transfer agent at the number below to
verify that these features are in place on
your account.
- Tell the transfer agent representative the
fund name, your share class, your account
number, the name(s) in which the account is
registered and the amount of your investment.
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 219054
KANSAS CITY, MO 64121-9054 OR CONTACT YOUR FINANCIAL REPRESENTATIVE
FOR INSTRUCTIONS AND ASSISTANCE.
</TABLE>
THE HARTFORD MUTUAL FUNDS, INC. 35
<PAGE> 98
SELLING SHARES
<TABLE>
<C> <S>
BY LETTER
- Write a letter of instruction or complete a power of
(LETTER ICON) attorney indicating the fund name, your share class, your
account number, the name(s) in which the account is
registered and the dollar value or number of shares you
wish to sell.
- Include all signatures and any additional documents that
may be required (see next page).
- Mail the materials to the address below.
- A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
letter of instruction.
BY PHONE
(PHONE ICON) - 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 at the number below between 8 A.M. and 6 P.M.
Eastern Time on most business days.
BY WIRE OR ELECTRONIC FUNDS TRANSFER (EFT)
- Fill out the "Telephone Exchanges and Telephone
(WIRE ICON) Redemption" and "Bank Account or Credit Union Information"
sections of your new account application.
- Call the transfer agent to verify that the telephone
redemption privilege is in place on an account, or to
request the forms to add it to an existing account.
- Amounts of $1,000 or more will be wired on the next
business day. Your bank may charge a fee for this service.
- Amounts of less than $1,000 may be sent by EFT or by
check. Funds from EFT transactions are generally available
by the second business day. Your bank may charge a fee for
this service.
- Phone requests are limited to amounts up to $50,000 in a
7-day period.
BY EXCHANGE
- Obtain a current prospectus for the fund into which you
(ARROW ICON) are exchanging by calling your financial representative or
the transfer agent at the number below.
- Call your financial representative or the transfer agent
to request an exchange.
</TABLE>
SELLING SHARES IN WRITING
<TABLE>
<C> <S>
In certain circumstances, you will need to make your request to sell shares
in writing. You may need to include additional items with your request, as
shown in the table below. You may also need to include a signature
guarantee, which protects you against fraudulent orders. You will need a
signature guarantee if:
- your address of record has changed within the past 30 days
(LETTER ICON)
- you are selling more than $50,000 worth of shares
- you are requesting payment other than by a check mailed to
the address of record and payable to the registered owner(s)
Please note that a notary public CANNOT provide a signature guarantee.
Please check with a representative of your bank or other financial
institution about obtaining a signature guarantee.
</TABLE>
<TABLE>
<S> <C>
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS, INC. 1-888-843-7824
P.O. BOX 219054
KANSAS CITY, MO 64121-9054 OR CONTACT YOUR FINANCIAL REPRESENTATIVE FOR INSTRUCTIONS
AND ASSISTANCE.
</TABLE>
36 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 99
TRANSACTION POLICIES
- --------------------------------------------------------------------------------
VALUATION OF SHARES
The net asset value per share (NAV) for each fund and class is determined each
business day at the close of regular trading on the New York Stock Exchange
("NYSE") (typically 4 p.m. Eastern Time). Except for the Money Market Fund, the
funds use market prices in valuing portfolio securities, but may use fair-value
estimates, as determined by HIFSCO under the direction of the Board of
Directors, if reliable market prices are unavailable. Fair value pricing may be
used by a fund when current market values are unavailable or when an event
occurs after the close of the exchange on which a fund's portfolio securities
are principally traded that is likely to have changed the value of the
securities. The use of fair value pricing by the fund may cause the net asset
value of its shares to differ significantly from the net asset value that would
be calculated using current market values. The Money Market Fund's assets and
debt securities with remaining maturities of 60 days or less are valued at
amortized cost.
Trading on many foreign securities markets is completed at various times before
or after the close of the NYSE or on days the NYSE is not open for business.
Consequently, the calculation of a fund's NAV may take place at a time that is
different than when prices are determined for certain foreign securities. As a
result, events affecting the values of foreign portfolio securities that occur
after the close of the NYSE will not be reflected in a fund's calculation of
NAV.
BUY AND SELL PRICES
When you buy shares, you pay the NAV. When you sell shares, you receive the NAV.
EXECUTION OF REQUESTS
Each fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV to be calculated after your request is received by the transfer agent or
authorized broker-dealers and third-party administrators.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.
Although the funds do not charge a transaction fee, you may be charged a fee by
brokers for the purchase or sale of the funds' shares. This transaction fee is
separate from any sales charge that the funds may apply.
In unusual circumstances, any fund may temporarily suspend the processing of
sell requests, or may postpone payment of redemption 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. You may be
subject to tax liability as a result of your exchange.
RIGHT TO REJECT PURCHASE ORDERS/
MARKET TIMING
Purchases and exchanges should be made for investment purposes only. The Funds
reserve the right to reject or restrict any specific purchase request or to
modify or terminate your exchange privileges if a fund determines that you are
or have engaged in market timing. A market timer is defined as a shareholder
that exchanges shares more than twice out of the same fund in a 90-day period.
CERTIFICATED SHARES
Shares are electronically recorded and therefore share certificates are not
issued.
SALES IN ADVANCE OF
PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 15 business days after the purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, each fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities. 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
THE HARTFORD MUTUAL FUNDS, INC. 37
<PAGE> 100
each fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net asset value of the applicable fund during any 90 day
period for any one account.
PAYMENT REQUIREMENTS
All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks and made payable to The Hartford Mutual Funds, Inc., or in the case
of a retirement account, to the custodian or trustee. You may not purchase
shares with a third party check.
If your check does not clear, your purchase will be canceled and will be liable
for any losses or fees that the funds or HIFSCO has incurred.
Certain broker-dealers and financial institutions may enter confirmed purchase
orders with the funds on behalf of customers, by phone or other electronic
means, with payment to follow within the customary settlement period (generally
within three business days). If payment is not received by that time, the order
will be canceled and the broker-dealer or financial institution will be held
liable for the resulting fees or losses.
DIVIDENDS AND ACCOUNT POLICIES
ACCOUNT STATEMENTS In general, you will receive account statements as follows:
- - after every transaction (except a dividend or distribution 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 AND DISTRIBUTIONS 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 Global Health Fund, Global
Technology Fund, 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 AND DISTRIBUTIONS Dividends and distributions you
receive from a fund, whether reinvested or taken as cash, are generally
considered taxable. Distributions from a fund's long-term capital gains are
taxable as capital gains; distributions from short-term capital gains and income
are generally taxable as ordinary income. Some distributions paid in January may
be taxable as if they had been paid the previous December. Tax rates may vary
depending on how long a fund investment is held. See your application for
distribution options.
The Form 1099 that is mailed to you every January details your dividends and
distributions and their federal tax category, although you should verify your
tax liability with your tax professional.
TAXABILITY OF TRANSACTIONS Unless your shares are held in a qualified
retirement account, 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") 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.
38 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 101
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 the
Transfer Agent at 1-888-843-7824 for additional information on the purchase of
Class A, Class B or Class C shares.
THE HARTFORD MUTUAL FUNDS, INC. 39
<PAGE> 102
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD SMALL COMPANY FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.47 $12.24 $10.71 $10.00
Income from investment operations:
Net investment income (loss) (0.03) (0.03) (0.01) 0.00
Net realized and unrealized gain (loss) on investments 8.70 1.38 2.09 1.43
------- ------- ------- -------
Total from investment operations 8.67 1.35 2.08 1.43
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00
Distributions from capital gains (1.30) (0.12) (0.55) (0.72)
Return of capital 0.00 0.00 0.00 0.00
------- ------- ------- -------
Total distributions (1.30) (0.12) (0.55) (0.72)
------- ------- ------- -------
Net asset value, end of period $20.84 $13.47 $12.24 $10.71
======= ======= ======= =======
TOTAL RETURN 66.37% 11.05% 19.69% 14.41%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $39,536 $13,004 $9,062 $72
Ratio of expenses to average net assets before waivers and
reimbursements 0.99% 1.02% 1.30% 115.33%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.99% 1.00% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net assets (0.46%) (0.33%) (0.14%) 0.03%(3)
Portfolio turnover rate(4) 176.74% 266.82% 255.37% 69.92%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
40 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 103
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD CAPITAL APPRECIATION FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $20.66 $20.05 $13.38 $10.00
Income from investment operations:
Net investment income (loss) 0.00 (0.06) (0.03) 0.00
Net realized and unrealized gain (loss) on investments 13.52 0.80 7.47 3.79
------- -------- ------- -------
Total from investment operations 13.52 0.74 7.44 3.79
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00
Distributions from capital gains (1.91) (0.13) (0.77) (0.41)
Return of capital 0.000 0.000 0.000 0.000
------- -------- ------- -------
Total distributions (1.91) (0.13) (0.77) (0.41)
------- -------- ------- -------
Net asset value, end of period $32.27 $20.66 $20.05 $13.38
======= ======== ======= =======
TOTAL RETURN 67.49% 3.68% 56.00% 37.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $64,688 $27,700 $26,693 $107
Ratio of expenses to average net assets before waivers and
reimbursements 0.87% 0.96% 1.13% 93.64%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.87% 0.96% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net assets (0.16%) (0.27%) (0.35%) 0.04%(3)
Portfolio turnover rate(4) 168.97% 123.42% 119.62% 149.99%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 41
<PAGE> 104
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MIDCAP FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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:
12/31/99 12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.35 $10.00
Income from investment operations:
Net investment income (loss) (0.02) (0.02)
Net realized and unrealized gain (loss) on investments 6.18 2.37
------- -------
Total from investment operations 6.16 2.35
Less distributions:
Dividends from net investment income 0.00 0.00
Distributions from capital gains (0.57) 0.00
Return of capital 0.000 0.000
------- -------
Total distributions (0.57) 0.00
------- -------
Net asset value, end of period $17.94 $12.35
======= =======
TOTAL RETURN 50.87% 23.62%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $17,997 $3,750
Ratio of expenses to average net assets before waivers and
reimbursements 0.97% 1.12%
Ratio of expenses to average net assets after waivers and
reimbursements 0.97% 1.00%
Ratio of net investment income (loss) to average net assets (0.31%) (0.33%)
Portfolio turnover rate(2) 122.52% 139.02%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
December 31, 1997.
(2) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
42 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 105
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.97 $10.62 $10.73 $10.00
Income from investment operations:
Net investment income (loss) 0.09 0.12 0.15 0.00
Net realized and unrealized gain (loss) on investments 4.51 1.27 (0.02) 0.84
------- ------- ------ -------
Total from investment operations 4.60 1.39 0.13 0.84
Less distributions:
Dividends from net investment income (0.18) (0.04) (0.07) (0.08)
Distributions from capital gains (0.83) 0.00 (0.17) (0.03)
Return of capital 0.000 0.000 0.000 0.000
------- ------- ------ -------
Total distributions (1.01) (0.04) (0.24) (0.11)
------- ------- ------ -------
Net asset value, end of period $15.56 $11.97 $10.62 $10.73
======= ======= ====== =======
TOTAL RETURN 39.63% 13.11% 1.31% 8.36%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $25,403 $10,860 $6,422 $64
Ratio of expenses to average net assets before waivers and
reimbursements 1.11% 1.36% 1.76% 126.52%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 1.11% 1.20% 1.20% 1.20%(3)
Ratio of net investment income (loss) to average net assets 1.07% 1.17% 1.33% 0.57%(3)
Portfolio turnover rate(4) 128.26% 148.58% 59.16% 21.51%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 43
<PAGE> 106
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GLOBAL LEADERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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-
12/31/99 12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.69 $10.00
Income from Investment Operations:
Net investment income (loss) 0.03 0.01
Net realized and unrealized gain (loss) on investments 6.08 3.03
------- ------
Total from investment operations 6.11 3.04
Less distributions:
Dividends from net investment income 0.00 0.00
Distributions from capital gains (0.12) (0.35)
Return of capital 0.000 0.000
------- ------
Total distributions (0.12) (0.35)
------- ------
Net asset value, end of period 18.68 $12.69
======= ======
TOTAL RETURN 48.39% 30.57%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $4,423 $392
Ratio of expenses to average net assets before waivers and
reimbursements 1.10% 2.46%(4)
Ratio of expenses to average net assets after waivers and
reimbursements 1.10% 1.20%(4)
Ratio of net investment income (loss) to average net assets 0.32% 0.31%(4)
Portfolio turnover rate(2) 203.74% 49.04%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(3) Not annualized.
(4) Annualized.
44 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 107
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD STOCK FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $19.89 $15.25 $11.55 $10.00
Income from investment operations:
Net investment income (loss) (0.01) 0.06 0.03 0.01
Net realized and unrealized gain (loss) on investments 4.53 4.78 3.70 1.57
------- ------ ------ -------
Total from investment operations 4.52 4.84 3.73 1.58
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 (0.03)
Distributions from capital gains (0.42) (0.19) (0.03) 0.00
Return of capital 0.00 (0.01) 0.000 0.000
------- ------ ------ -------
Total distributions (0.42) (0.20) (0.03) (0.03)
------- ------ ------ -------
Net asset value, end of period $23.99 $19.89 $15.25 $11.55
======= ====== ====== =======
TOTAL RETURN 22.91% 31.80% 32.33% 15.80%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $31,129 $7,919 $5,510 $44
Ratio of expenses to average net assets before waivers and
reimbursements 0.91% 0.96% 1.11% 133.50%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.91% 0.96% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net assets 0.36% 0.36% 0.53% 1.37%(3)
Portfolio turnover rate(4) 33.62% 37.03% 42.83% 11.87%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 45
<PAGE> 108
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD GROWTH AND INCOME FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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-
12/31/99 12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.48 $10.00
Income from investment operations:
Net investment income (loss) 0.06 0.05
Net realized and unrealized gain (loss) on investments 2.39 1.46
------ ------
Total from investment operations 2.45 1.51
Less distributions:
Dividends from net investment income 0.00 0.00
Distributions from capital gains (0.10) 0.00
Return of capital 0.00 (0.03)
------ ------
Total distributions (0.10) (0.03)
------ ------
Net asset value, end of period $13.83 $11.48
====== ======
TOTAL RETURN 21.45% 15.18%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $480 $386
Ratio of expenses to average net assets before waivers and
reimbursements 0.93% 1.20%(4)
Ratio of expenses to average net assets after waivers and
reimbursements 0.93% 1.00%(4)
Ratio of net investment income (loss) to average net assets 0.51% 0.76%(4)
Portfolio turnover rate(2) 52.98% 35.10%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
April 30, 1998.
(2) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(3) Not annualized.
(4) Annualized.
46 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 109
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD DIVIDEND AND GROWTH FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $16.69 $14.77 $11.46 $10.00
Income from investment operations:
Net investment income (loss) 0.21 0.24 0.21 0.02
Net realized and unrealized gain (loss) on investments 0.63 1.94 3.39 1.53
------- ------- ------- -------
Total from investment operations 0.84 2.18 3.60 1.55
Less distributions:
Dividends from net investment income (0.22) (0.19) (0.15) (0.07)
Distributions from capital gains (0.35) (0.07) (0.14) (0.02)
Return of capital 0.000 0.000 (0.000) 0.000
------- ------- ------- -------
Total distributions (0.57) (0.26) (0.29) (0.09)
------- ------- ------- -------
Net asset value, end of period $16.96 $16.69 $14.77 $11.46
======= ======= ======= =======
TOTAL RETURN 5.10% 14.86% 31.59% 15.49%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $23,616 $17,098 $13,236 $13,241
Ratio of expenses to average net assets before waivers and
reimbursements 0.87% 0.91% 1.09% 141.53%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.87% 0.91% 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net assets 1.42% 1.53% 1.83% 2.41%(3)
Portfolio turnover rate(4) 50.21% 46.43% 28.75% 29.80%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
THE HARTFORD MUTUAL FUNDS, INC. 47
<PAGE> 110
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD ADVISERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.80 $13.46 $11.10 $10.00
Income from investment operations:
Net investment income (loss) 0.35 0.29 0.31 0.03
Net realized and unrealized gain (loss) on investments 1.61 2.59 2.32 1.16
------- ------- ------- -------
Total from investment operations 1.96 2.88 2.63 1.19
Less distributions:
Dividends from net investment income (0.29) (0.28) (0.20) (0.09)
Distributions from capital gains (0.31) (0.26) (0.07) 0.00
Return of capital 0.000 0.000 0.000 0.000
------- ------- ------- -------
Total distributions (0.60) (0.54) (0.27) (0.09)
------- ------- ------- -------
Net asset value, end of period $17.16 $15.80 $13.46 $11.10
======= ======= ======= =======
TOTAL RETURN 12.62% 21.62% 23.80% 11.88%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $68,133 $57,891 $39,773 $34
Ratio of expenses to average net assets before waivers and
reimbursements 0.79% 0.90% 1.03% 144.82%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.79% 0.90% 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net assets 2.18% 2.09% 2.08% 2.75%(3)
Portfolio turnover rate(4) 34.63% 40.24% 38.62% 19.75%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
48 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 111
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD HIGH YIELD FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, 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-
12/31/99 12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.16 $10.00
Income from investment operations:
Net investment income (loss) 0.78 0.21
Net realized and unrealized gain (loss) on investments (0.39) 0.13
------- ------
Total from investment operations 0.39 0.34
Less distributions:
Dividends from net investment income (0.77) (0.18)
Distributions from capital gains 0.00 0.00
Return of capital 0.000 0.000
------- ------
Total distributions (0.77) (0.18)
------- ------
Net asset value, end of period $9.78 $10.16
======= ======
TOTAL RETURN 3.98% 3.51%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $2,314 $1,034
Ratio of expenses to average net assets before waivers and
reimbursements 0.90% 1.17%(4)
Ratio of expenses to average net assets after waivers and
reimbursements 0.90% 0.95%(4)
Ratio of net investment income (loss) to average net assets 8.20% 7.48%(4)
Portfolio turnover rate(2) 52.96% 10.85%
</TABLE>
(1) The Fund was declared effective by the Securities and Exchange Commission on
September 30, 1998.
(2) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(3) Not annualized.
(4) Annualized.
THE HARTFORD MUTUAL FUNDS, INC. 49
<PAGE> 112
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD BOND INCOME STRATEGY FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.81 $10.64 $10.27 $10.00
Income from investment operations:
Net Investment income (loss) 0.55 0.58 0.58 0.28
Net realized and unrealized gain (loss) on investments (0.80) 0.24 0.54 0.31
------- ------- ------- -------
Total from investment operations 0.25 0.82 1.12 0.59
Less distributions:
Dividends from net investment income (0.55) (0.57) (0.59) (0.26)
Distributions from capital gains (0.02) (0.08) (0.16) (0.06)
Return of capital 0.000 0.000 0.000 0.000
------- ------- ------- -------
Total distributions (0.57) (0.65) (0.75) (0.32)
------- ------- ------- -------
Net asset value, end of period $9.99 $10.81 $10.64 $10.27
======= ======= ======= =======
TOTAL RETURN (2.31%) 7.98% 11.30% 5.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $28,052 $10,766 $5,756 $5
Ratio of expenses to average net assets before waivers and
reimbursements 0.80% 0.84% 1.01% 185.34%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.80% 0.80% 0.80% 0.80%(3)
Ratio of net investment income (loss) to average net assets 5.77% 5.48% 5.98% 6.17%(3)
Portfolio turnover rate(4) 113.37% 135.01% 220.45% 75.52%(2)
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
50 THE HARTFORD MUTUAL FUNDS, INC.
<PAGE> 113
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE HARTFORD MONEY MARKET FUND
These tables are intended to help you understand each fund's financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate an
investor would have earned, or lost, on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y -
PERIOD ENDED:
7/1/96-
12/31/99 12/31/98 12/31/97 12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) 0.05 0.50 0.05 0.02
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00 0.00
------ ------ ------ --------
Total from investment operations 0.05 0.50 0.05 0.02
Less distributions:
Dividends from net investment income (0.05) (0.50) (0.05) (0.02)
Distributions from capital gains 0.00 0.00 (0.00) 0.00
Return of capital 0.000 0.000 0.000 0.000
------ ------ ------ --------
Total distributions (0.05) (0.50) (0.05) (0.02)
------ ------ ------ --------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
====== ====== ====== ========
TOTAL RETURN 4.80% 5.16% 5.23% 2.34%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,953 $5,320 $2,638 $0.3
Ratio of expenses to average net assets before waivers and
reimbursements 0.64% 0.71% 0.82% 3496.38%(3)
Ratio of expenses to average net assets after waivers and
reimbursements 0.55% 0.55% 0.55% 0.55%(3)
Ratio of net investment income (loss) to average net assets 4.70% 4.99% 5.13% 4.56%(3)
Portfolio turnover rate N/A N/A N/A N/A
</TABLE>
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
THE HARTFORD MUTUAL FUNDS, INC. 51
<PAGE> 114
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 115
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 116
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT
TO SHAREHOLDERS
Additional information on each fund is contained in the financial statements and
portfolio holdings in the fund's annual and semi-annual report. In the fund's
annual report you will also find a discussion of the market conditions and
investment strategies that significantly affected performance during the last
fiscal year, and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION
(SAI)
The SAI contains more detailed information on all aspects of the funds.
A current SAI and annual report have been filed with the Securities and Exchange
Commission and are incorporated by reference into (which means are legally a
part of) this prospectus.
To request a free copy of the current annual/ semiannual report and/or the SAI
or for shareholder inquiries, please contact the funds at:
BY MAIL:
The Hartford Mutual Funds, Inc.
P.O. Box 219054
Kansas City, MO 64121-9054
BY PHONE:
1-888-843-7824
ON THE INTERNET:
invest.hartfordlife.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-202-942-8090.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET OR BY E-MAIL:
Internet:
www.sec.gov
E-Mail:
[email protected]
Requests which are made by e-mail require the payment of a duplicating fee to
the SEC to obtain a document.
SEC FILE NUMBER: 811-07589
<PAGE> 117
PART B
THE HARTFORD MUTUAL FUNDS, INC. (the "Company")
THE HARTFORD GLOBAL HEALTH FUND
THE HARTFORD GLOBAL TECHNOLOGY FUND
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 219054
Kansas City, M0 64121-9054
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 219054,
Kansas City, MO 64121-9054 or call the number listed above.
Date of Prospectus: May 1, 2000
Date of Statement of Additional Information: May 1, 2000
<PAGE> 118
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
GENERAL INFORMATION...................................................... 3
INVESTMENT OBJECTIVES AND POLICIES....................................... 3
MANAGEMENT OF THE COMPANY................................................ 13
INVESTMENT ADVISORY ARRANGEMENTS......................................... 21
FUND EXPENSES............................................................ 25
DISTRIBUTION ARRANGEMENTS................................................ 25
DISTRIBUTION FINANCING PLANS............................................. 27
PORTFOLIO TRANSACTIONS AND BROKERAGE..................................... 29
DETERMINATION OF NET ASSET VALUE......................................... 31
PURCHASE AND REDEMPTION OF SHARES........................................ 32
INVESTMENT PERFORMANCE................................................... 34
TAXES.................................................................... 42
PRINCIPAL UNDERWRITER.................................................... 45
CUSTODIAN................................................................ 45
TRANSFER AGENT SERVICES.................................................. 46
INDEPENDENT PUBLIC ACCOUNTANTS........................................... 46
OTHER INFORMATION........................................................ 46
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS............................ 46
APPENDIX................................................................. 47
</TABLE>
<PAGE> 119
GENERAL INFORMATION
The Hartford Mutual Funds, Inc. (the "Company") is an open-end management
investment company consisting of fourteen separate 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 of the Funds. Hartford Investment
Financial Services Company ("HIFSCO") is the investment manager and principal
underwriter 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 $165 billion in assets. In addition, as investment
sub-advisers, Wellington Management Company LLP ("Wellington Management") and
Hartford Investment Management Company ("HIMCO(R)") provide the day-to-day
investment management of the Funds. HIMCO is a wholly-owned subsidiary of The
Hartford. The Hartford also sponsors a family of mutual funds that are primarily
used as investment options for variable annuity and variable life insurance
products issued by The Hartford and its affiliates And for certain retirement
plans. HL Investment Advisors, LLC ("HL Advisors"), an affiliate of The
Hartford, is the investment adviser to that family of 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 principal 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, 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 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
-3-
<PAGE> 120
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 policy does not apply to the
Global Technology Fund or the Global Health Fund. 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. The Global Health Fund may
invest more than 25% of its assets in an industry within the health care sector.
This fund will normally invest at least 25% of its total assets, in the
aggregate, in the following sector groups: drugs, medical products and health
services. The Global Technology Fund may invest more than 25% of its assets in
an industry within the technology sector. This fund will normally invest at
least 25% of its total assets, in the aggregate, in the following sector groups:
computers and equipment, software and services, electronics and communications
equipment.
In addition, each Fund, except the Global Health Fund and Global Technology
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.
Each of the Global Health Fund and Global Technology Fund will operate
as a non-diversified fund within the interpretation of the Securities and
Exchange Commission of the 1940 Act. This means that each of the Global Health
Fund and Global Technology Fund is permitted to invest more than 5% of each
fund's net assets in a particular issuer.
If a percentage restriction on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later change
in percentage resulting from changes in the values of a Fund's assets will not
be considered a violation of the restriction; provided, however, that the asset
coverage requirement applicable to borrowings under Section 18(f)(1) of the 1940
Act shall be maintained in the manner contemplated by that Section.
In order to permit the sale of shares of the Funds in certain states,
the Board of Directors may, in its sole discretion, adopt restrictions on
investment policy more restrictive than those described above. Should the Board
of Directors determine that any such more restrictive policy is no longer in the
best interest of a Fund and its shareholders, the Fund may cease offering shares
in the state involved and the Board of Directors may revoke such restrictive
policy. Moreover, if the states involved shall no longer require any such
restrictive policy, the Board of Directors may, in its sole discretion, revoke
such policy.
B. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUNDS.
The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without the approval of shareholders.
Each Fund may not:
1. Pledge, mortgage or hypothecate its assets, except to the extent
required to secure permitted borrowings. This investment restriction shall not
apply to any required segregated account or securities lending
-4-
<PAGE> 121
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.
MISCELLANEOUS INVESTMENT STRATEGIES AND RISKS The investment objective and
principal investment strategies for each Fund are discussed in the Fund's
prospectus. 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, subject to the overall supervision of HIFSCO. Such Funds
may invest up to 100% of their assets in cash or money market instruments only
for temporary defensive purposes.
Money market instruments include: (1) banker's acceptances; (2) obligations
of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.
REPURCHASE AGREEMENTS A repurchase agreement is an agreement by which the
seller of a security agrees to repurchase the security sold at a mutually agreed
upon time and price. It may also be viewed as the loan of money by a Fund to the
seller. The resale price by the fund would be in excess of the purchase price,
reflecting an agreed upon market interest rate.
Each Fund is permitted to enter into fully collateralized repurchase
agreements. The Company's Board of Directors has delegated to HIMCO and
Wellington Management the responsibility of evaluating the creditworthiness of
the banks and securities dealers with which the Funds will engage in repurchase
agreements.
HIMCO or Wellington Management will monitor such transactions to ensure
that the value of underlying
-5-
<PAGE> 122
collateral will be at least equal at all times to the total amount of the
repurchase obligation, including the accrued interest. If the seller defaults,
the Fund could realize a loss on the sale of the underlying security to the
extent that the proceeds of sale including accrued interest are less than the
resale price provided in the agreement including interest.
REVERSE REPURCHASE AGREEMENTS Each Fund may also enter into reverse
repurchase agreements. Reverse repurchase agreements involve sales by a Fund of
portfolio assets concurrently with an agreement by a Fund to repurchase the same
assets at a later date at a fixed price. Reverse repurchase agreements carry the
risk that the market value of the securities which a Fund is obligated to
repurchase may decline below the repurchase price. A reverse repurchase
agreement is viewed as a collateralized borrowing by a Fund. Borrowing magnifies
the potential for gain or loss on the portfolio securities of a Fund and,
therefore, increases the possibility of fluctuation in a Fund's net asset value.
A Fund will establish a segregated account with the Company's custodian bank in
which a Fund will maintain liquid assets equal in value to a Fund's obligations
in respect of reverse repurchase agreements.
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 (Global Health
Fund, Global Technology Fund, Advisers Fund, High Yield Fund, International
Opportunities Fund, Bond Income Strategy Fund and Money Market Fund only), (4)
mortgage-related securities, including collateralized mortgage obligations
("CMO's") (Advisers Fund, High Yield Fund and Bond Income Strategy Fund only);
and (5) 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 The Money Market Fund is permitted to
invest only in high quality, short term instruments as determined by Rule 2a-7
under the 1940 Act. Each of the other Funds 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.
HIGH YIELD-HIGH RISK DEBT SECURITIES Each of the Global Health Fund, Global
Technology Fund, 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
-6-
<PAGE> 123
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 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.
ASSET-BACKED SECURITIES The Global Health Fund, Global Technology Fund,
International Opportunities Fund, Advisers Fund, High Yield Fund, Bond Income
Strategy Fund and Money Market Fund may invest in asset-backed securities. The
securitization techniques used for asset-backed securities are similar to those
used for mortgage-related securities. The collateral for these securities has
included home equity loans, automobile and credit card receivables, boat loans,
computer leases, airplane leases, mobile home loans, recreational vehicle loans
and hospital accounts receivables. These Funds may invest in these and other
types of asset-backed securities that may be developed in the future. These
securities may be subject to the risk of prepayment or default. The ability of
an issuer of asset-backed securities to enforce its security interest in the
underlying securities may be limited.
EQUITY SECURITIES Each Fund except the Bond Income Strategy Fund and High
Yield Fund as described below and except the Money Market Fund may invest all or
a portion of their assets in equity securities which
-7-
<PAGE> 124
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 (including securities issued in initial public
offerings) 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, may have less historical data with respect to operations
and management and may be more dependent on a limited number of key employees.
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. Small Capitalization Securities may be more likely
to be offered in initial public offerings. Because securities issued in initial
public offerings are being offered to the public for the first time, the market
for such securities may be inefficient and less liquid.
NON-U.S. ISSUERS Each Fund is permitted to invest a portion of its assets
in securities of non-U.S. issuers, 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. Generally, a non-U.S. company is considered to be a company that is
domiciled in a country other than the United States. When selecting securities
of non-U.S. issuers, HIMCO or Wellington Management will evaluate the economic
and political climate and the principal securities markets of the country in
which an issuer is located.
The Small Company, Capital Appreciation, MidCap, Stock, Growth and Income,
Dividend and Growth, and Advisers Funds are permitted to invest up to 20% of
their assets in non-U.S. issuers. The Money Market Fund may invest up to 25% of
its assets (U.S. dollar denominated only), the Bond Income Strategy and High
Yield Funds are permitted to invest up to 30% of their assets and the
International Opportunities Fund invests 100% of its assets in such issuers.
Each of the Bond Income Strategy Fund and High Yield Fund may also invest up to
10% of their assets in securities denominated in foreign currencies. The Global
Leaders Fund invests in at least five countries, one of which is the United
States, however, the fund has no limit on the amount of assets that must be
invested in each country. The Global Health Fund and Global Technology Fund each
invest in at least three countries, one of which may be the United States;
however, the funds have no limit on the amount of assets that must be invested
in each country. The Global Health Fund and Global Technology Fund may invest in
securities denominated in any currency.
Investing in securities issued by non-U.S. issuers involves considerations
and potential risks not typically associated with investing in obligations
issued by U.S. issuers. Less information may be available about non-U.S. issuers
compared with U.S. issuers. For example, non-U.S. companies generally are not
subject to uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements comparable to those applicable to
U.S. companies. In addition, the values of non-U.S. securities are affected by
changes in currency rates or exchange control regulations, restrictions or
prohibition on the repatriation of non-U.S. currencies, application of non-U.S.
tax laws, including withholding taxes, changes in governmental administration or
economic or monetary policy (in the U.S. or outside the U.S.) or changed
circumstances in dealings between nations. Costs are also incurred in connection
with conversions between various currencies.
-8-
<PAGE> 125
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, each of the Global Health Fund, Global Technology Fund,
Global Leaders Fund and International Opportunities Fund may invest up to 25% of
each of their assets and the High Yield Fund and Bond Fund may invest up to 30%
of each 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 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
-9-
<PAGE> 126
in its portfolio or that it intends to purchase. For example, if a Fund enters
into a contract to purchase securities denominated in foreign currency, it could
effectively establish the maximum U.S. dollar cost of the securities by
purchasing call options on that foreign currency. Similarly, if a Fund held
securities denominated in a foreign currency and anticipated a decline in the
value of that currency against the U.S. dollar, the Fund could hedge against
such a decline by purchasing a put option on the foreign currency involved.
Aggregates are composites of equity or debt securities that are not tied to
a commonly known index. An index is a measure of the value of a group of
securities or other interests. An index assigns relative values to the
securities included in that index, and the index fluctuates with changes in the
market value of those securities. A Fund may purchase put and call options and
write covered put and call options on aggregates of equity and debt securities,
and may enter into futures contracts and options thereon for the purchase or
sale of aggregates of equity and debt securities, indices of equity and debt
securities and other financial indices, all for the purpose of protecting
against potential changes in the market value of portfolio securities or in
interest rates.
A Fund may write covered options only. "Covered" means that, so long as a
Fund is obligated as the writer of a call option on particular securities or
currency, it will own either the underlying securities or currency or an option
to purchase the same underlying securities or currency having an expiration date
not earlier than the expiration date of the covered option and an exercise price
equal to or less than the exercise price of the covered option, or will
establish or maintain with its custodian for the term of the option a segregated
account consisting of liquid assets 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 or partially hedge against a rise in foreign exchange rates pending
completion of the anticipated transaction. Such a purchase of a futures contract
would serve as a temporary measure to protect the Fund against any rise in the
foreign exchange rate that may add additional costs to acquiring the non-U.S.
security position. The Fund similarly may use futures contracts on equity and
debt securities to hedge against fluctuations in the value of securities it owns
or expects to acquire.
The Funds also may purchase call or put options on foreign currency futures
contracts to obtain a fixed foreign exchange rate at limited risk. A Fund may
purchase a call option on a foreign currency futures contract to hedge against a
rise in the foreign exchange rate while intending to invest in a non-U.S.
security of the same currency. A Fund may purchase put options on foreign
currency futures contracts to hedge against a decline in the foreign exchange
rate or the value of its non-U.S. securities. A Fund may write a call option on
a foreign currency futures contract as a partial hedge against the effects of
declining foreign exchange rates on the value of non-U.S. securities and in
circumstances consistent with a Fund's investment objectives and policies.
Options on indexes are settled in cash, not in delivery of securities. The
exercising holder of an index option receives, instead of a security, cash equal
to the difference between the closing price of the securities index and the
exercise price of the option. When a Fund writes a covered option on an index, a
Fund will be required to deposit and maintain with a custodian liquid assets
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 liquid assets equal
in value to the deficiency.
To the extent that a Fund enters into futures contracts, options on futures
contracts and options on foreign
-10-
<PAGE> 127
currencies that are traded on an exchange regulated by the Commodities Futures
Trading Commission ("CFTC"), in each case that are not for "bona fide hedging"
purposes (as defined by regulations of the CFTC), the aggregate initial margin
and premiums required to establish those positions may not exceed 5% of the
liquidation value of the Fund's portfolio, after taking into account the
unrealized profits and unrealized losses on any such contracts the Fund has
entered into. However, options which are currently exercisable may be excluded
in computing the 5% limit. Adoption of this guideline will not limit the
percentage of a Fund's assets at risk to 5%.
Although any one Fund may not employ all or any of the foregoing
strategies, its use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve certain
investment risks and transaction costs to which it might not be subject were
such strategies not employed. Such risks include: (1) dependence on the ability
of HIMCO or Wellington Management to predict movements in the prices of
individual securities, fluctuations in the general securities markets or market
sections and movements in interest rates and currency markets; (2) imperfect
correlation between movements in the price of the securities or currencies
hedged or used for cover; (3) the fact that skills and techniques needed to
trade options, futures contracts and options thereon or to use forward currency
contracts are different from those needed to select the securities in which a
Fund invests; (4) lack of assurance that a liquid secondary market will exist
for any particular option, futures contract, option thereon or forward contract
at any particular time, which may affect a Fund's ability to establish or close
out a position; (5) possible impediments to effective portfolio management or
the ability to meet current obligations caused by the segregation of a large
percentage of a Fund's assets to cover its obligations; and (6) the possible
need to defer closing out certain options, futures contracts, options thereon
and forward contracts in order to continue to qualify for the beneficial tax
treatment afforded "regulated investment companies" under the Code. In the event
that the anticipated change in the price of the securities or currencies that
are the subject of such a strategy does not occur, it may be that a Fund would
have been in a better position had it not used such a strategy at all.
SWAP AGREEMENTS Each Fund, except the Money Market Fund, may enter into
interest rate swaps, currency swaps, and other types of swap agreements such as
caps, collars, and floors. In a typical interest rate swap, one party agrees to
make regular payments equal to a floating interest rate multiplied by a
"notional principal amount," in return for payments equal to a fixed rate
multiplied by the same amount, for a specified period of time. If a swap
agreement provides for payments in different currencies, the parties might agree
to exchange the notional principal amount as well. Swaps may also depend on
other prices or rates, such as the value of an index or mortgage prepayment
rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.
Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
floating rate payments for fixed rate payments, the swap agreement would tend to
decrease the Fund's exposure to rising interest rates. Caps and floors have an
effect similar to buying or writing options. Depending on how they are used,
swap agreements may increase or decrease the overall volatility of a Fund's
investments and its share price and yield.
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 covered by an amount consisting of liquid assets
having an aggregate net asset value at least equal to the accrued excess
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 to be creditworthy. If a default
occurs by the other party to such transaction, a Fund will have
-11-
<PAGE> 128
contractual remedies pursuant to the agreements related to the transaction but
such remedies may be subject to bankruptcy and insolvency laws which could
affect such Fund's rights as a creditor.
The swap market has grown substantially in recent years with a large number
of banks and financial services firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps, collars and floors are more recent innovations
and they are less liquid than swaps. There can be no assurance, however, that a
Fund will be able to enter into interest rate swaps or to purchase interest rate
caps, collars or floors at prices or on terms HIMCO or Wellington Management, as
appropriate, believes are advantageous to such Fund. In addition, although the
terms of interest rate swaps, caps, collars and floors may provide for
termination, there can be no assurance that a Fund will be able to terminate an
interest rate swap or to sell or offset interest rate caps, collars or floors
that it has purchased. Interest rate swaps, caps, collars and floors are
considered by the SEC to be illiquid securities.
The successful utilization of hedging and risk management transactions
requires skills different from those needed in the selection of a Fund's
portfolio securities and depends on HIMCO's or Wellington Management's ability
to predict correctly the direction and degree of movements in interest rates.
Although the Funds believe that use of the hedging and risk management
techniques described above will benefit the Funds, if HIMCO's or Wellington
Management's judgment about the direction or extent of the movement in interest
rates is incorrect, a Fund's overall performance would be worse than if it had
not entered into any such transactions. For example, if a Fund had purchased an
interest rate swap or an interest rate floor to hedge against its expectation
that interest rates would decline but instead interest rates rose, such Fund
would lose part or all of the benefit of the increased payments it would receive
as a result of the rising interest rates because it would have to pay amounts to
its counterparties under the swap agreement or would have paid the purchase
price of the interest rate floor. These activities are commonly used when
managing derivative investments.
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 the Money Market Fund's net assets or 15% of each other Fund's net
assets would consist of such securities. "Illiquid Securities" are securities
that may not be sold or disposed of in the ordinary course of business within
seven days at approximately the price used to determine a Fund's net asset
value. Each Fund may purchase certain restricted securities commonly known as
Rule 144A securities that can be resold to institutions and which may be
determined to be liquid pursuant to policies and guidelines of the Board of
Directors. A Fund may not be able to sell illiquid securities when HIMCO or
Wellington Management considers it desirable to do so or may have to sell such
securities at a price that is lower than the price that could be obtained if the
securities were more liquid. A sale of illiquid securities may require more time
and may result in higher dealer discounts and other selling expenses than does
the sale of securities that are not illiquid. Illiquid securities also may be
more difficult to value due to the unavailability of reliable market quotations
for such securities, and investment in illiquid securities may have an adverse
impact on net asset value.
Under current interpretations of the SEC Staff, the following types of
securities in which a Fund may invest will be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain restricted
securities (securities whose public resale is subject to legal or contractual
restrictions); (3) options, with respect to specific securities, not traded on a
national securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES Each Fund is permitted to
purchase or sell securities on a when-issued or delayed-delivery basis.
When-issued or delayed-delivery transactions arise when securities are purchased
or sold with payment and delivery taking place in the future in order to secure
what is considered to be an advantageous price and yield at the time of entering
into the transaction. While the Funds generally purchase securities on a
when-issued basis with the intention of acquiring the securities, the Funds may
sell the securities before the settlement date if HIMCO or Wellington Management
deems it advisable. At the time a Fund makes the commitment to purchase
securities on a when-issued basis, the Fund will record the transaction and
thereafter reflect the value, each day, of such security in determining the net
asset value of the Fund. At the time of delivery of the securities, the value
may be more or less than the purchase price. A Fund will maintain, in a
segregated account, liquid assets having a value equal to or greater than the
Fund's purchase commitments; likewise a Fund will
-12-
<PAGE> 129
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. Generally, a Fund will not purchase a
security of an investment company if, as a result, (1) more than 10% of the
Fund's assets would be invested in securities of other investment companies, (2)
such purchase would result in more than 3% of the total outstanding voting
securities of any one such investment company being held by the Fund; or (3)
more than 5% of the Fund's assets would be invested in any one such investment
company.
PORTFOLIO SECURITIES LENDING Each of the Funds may lend its portfolio
securities to broker/dealers and other institutions as a means of earning
interest income. The borrower will be required to deposit as collateral, cash,
cash equivalents, U.S. government securities or other high quality liquid debt
securities that at all times will be at least equal to 100% of the market value
of the loaned securities and such amount will be maintained in a segregated
account of the respective Fund. While the securities are on loan the borrower
will pay the respective Fund any income accruing thereon.
Delays or losses could result if a borrower of portfolio securities becomes
bankrupt or defaults on its obligation to return the loaned securities. The
Funds may lend securities only if: (1) each loan is fully secured by appropriate
collateral at all times; and (2) the value of all loaned securities of any Fund
is not more than 33-1/3% of the Fund's total assets taken at the time of the
loan (including collateral received in connection with any loans).
MANAGEMENT OF THE COMPANY
The business of the Company is managed by a Board of Directors, who elect
officers who are responsible for the day-to-day operations of the Company and
who execute policies formulated by the directors. The directors and officers of
the Company and their principal business occupations for the last five years are
set forth below. Those directors who are deemed to be "interested persons" of
the Company, as that term is defined in the 1940 Act are indicated by an
asterisk next to their respective names.
<TABLE>
<CAPTION>
POSITION
NAME, ADDRESS, AGE HELD WITH PRINCIPAL OCCUPATIONS HELD
COMPANY DURING LAST 5 YEARS
- ------------------------------------------------ ----------- ---------------------------------------------------------
<S> <C> <C>
ROBERT J. CLARK (age 67) Director Mr. Clark, currently retired, served as President of
725 Mapleton Avenue American Nuclear Insurers from 1990 to 1997.
Suffield, CT 06078 Previously, Mr. Clark served in positions of increasing
responsibility with Aetna Life & Casualty Company from
1955 to 1989 retiring as President of the Commercial
Insurance Division. Mr. Clark is also an active
director or trustee with Hartford Health Care
Corporation, Hartford Hospital, CHS Insurance, Ltd. and
St. Joseph's College.
WINIFRED ELLEN COLEMAN (age 67) Director Ms. Coleman has served as President of Saint Joseph
27 Buckingham Lane College since 1991. She is a Director of LeMoyne
West Hartford, CT 06117 College, St. Francis Hospital, Connecticut Higher
Education Student Loan Administration, and The National
Conference (Greater Hartford Board of Directors).
</TABLE>
-13-
<PAGE> 130
<TABLE>
<CAPTION>
POSITION
NAME, ADDRESS, AGE HELD WITH PRINCIPAL OCCUPATIONS HELD
COMPANY DURING LAST 5 YEARS
- ------------------------------------------------ ----------- ---------------------------------------------------------
<S> <C> <C>
WILLIAM ATCHISON O'NEILL (age 69) Director The Honorable William A. O'Neill served as Governor of
Box 360 the State of Connecticut from 1980 until 1991. He is
East Hampton, CT 06424 presently retired.
MILLARD HANDLEY PRYOR, JR. (age 66) Director Mr. Pryor has served as Managing Director of Pryor &
695 Bloomfield Avenue Clark Company, Hartford, Connecticut, since June, 1992.
Bloomfield, CT 06002 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 60) Director and Mr. Smith has served as Vice Chairman of Hartford
P.O. Box 2999 Chairman Financial Services Group, Inc. since February, 1997, as
Hartford, CT 06104-2999 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 and HL Advisors.
JOHN KELLEY SPRINGER (age 68) Director Mr. Springer currently serves as Chairman of Medspan,
225 Asylum Avenue Inc. From 1986 to 1997 he served as Chief Executive
Hartford, CT 06103 Officer of Connecticut Health System, Inc. Formerly, he
served as the Chief Executive Officer of Hartford
Hospital, Hartford, Connecticut (June, 1976 - August,
1989). He is also a Director of Hartford Hospital, and
CHS Insurance Ltd. (Chairman).
DAVID M. ZNAMIEROWSKI (age 39) President Mr. Znamierowski currently serves as Senior Vice
55 Farmington Avenue and Director President, Chief Investment Officer and Director of
Hartford, CT 06105 Investment Strategy for Hartford Life, Inc. Mr. Znamierowski
previously was Vice President, Investment Strategy and Policy
with Aetna Life & Casualty Company from 1991 to 1996 and held
several positions including Vice President, Corporate Finance
with Solomon Brothers from 1986 to 1991. Mr. Znamierowski
is also a Director and Senior Vice President of HIFSCO and a
Managing Member and Senior Vice President of HL Advisors.
</TABLE>
-14-
<PAGE> 131
<TABLE>
<CAPTION>
POSITION
NAME, ADDRESS, AGE HELD WITH PRINCIPAL OCCUPATIONS HELD
COMPANY DURING LAST 5 YEARS
- ------------------------------------------------ ----------- ---------------------------------------------------------
<S> <C> <C>
PETER CUMMINS (age 62) Vice Mr. Cummins has served as Senior Vice President since
P. O. Box 2999 President 1997 and Vice President since 1989 of sales and
Hartford, CT 06104-2999 marketing of the Investment Products Division of
Hartford Life Insurance Company. He is also a Director and
Senior Vice President of HIFSCO and a Managing Member and
Senior Vice President of HL Advisors.
ANDREW WILLIAM KOHNKE (age 41) Vice Mr. Kohnke serves as Managing Director and a Director
55 Farmington Avenue President of HIMCO. Previously he served as Vice President of
Hartford, CT 06105 HIMCO (1986-1996) and Investment Manager for HIMCO
(1983-1986). Mr. Kohnke is also a Director and Senior
Vice President of HIFSCO and a Managing Member and
Senior Vice President of HL Advisors.
THOMAS MICHAEL MARRA (age 41) Vice Mr. Marra has served as Chief Operating Officer since
P.O. Box 2999 President 2000, Executive Vice President since 1996, and as
Hartford, CT 06104-2999 Senior Vice President and Director since 1994 of the
Investment Products Division of Hartford Life Insurance
Company. Mr. Marra is also a Director and Executive
Vice President of HIFSCO and a Managing Member and
Executive Vice President of HL Advisors.
CHARLES MINER O'HALLORAN (age 52) Vice Mr. O'Halloran has served as Senior Vice President
Hartford Plaza President since January, 1998, Corporate Secretary from 1996 to
Hartford, CT 06115 and Secretary 1998, Vice President since 1994 and Senior Associate
General Counsel since 1988 of The Hartford Financial
Services Group, Inc. Mr. O'Halloran is also a Director,
Secretary and General Counsel of HIMCO.
GEORGE RICHARD JAY (age 47) Controller Mr. Jay has served as Secretary and Director, Life and
P.O. Box 2999 and Treasurer Equity Accounting and Financial Control, of Hartford
Hartford, CT 06104-2999 Life Insurance Company since 1987.
KEVIN J. CARR (age 45) Assistant Mr. Carr has served as Assistant General Counsel since
55 Farmington Avenue Secretary 1999, Counsel since November 1996 and Associate Counsel
Hartford, CT 06105 and 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 and Associate Counsel of 440 Financial Group of
Worcester from 1994 to 1995. Mr. Carr is also Counsel and
Assistant Secretary of HL Advisors and HIFSCO and Assistant
Secretary of HIMCO.
</TABLE>
-15-
<PAGE> 132
<TABLE>
<CAPTION>
POSITION
NAME, ADDRESS, AGE HELD WITH PRINCIPAL OCCUPATIONS HELD
COMPANY DURING LAST 5 YEARS
- ------------------------------------------------ ----------- ---------------------------------------------------------
<S> <C> <C>
CHRISTOPHER JAMES COSTA (age 35) Assistant Mr. Costa has served as the Tax Manager of The
P.O. Box 2999 Secretary Hartford-Sponsored Mutual Funds since July 1996.
Hartford, CT 06104-2999 Formerly he served as the Tax Manager and Assistant
Treasurer of The Phoenix Mutual Funds from June 1994
to June 1996 and as a Tax Consultant with Arthur Andersen
LLP from September 1990 to June 1994.
</TABLE>
An Audit Committee and Nominating Committee have been appointed for the
Company. Each Committee is made up of those directors who are not "interested
persons" of the Company.
All board members and officers of the Fund are also board members and
officers of the following registered investment companies: Hartford Capital
Appreciation HLS Fund, Inc., Hartford Dividend and Growth HLS Fund, Inc.,
Hartford MidCap HLS Fund, Inc., Hartford Stock HLS Fund, Inc., Hartford Index
HLS Fund, Inc., Hartford Advisers HLS Fund, Inc., Hartford Mortgage Securities
HLS Fund, Inc., Hartford Bond HLS Fund, Inc., Hartford International
Opportunities HLS Fund, Inc., Hartford International Advisers HLS Fund, Inc.,
Hartford Money Market HLS Fund, Inc., Hartford Small Company HLS Fund, Inc. and
Hartford Series Fund, Inc. Shares of each of these investment companies are
offered to and may only be purchased by holders of variable annuity and variable
life insurance contracts issued by The Hartford and its affiliates or certain
qualified retirement plans.
The sales load for Class A shares of the Company is waived for present and
former officers, directors and employees of the Company, The Hartford,
Wellington Management, the transfer agent and their affiliates.
COMPENSATION OF OFFICERS AND DIRECTORS The Company pays no salaries or
compensation to any of its officers or directors affiliated with The Hartford.
The chart below sets forth the fees paid by the Company to the non-interested
Directors for the 1999 fiscal year and certain other information:
<TABLE>
<CAPTION>
Pension Or Total Compensation
Aggregate Retirement Benefits Estimated Annual From Company And
Compensation From Accrued As Part Of Benefits Upon Fund Complex Paid To
Name of Person, Position Company Fund Expenses Retirement Directors*
<S> <C> <C> <C> <C>
Robert J. Clark, Director $2,337.50 $0 $0 $8,250
Winifred E. Coleman, Director $8,737.50 $0 $0 $31,000
William A. O'Neill, Director $8,737.50 $0 $0 $31,000
Millard H. Pryor, Director $7,737.50 $0 $0 $28,000
John K. Springer, Director $8,737.50 $0 $0 $31,000
</TABLE>
*As of December 31, 1999, 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 4.8 billion shares of common stock, par value $0.001 per share (Common
Stock). The shares of Common Stock are divided into fourteen series: Global
Health Fund (300,000,000); Global Technology Fund (300,000,000); 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
-16-
<PAGE> 133
shares); High Yield Fund (300,000,000 shares); Bond Income Strategy Fund
(300,000,000 shares) and Money Market Fund (800,000,000 shares). The Board of
Directors may reclassify authorized shares to increase or decrease the
allocation of shares among the series described above or to add any new series
to the Fund. The Board of Directors is also authorized, from time to time and
without further shareholder approval, to authorize additional shares and to
classify and reclassify existing and new series into one or more classes.
Accordingly, the Directors have authorized the issuance of four classes of
shares of each of the Funds designated in each instance as Class A, Class B,
Class C and Class Y shares.
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 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.
The start dates of each fund are as follows:
<TABLE>
<CAPTION>
<S> <C>
Advisers Fund July 22, 1996
Bond Income Strategy Fund July 22, 1996
Capital Appreciation Fund July 22, 1996
Dividend and Growth Fund July 22, 1996
International Opportunities Fund July 22, 1996
Money Market Fund July 22, 1996
Small Company Fund July 22, 1996
Stock Fund July 22, 1996
MidCap Fund December 31, 1997
Growth and Income Fund April 30, 1998
Global Leaders Fund September 30, 1998
High Yield Fund September 30, 1998
Global Health Fund May 1, 2000
Global Technology Fund May 1, 2000
</TABLE>
As of January 31, 2000, 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 outstanding shares of a class:
-17-
<PAGE> 134
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
SMALL COMPANY FUND
<S> <C> <C> <C> <C>
HL Investment Advisors -- 11.98% -- 12.69%
Hartford, CT
Edward D. Jones & Co. 42.14% 10.40% 11.73% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee -- -- -- 62.87%
The Hartford Investment & Savings Plan
Jersey City, NJ
Saxon & Company -- -- -- 10.76%
Philadelphia, PA
Greater Orlando Aviation Authority -- -- -- 6.65%
FBO Employees of Greater Orlando Aviation Authority
Orlando, FL
CAPITAL APPRECIATION FUND
Edward D. Jones & Co. 47.47% 12.34% 15.21% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee -- -- -- 77.68%
The Hartford Investment & Savings Plan
Jersey City, NJ
Greater Orlando Aviation Authority -- -- -- 7.52%
FBO Employees of Greater Orlando Aviation Authority
Orlando, FL
MIDCAP FUND
HL Investment Advisors -- -- -- 11.76%
Hartford, CT
Edward D. Jones & Co. 47.66% 15.87% 9.10% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
</TABLE>
-18-
<PAGE> 135
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Bankers Trust Company, Trustee -- -- -- 66.82%
The Hartford Investment & Savings Plan
Jersey City, NJ
INTERNATIONAL OPPORTUNITIES FUND
HL Investment Advisors -- 9.03% -- 12.14%
Hartford, CT
Edward D. Jones & Co. 70.24% 22.60% 21.37% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee -- -- -- 56.47%
The Hartford Investment & Savings Plan
Jersey City, NJ
Saxon & Company -- -- -- 14.99%
Philadelphia, PA
Hartford Life Insurance Company -- -- -- 12.48%
Simsbury, CT
GLOBAL LEADERS FUND
HL Investment Advisors -- -- -- 13.14%
Hartford, CT
Edward D. Jones & Co. 53.34% 20.64% 16.73% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
FTC & Company 5.92% -- -- --
Denver, CO
Bankers Trust Company, Trustee -- -- -- 86.86%
The Hartford Investment & Savings Plan
Jersey City, NJ
STOCK FUND
Edward D. Jones & Co. 60.62% 16.63% 14.59% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Saxon & Company -- -- -- 48.97%
Philadelphia, PA
Greater Orlando Aviation Authority -- -- -- 40.37%
FBO Employees of Greater Orlando Aviation Authority
Orlando, FL
</TABLE>
-19-
<PAGE> 136
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
GROWTH AND INCOME FUND
HL Investment Advisors -- -- -- 87.45%
Hartford, CT
Edward D. Jones & Co. 78.13% 35.82% 28.99% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
DIVIDEND AND GROWTH FUND
Edward D. Jones & Co. 67.39% 20.12% 21.21%
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee -- -- -- 76.17%
The Hartford Investment & Savings Plan
Jersey City, NJ
HL Investment Advisors -- -- -- 14.72%
Hartford, CT
ADVISERS FUND
Edward D. Jones & Co. 62.18% 15.67% 14.92% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee -- -- -- 96.23%
The Hartford Investment & Savings Plan
Jersey City, NJ
HIGH YIELD FUND
HL Investment Advisors 42.83% 14.24% 12.57% 46.46%
Hartford, CT
Edward D. Jones & Co. 41.70% 15.92% 21.86% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee -- -- -- 53.53%
The Hartford Investment & Savings Plan
Jersey City, NJ
BOND INCOME STRATEGY FUND
HL Investment Advisors 41.47% 14.75% -- 7.71%
Hartford, CT
</TABLE>
-20-
<PAGE> 137
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Edward D. Jones & Co. 36.97% 16.04% 37.09% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Saxon & Company -- -- -- 48.50%
Philadelphia, PA
First Clearing Corporation -- -- 5.27% --
For the Sole Benefit of Peter Depaul
Bankers Trust Company, Trustee -- -- -- 23.22%
The Hartford Investment & Savings Plan
Jersey City, NJ
Hartford Life Insurance Company -- -- -- 20.57%
Simsbury, CT
MONEY MARKET FUND
HL Investment Advisors 21.15% 8.49% -- --
Hartford, CT
Edward D. Jones & Co. 10.47% 8.43% 14.39% --
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee -- -- -- 100.00%
The Hartford Investment & Savings Plan
Jersey City, NJ
</TABLE>
Such information for the Global Health Fund and Global Technology Fund is not
shown because each fund commenced operation in 2000.
INVESTMENT MANAGEMENT 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 Global Health Fund, Global Technology Fund, 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. Under the sub-advisory
agreement, Wellington Management, subject to the general supervision of the
Board of Directors and HIFSCO, is responsible for (among other things) the
day-to-day investment and reinvestment of the assets of such Funds and
furnishing each such Fund with advice and recommendations with respect to
investments and the purchase and sale of appropriate securities for each Fund.
With respect to the High Yield Fund, Bond Income Strategy Fund and Money Market
Fund, HIFSCO has entered into an investment services agreement with HIMCO for
the provision of the day-to-day investment management services.
As provided by the investment management agreement, each Fund pays HIFSCO
an investment management fee, which is accrued daily and paid monthly, equal on
an annual basis to a stated percentage of the respective Fund's average daily
net asset value. HIFSCO, not any Fund, pays the subadvisory fees to Wellington
-21-
<PAGE> 138
Management and HIMCO.
No person other than HIMCO or Wellington Management and their directors and
employees regularly furnishes advice to the Funds with respect to the
desirability of the Funds investing in, purchasing or selling securities. HIMCO
and Wellington Management may from time 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.
For the last three years, each Fund has paid the following advisory fees:
<TABLE>
<CAPTION>
FUND NAME 1999
Gross Fees Fees Waived Net Paid
<S> <C> <C> <C>
Global Health Fund(1) -- -- --
Global Technology Fund(1) -- -- --
Small Company Fund 956,010 8,181 947,829
Capital Appreciation Fund 6,997,746 -- 6,997,746
MidCap Fund 801,175 19,156 782,019
International Opportunities Fund 654,008 -- 654,008
Global Leaders Fund 381,290 -- 381,290
Stock Fund 7,147,445 -- 7,147,445
Growth and Income Fund 412,065 842 411,223
Dividend and Growth Fund 2,838,557 -- 2,838,557
Advisers Fund 8,125,222 -- 8,125,222
High Yield Fund 202,354 -- 202,354
Bond Income Strategy Fund 701,167 2,532 698,635
Money Market Fund 360,369 71,757 288,612
</TABLE>
(1) Fund commenced operation in 2000.
-22-
<PAGE> 139
<TABLE>
<CAPTION>
FUND NAME 1998
Gross Fees Fees Waived Net Paid
<S> <C> <C> <C>
Global Health Fund(1) -- -- --
Global Technology Fund(1) -- --
Small Company Fund $435,779 33,329 402,450
Capital Appreciation Fund $4,745,355 3,762 4,741,593
MidCap Fund $162,458 25,070 137,388
International Opportunities Fund $367,845 83,930 283,915
Global Leaders Fund $8,591 10,660 0
Stock Fund $2,072,900 28,040 2,044,860
Growth and Income Fund $43,952 8,949 35,003
Dividend and Growth Fund $1,667,617 6,047 1,661,570
Advisers Fund $2,704,478 17,556 2,686,922
High Yield Fund $22,100 4,947 17,153
Bond Income Strategy Fund $365,863 20,229 345,634
Money Market Fund $192,694 73,325 119,369
</TABLE>
(1) Fund commenced operation in 2000.
<TABLE>
<CAPTION>
FUND NAME 1997
Gross Fees Fees Waived Net Paid
<S> <C> <C> <C>
Global Health Fund(1) -- -- --
Global Technology Fund(1) -- -- --
Small Company Fund $146,564 58,906 87,658
Capital Appreciation Fund $1,183,411 325,718 857,693
MidCap Fund(2) -- -- --
International Opportunities Fund $133,737 97,686 36,051
Global Leaders Fund(2) -- -- --
Stock Fund $316,618 85,728 230,890
Growth and Income Fund(2) -- -- --
Dividend and Growth Fund $326,978 93,290 233,688
Advisers Fund $675,902 128,081 547,821
High Yield Fund(2) -- -- --
Bond Income Strategy Fund $153,486 47,166 106,320
Money Market Fund $108,150 70,901 37,249
</TABLE>
(1) Fund commenced operation in 2000.
(2) Funds commenced operations in 1998.
HIFSCO has agreed to limit the expenses of each of the Funds through
April 30, 2001 by reimbursing each Fund when total fund expenses exceed the
following percentages:
-23-
<PAGE> 140
<TABLE>
<CAPTION>
FUND NAME CLASS A CLASSES B & C CLASS Y
- --------- ------- ------------- -------
<S> <C> <C> <C>
Global Health Fund 1.65% 2.35% 1.20%
Global Technology Fund 1.65% 2.35% 1.20%
Small Company Fund 1.45% 2.15% 1.00%
Capital Appreciation Fund 1.45% 2.15% 1.00%
MidCap Fund 1.45% 2.15% 1.00%
Stock Fund 1.45% 2.15% 1.00%
Growth and Income Fund 1.45% 2.15% 1.00%
Dividend and Growth Fund 1.40% 2.10% 0.95%
Advisers Fund 1.40% 2.10% 0.95%
International Opportunities Fund 1.65% 2.35% 1.20%
Global Leaders Fund 1.65% 2.35% 1.20%
High Yield Fund 1.40% 2.10% 0.95%
Bond Income Strategy Fund 1.25% 1.95% 0.80%
Money Market Fund 1.00% 1.70% 0.55%
</TABLE>
Pursuant to the investment management agreement, investment subadvisory
agreement and investment services agreement, neither HIFSCO, Wellington
Management nor HIMCO is liable to the Funds or their shareholders for any error
of judgment or mistake of law or for any loss suffered by the Funds in
connection with the matters to which their respective agreements relate, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of HIFSCO, HIMCO or Wellington Management in the performance of their
duties or from their reckless disregard of the obligations and duties under the
applicable agreement. Wellington Management has agreed to indemnify HIFSCO to
the fullest extent permitted by law against any and all loss, damage, judgment,
fines, amounts paid in settlement and attorneys' fees incurred by HIFSCO to the
extent resulting in whole or in part from any of Wellington Management's acts or
omissions related to the performance of its duties as set forth specifically in
the respective subadvisory investment agreement or otherwise from Wellington
Management's willful misfeasance, bad faith or gross negligence.
HIFSCO, whose business address is 200 Hopmeadow Street, Simsbury
Connecticut 06070, was organized in 1995. As of December 31, 1999, HIFSCO had
approximately $6 billion of assets under management. HIMCO is located at 55
Farmington Avenue, Hartford, Connecticut 06105. As of December 31, 1999, HIMCO
and its wholly-owned subsidiary had approximately $59 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, 1999, Wellington Management had investment management authority
with respect to approximately $235 billion in assets. Wellington Management is a
Massachusetts limited liability partnership. The three managing partners of
Wellington Management are Laurie A. Gabriel, 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
-24-
<PAGE> 141
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 investment subadvisory agreement and investment services
agreement terminate automatically upon the termination of the corresponding
investment advisory agreement.
Each fund and each adviser, sub-adviser and principal underwriter to each
fund has adopted a Code of Ethics designed to protect the interests of each
fund's shareholders. Under each Code of Ethics, investment personnel are
permitted to trade securities for their own account subject to a number of
restrictions. Each Code of Ethics has been filed with the SEC via the EDGAR
system and may be viewed by the public.
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 has been authorized by the Funds to receive purchase and redemption
orders on behalf of the Funds. HIFSCO is authorized to designate other
intermediaries to receive purchase or redemption orders on the Fund's behalf.
In these circumstances the Funds will be deemed to have received a redemption
or purchase order when an authorized broker or, if applicable, a broker's
authorized designee receives the order. Such orders will be priced at the
Funds' net asset value next computed, including any applicable sales charges,
after they are received by the authorized brokers or the broker's authorized
designee and accepted by the Funds.
HIFSCO and its affiliates pay, out of their own assets, compensation to
brokers, financial institutions and other persons for the sale and distribution
of the Company's shares and/or for the servicing of those shares. These payments
("Additional Payments") are in addition to sales commissions reallowed to
dealers. These Additional Payments may take the form of "due diligence" payments
for a broker's examination of the Funds and payments for providing extra
employee training and information relating to the Funds; "listing" fees for the
placement of the Funds on a dealer's list of mutual funds available for purchase
by its customers; "finders" or "referral" fees for directing investors to the
Funds; "marketing support" fees for providing assistance in promoting the sale
of the Funds' shares; and payments for the sale of shares and/or the maintenance
of share balances. In addition, HIFSCO
-25-
<PAGE> 142
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, 1999, HIFSCO or its affiliates paid
$6,615,683 in connection with the above-referenced programs.
The aggregate dollar amount of commissions received by the underwriter for
the sale of shares for the last three fiscal years is as follows:
<TABLE>
<CAPTION>
FRONT-END SALES
YEAR COMMISSIONS CDSC AMOUNT REALLOWED AMOUNT RETAINED
<S> <C> <C> <C> <C>
1999
Class A $44,026,385 $ --- $38,230,590 $5,795,795
Class B --- $4,171,347 --- $4,171,347
Class C $8,492,615 $327,446 $8,492,615 $327,446
Class Y N/A N/A N/A N/A
1998
Class A $29,655,287 $ --- $24,801,860 $4,853,427
Class B --- $1,823,536 --- $1,823,536
Class C $1,167,150 $9,030 $1,167,150 $9,030
Class Y N/A N/A N/A N/A
1997
Class A $18,438,468 $ --- $15,995,514 $2,442,954
Class B --- $90,860 --- $90,860
Class C N/A N/A N/A N/A
Class Y N/A N/A N/A N/A
</TABLE>
Generally commissions are reallowed to broker-dealers as follows:
Global Health, Global Technology, Small Company Fund, Capital Appreciation Fund,
MidCap Fund, International Opportunities Fund, Global Leaders Fund, Stock Fund,
Growth and Income Fund, Dividend and Growth Fund, and Advisers Fund.
<TABLE>
<CAPTION>
FRONT-END SALES FRONT-END SALES
CHARGE AS A CHARGE AS A COMMISSION AS
PERCENTAGE OF PERCENTAGE OF AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but less than $100,000 4.50% 4.71% 4.00%
$100,000 or more but less than $250,000 3.50% 3.63% 3.00%
</TABLE>
-26-
<PAGE> 143
<TABLE>
<CAPTION>
FRONT-END SALES FRONT-END SALES
CHARGE AS A CHARGE AS A COMMISSION AS
PERCENTAGE OF PERCENTAGE OF AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
<S> <C> <C> <C>
$250,000 or more but less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but less than $1 2.00% 2.04% 1.75%
million
$1 million or more 0% 0% 0%
</TABLE>
The Bond Income Strategy Fund and High Yield Fund
<TABLE>
<CAPTION>
FRONT-END SALES FRONT-END SALES
CHARGE AS A CHARGE AS A COMMISSION AS
PERCENTAGE OF PERCENTAGE OF AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 3.75%
$50,000 or more but less than $100,000 4.00% 4.17% 3.50%
$100,000 or more but less than $250,000 3.50% 3.63% 3.00%
$250,000 or more but less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but less than $1 2.00% 2.04% 1.75%
million
$1 million or more 0% 0% 0%
</TABLE>
The Class A shares of the Money Market Fund do not collect an up-front
sales charge.
The distributor may pay up to the entire amount of the sales commission to
particular broker-dealers. The distributor may pay dealers of record commissions
on purchases over $1 million an amount up to the sum of 1.0% of the first $4
million, plus 0.50% of the next $6 million, plus 0.25% of share purchases over
$10 million. In addition, the distributor may provide compensation to dealers of
record for certain shares purchased without a sales charge.
The distributor pays commissions to dealers of up to 4% of the purchase
price of Class B shares purchased through dealers and pays commissions to
dealers of up to 2% of the purchase price of Class C shares purchased through
dealers.
HIFSCO's principal business address is 200 Hopmeadow Street, Simsbury,
Connecticut 06070. HIFSCO was organized as a Delaware Corporation on December 9,
1996 and is an indirect wholly-owned subsidiary of The Hartford.
DISTRIBUTION FINANCING 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
-27-
<PAGE> 144
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 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 review the level of compensation the Plans provide in considering
the continued appropriateness of the Plans.
-28-
<PAGE> 145
The Plans were adopted by a majority vote of the Board of Directors,
including at least a majority of Directors who are not, and were not at the time
they voted, interested persons of the Fund as defined in the 1940 Act and do not
and did not have any direct or indirect financial interest in the operation of
the Plans, cast in person at a meeting called for the purpose of voting on the
Plans. In approving the Plans, the Directors identified and considered a number
of potential benefits which the Plans may provide including the potential to
increase assets in order to benefit from economics of scale. The Board of
Directors believes that there is a reasonable likelihood that the Plans will
benefit each Fund and its current and future shareholders. Under their terms,
the Plans remain in effect from year to year provided such continuance is
approved annually by vote of the Directors in the manner described above. The
Plans may not be amended to increase materially the amount to be spent for
distribution without approval of the shareholders of the Fund affected thereby,
and material amendments to the Plans must also be approved by the Board of
Directors in the manner described above. A Plan may be terminated at any time,
without payment of any penalty, by vote of the majority of the Directors who are
not interested persons of the Fund and have no direct or indirect financial
interest in the operations of the Plan, or by a vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Fund affected
thereby. A Plan will automatically terminate in the event of its assignment (as
defined in the 1940 Act).
For the fiscal year ended December 31, 1999, the funds paid the 12b-1 fees
listed below. The entire amount of these 12b-1 fees were paid to broker-dealers
as compensation.
<TABLE>
<CAPTION>
FUND NAME CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Global Health Fund(1) $ -- $ -- $ --
Global Technology Fund(1) -- -- --
Small Company Fund 162,147 270,207 116,888
Capital Appreciation Fund 1,423,801 3,599,600 592,587
MidCap Fund 155,392 200,598 130,360
International Opportunities Fund 122,652 146,819 49,106
Global Leaders Fund 79,582 67,808 95,685
Stock Fund 1,446,747 3,137,282 1,468,802
Growth and Income Fund 91,578 89,253 119,392
Dividend and Growth Fund 643,493 1,176,527 248,846
Advisers Fund 1,531,601 4,124,087 2,035,829
High Yield Fund 41,605 48,058 60,969
Bond Income Strategy Fund 166,420 206,425 122,735
Money Market Fund 121,181 186,516 50,893
</TABLE>
(1) Fund commenced operation in 2000.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Company has no obligation to deal with any dealer or group of dealers
in the execution of transactions in portfolio securities. Subject to any policy
established by the Board of Directors and HIFSCO, HIMCO and Wellington
Management are primarily responsible for the investment decisions of each Fund
and the placing of its portfolio transactions. In placing orders, it is the
policy of each Fund to obtain the most favorable net results, taking into
account various factors, including price, dealer spread or commission, if any,
size of the transaction and difficulty of execution. While HIMCO and Wellington
Management generally seek reasonably competitive spreads or commissions, the
Funds will not necessarily be paying the lowest possible spread or commission.
Upon instructions from the Funds, HIMCO and Wellington Management may direct
brokerage transactions to broker/dealers who also sell shares of the Funds.
HIMCO and Wellington Management will generally deal directly with the
dealers who make a market in the securities involved (unless better prices and
execution are available elsewhere) if the securities are traded primarily in the
over-the-counter market. Such dealers usually act as principals for their own
account. On occasion, securities may be purchased directly from the issuer.
Bonds and money market securities are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes. Portfolio
securities in the
-29-
<PAGE> 146
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.
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 investment subadvisory agreement. The expenses of HIMCO and
Wellington Management will not necessarily be reduced as a result of the receipt
of such supplemental information. HIMCO and Wellington Management may use such
supplemental research in providing investment advice to portfolios other than
those for which the transactions are made. Similarly, the Funds may benefit from
such research obtained by HIMCO and Wellington Management for portfolio
transactions for other clients.
Investment decisions for the Funds will be made independently from those of
any other clients that may be (or in the future may be) managed by HIMCO,
Wellington Management or their affiliates. If, however, accounts managed by
HIMCO or Wellington Management are simultaneously engaged in the purchase of the
same security, then, pursuant to general authorization of the Company's Board of
Directors, available securities may be allocated to each Fund or other client
account and may be averaged as to price in whatever manner HIMCO or 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).
For the last three years, each Fund has paid the following brokerage
commissions:
<TABLE>
<CAPTION>
FUND NAME 1999 1998 1997
<S> <C> <C> <C>
Global Health Fund(1) -- -- --
Global Technology Fund(1) -- -- --
Small Company Fund $262,944 $258,125 $103,548
Capital Appreciation Fund $3,338,606 $1,918,244 $748,835
MidCap Fund $317,948 $69,953 N/A
International Opportunities Fund $435,577 $323,177 $111,809
Global Leaders Fund $333,147 $8,170(2) N/A
Stock Fund $1,152,055 $438,905 $78,586
Growth and Income Fund $84,557 $9,411(3) N/A
Dividend and Growth Fund $507,956 $384,710 $101,358
Advisers Fund $803,957 $319,625 $95,434
High Yield Fund 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) Fund commenced operation in 2000.
(2) From inception date (September 30, 1998) through December 31, 1998.
(3) From inception date (April 30, 1998) through December 31, 1998.
Although the rules of the National Association of Securities Dealers, Inc.
prohibit its members from seeking orders for the execution of investment company
portfolio transactions on the basis of their sales of investment company shares,
under such rules, sales of investment company shares may be considered in
selecting brokers to effect portfolio transactions. Accordingly, some portfolio
transactions are, subject to such rules and to
-30-
<PAGE> 147
obtaining best prices and executions, effected through dealers who sell shares
of the funds.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of each Fund is determined by Hartford
Life Insurance Company, ("Hartford Life") an affiliate of The Hartford, in the
manner described in the Funds' Prospectus. The Funds will be closed for business
and will not price their shares on the following business holidays: New Year's
Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and other holidays
observed by the New York Stock Exchange. Securities held by each Fund other than
the Money Market Fund will be valued as follows: Debt securities (other than
short-term obligations) are valued on the basis of valuations furnished by an
unaffiliated pricing service which determines valuations for normal
institutional size trading units of debt securities. Short-term securities held
in the Money Market Fund are valued at amortized cost or original cost plus
accrued interest receivable, both of which approximate market value. All other
Funds' short-term debt investments with a maturity of 60 days or less 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
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.
-31-
<PAGE> 148
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 certain annuity or variable life
contracts issued by affiliates of The Hartford. These products currently include
variable annuities and variable life insurance products where at least one
Hartford-sponsored fund (other than a money market fund) is offered and the
following fixed annuities: CRC, Saver, Saver Bonus and Harvester. The insurance
product must be owned by a natural person (not part of a group product). 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 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, National Financial Data Services,
Inc. ("NFDS"), 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 NFDS 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 NFDS
pay such difference in sales charge, NFDS 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 NFDS 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.
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
-32-
<PAGE> 149
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. In addition, the amounts received by a shareholder
cannot be considered as an actual yield or income on his or her investment
because part of such payments may be a return of his or her capital.
The SWP may be terminated at any time (1) by written notice to the Fund or
from the Fund to the shareholder; (2) upon receipt by the Fund of appropriate
evidence of the shareholder's death; or (3) when all shares under the SWP have
been redeemed. The fees of the Fund for maintaining SWPs are paid by the Fund.
Special Redemptions. Although it would not normally do so, each Fund has
the right to pay the redemption price of shares of the Fund in whole or in part
in portfolio securities as prescribed by the Directors. When the shareholder
sells portfolio securities received in this fashion, he would incur a brokerage
charge. Any such securities would be valued for the purposes of making such
payment at the same value as used in determining net asset value. The Funds have
elected to be governed by Rule 18f-1 under the 1940 Act, pursuant to which each
Fund is obligated to redeem shares solely in cash up to the lesser of $250,000
or 1% of the net asset value of the applicable Fund during any 90 day period for
any one account.
DEFERRED SALES CHARGE ON CLASS B AND CLASS C SHARES Investments in Class B
and Class C shares are purchased at net asset value per share without the
imposition of an initial sales charge so that the Fund will receive the full
amount of the purchase payment.
Class B and Class C shares which are redeemed within six years or one year
of purchase, respectively, will be subject to a CDSC at the rates set forth in
the Prospectus as a percentage of the dollar amount subject to the CDSC. The
charge will be assessed on an amount equal to the lesser of the current market
value or the original purchase cost of the Class B or Class C shares being
redeemed. No CDSC will be imposed on increases in account value above the
initial purchase prices, including all shares derived from reinvestment of
dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of Class B shares until the time of
redemption of such shares. Solely for purposes of determining this number of
years from the time of any payment for the purchases of both Class B and Class C
shares, all payments during a month will be aggregated and deemed to have been
made on the first day of the month.
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. To determine whether a CDSC applies, the fund redeems shares in the
following order: (1) shares acquired through reinvestment of dividends and
capital gains distributions, (2) Class B shares held for over 6 years or Class C
shares held over 1 year, (3) effective June 1, 2000, shares representing an
increase over the original purchase cost, and (4) Class B shares held the
longest during the six-year period.
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.
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 in the following cases:
- to make Systematic Withdrawal Plan payments that are limited annually
to no more than 12% of the value of the account at the time the plan
is initiated,
-33-
<PAGE> 150
- because of shareholder death or disability,
- because of the death or disability of the grantor of a living trust,
- under reorganization, liquidation, merger or acquisition transactions
involving other investment companies,
- for retirement plans under the following circumstances:
(1) to return excess contributions,
(2) hardship withdrawals as defined in the plan,
(3) under a Qualified Domestic Relations Order as defined in the
Internal Revenue Code,
(4) to meet minimum distribution requirements under the Internal
Revenue Code,
(5) to make "substantially equal payments" as described in Section
72(t) of the Internal Revenue Code, and
(6) after separation from service.
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, (2) it is not reasonably practicable for a Fund to
fairly determine the value of its assets, or (3) for such other periods as the
Securities and Exchange Commission may permit for the protection of investors.
INVESTMENT PERFORMANCE
MONEY MARKET FUND
In accordance with regulations prescribed by the SEC, the Company is
required to compute the Money Market Fund's current annualized yield for a
seven-day period in a manner which does not take into consideration any realized
or unrealized gains or losses on its portfolio securities. This current
annualized yield is computed by determining the net change (exclusive of
realized gains and losses on the sale of securities and unrealized appreciation
and depreciation) in the value of a hypothetical account having a balance of one
share of the Money Market Fund at the beginning of such seven-day period,
dividing such net change in account value by the value of the account at the
beginning of the period to determine the base period return and annualizing this
quotient on a 365-day basis.
The SEC also permits the Company to disclose the effective yield of the
Money Market Fund for the same seven-day period, determined on a compounded
basis. The effective yield is calculated by compounding the unannualized base
period return by adding one to the base period return, raising the sum to a
power equal to 365 divided by 7, and subtracting one from the result.
For the seven-day period ending December 31, 1999, the Money Market Fund's
annualized yield for Class A, Class B, Class C and Class Y shares was 4.77%,
4.07%, 4.06% and 5.22% respectively. For the same period, the effective yield
for Class A, Class B, Class C and Class Y shares was 4.88%, 4.15%, 4.14% and
5.36% 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, any
defaults by issuers of instruments held by the money market fund and its
operating expenses.
-34-
<PAGE> 151
OTHER FUNDS
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS Average annual total
return quotations for Class A, Class B, Class C and Class Y shares are computed
by finding the average annual compounded rates of return that would cause a
hypothetical investment made on the first day of a designated period to equal
the ending redeemable value of such hypothetical investment on the last day of
the designated period in accordance with the following formula:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of
$1,000, less the maximum sales load
applicable to a Fund
T = average annual total return
n = number of years
ERV = ending redeemable value of the
hypothetical $1,000 initial payment
made at the beginning 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 unless otherwise indicated.
NON-STANDARDIZED PERFORMANCE In addition, in order to more completely
represent a Fund's performance or more accurately compare such performance to
other measures of investment return, a Fund also may include in advertisements,
sales literature and shareholder reports other total return performance data
("Non-Standardized Return"). Non-Standardized Return may be quoted for the same
or different periods as those for which Standardized Return is quoted; it may
consist of an aggregate or average annual percentage rate of return, actual
year-by-year rates or any combination thereof. Non-Standardized Return may or
may not take sales charges into account; performance data calculated without
taking the effect of sales charges into account will be higher than data
including the effect of such charges. All non-standardized performance will be
advertised only if the standard performance data for the same period, as well as
for the required periods, is also presented.
-35-
<PAGE> 152
The charts below set forth certain standardized and non-standardized
performance information as of December 31, 1999 for the Class A, Class B, Class
C and Class Y shares of each Fund. Past performance is no guarantee and is not
necessarily indicative of future performance of the shares. The actual annual
returns for the shares may vary significantly from the past and future
performance. Investment returns and the value of the shares will fluctuate in
response to market and economic conditions as well as other factors and shares,
when redeemed, may be worth more or less than their original cost. Total returns
are based on capital changes plus reinvestment of all distributions for the time
periods noted in the charts below. Total return of the shares would have been
lower without the expense limitation effected by HIFSCO. Returns shown that
include sales charges reflect the maximum sales charges and are standardized
average annual quotations, returns which do not include sales charges are
non-standardized returns.
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 65.66% 56.55% 30.34% 28.22%
Class B Shares 64.46% 59.46% 29.46% 29.00%
Class C Shares 64.58% 61.93% 29.52% 29.14%
Class Y Shares 66.37% N/A 30.94% 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 66.76% 57.59% 45.97% 43.60%
Class B Shares 65.58% 60.58% 44.99% 44.64%
Class C Shares 65.44% 62.79% 44.98% 44.56%
Class Y Shares 67.49% N/A 46.64% 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 50.17% 41.91% 35.85% 32.07%
Class B Shares 49.10% 44.10% 34.93% 33.81%
Class C Shares 49.22% 46.73% 34.97% 34.29%
Class Y Shares 50.87% N/A 36.44% N/A
</TABLE>
-36-
<PAGE> 153
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, 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 39.13% 31.48% 16.80% 14.90%
Class B Shares 38.11% 33.11% 16.01% 15.40%
Class C Shares 37.98% 35.60% 16.00% 15.66%
Class Y Shares 39.63% N/A 17.33% N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the 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 47.68% 39.56% 68.74% 61.28%
Class B Shares 46.64% 41.64% 67.59% 64.78%
Class C Shares 46.64% 44.17% 67.59% 65.54%
Class Y Shares 48.39% N/A 69.60% 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 22.31% 15.58% 29.65% 27.53%
Class B Shares 21.46% 16.46% 28.74% 28.27%
Class C Shares 21.40% 19.19% 28.70% 28.33%
Class Y Shares 22.91% N/A 30.21% N/A
</TABLE>
-37-
<PAGE> 154
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 20.80% 14.16% 21.60% 17.55%
Class B Shares 20.00% 15.00% 20.75% 18.63%
Class C Shares 19.98% 17.78% 20.78% 20.06%
Class Y Shares 21.45% N/A 22.24% 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 4.57% -1.18% 18.76% 16.83%
Class B Shares 3.82% -1.18% 17.91% 17.33%
Class C Shares 3.76% 1.72% 17.92% 17.58%
Class Y Shares 5.10% N/A 19.27% 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 12.08% 5.92% 19.87% 17.92%
Class B Shares 11.29% 6.29% 19.06% 18.49%
Class C Shares 11.29% 9.18% 19.03% 18.69%
Class Y Shares 12.62% N/A 20.43% N/A
</TABLE>
-38-
<PAGE> 155
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 3.47% -1.19% 5.49% 1.68%
Class B Shares 2.80% -2.21% 4.73% 1.56%
Class C Shares 2.81% 0.78% 4.75% 3.12%
Class Y Shares 3.98% N/A 6.05% 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 -2.71% -7.09% 6.07% 4.66%
Class B Shares -3.30% -8.30% 5.33% 4.55%
Class C Shares -3.36% -5.33% 5.31% 5.01%
Class Y Shares -2.31% N/A 6.54% 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 4.32% 4.32% 4.58% 4.58%
Class B Shares 3.59% -1.41% 3.83% 2.20%
Class C Shares 3.59% 1.55% 3.82% 3.38%
Class Y Shares 4.80% N/A 5.10% N/A
</TABLE>
Such information for the Global Health Fund and Global Technology Fund is
not shown because each fund commenced operation in 2000.
Each Fund may also publish its distribution rate and/or its effective
distribution rate. A Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized, by the current net asset value
per share. A Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the most recent monthly
distribution and reinvesting the resulting amount for a full year on the basis
of such ratio. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
A Fund's yield is calculated using a standardized formula, the income component
of which is computed from the yields to maturity of all debt obligations held by
the Fund based on prescribed methods (with all purchases and sales of securities
during such period included in the income calculation on a settlement date
basis), whereas the distribution rate is based on a Fund's last monthly
distribution. A Fund's monthly distribution
-39-
<PAGE> 156
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)(6) - 1]
Where:
a = net investment income earned during
the period attributable to the subject
class
b = net expenses accrued for the period
attributable to the subject class
c = the average daily number of shares of
the subject class outstanding during
the period that were entitled to
receive dividends
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, 1999, the Bond Income Strategy
Fund's 30-day yield for Class A, Class B, Class C and Class Y was 5.7%, 5.3%,
5.2% and 6.4% respectively. For that same period, the 30-day yield for the Class
A, Class B, Class C and Class Y shares of the High Yield Fund was 8.5%, 8.1%,
7.9% and 9.4% respectively.
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.
-40-
<PAGE> 157
The Lehman Government Bond Index is a measure of the market value of all
public obligations of the U.S. Treasury; all publicly issued debt of all
agencies of the U.S. Government and all quasi-federal corporations; and all
corporate debt guaranteed by the U.S. Government. Mortgage backed securities,
bonds and foreign targeted issues are not included in the Lehman Government
Index.
The Lehman Government/Corporate Bond Index is a measure of the market value
of approximately 5,300 bonds with a face value currently in excess of $1.3
trillion. To be included in the Lehman Government/Corporate Index, an issue must
have amounts outstanding in excess of $1 million, have at least one year to
maturity and be rated "Baa" or higher ("investment grade") by a nationally
recognized rating agency.
The Russell 2000 Index represents the bottom two thirds of the largest 3000
publicly traded companies domiciled in the U.S. Russell uses total market
capitalization to sort its universe to determine the companies that are included
in the Index. Only common stocks are included in the Index. REITs are eligible
for inclusion.
The Russell 2500 Index is a market value-weighted, unmanaged index showing
total return (i.e., principal changes with income) in the aggregate market value
of 2,500 stocks of publicly traded companies domiciled in the United States. The
Index includes stocks traded on the New York Stock Exchange and the American
Stock Exchange as well as in the over-the-counter market.
The Morgan Stanley Capital International EAFE Index (the "EAFE Index") is
an unmanaged index, which includes over 1,000 companies representing the stock
markets of Europe, Australia, New Zealand and the Far East. The EAFE Index is
typically shown weighted by the market capitalization. However, EAFE is also
available weighted by Gross Domestic Product (GDP). These weights are modified
on July 1st of each year to reflect the prior year's 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.
The Goldman Sachs Healthcare Index is a modified capitalization weighted
index of selected companies covering a broad range of healthcare and related
businesses. Individual holdings are capped at 7.5% at each semi -annual
reconstitution date and must be listed on the New York Stock Exchange, American
Stock Exchange or National Association of Securities Dealers Automated Quotation
(NASDAQ) System. As of December 31, 1999 there were 87 names in the Index.
The Goldman Sachs Technology Index is a modified capitalization weighted
index of selected companies covering the entire spectrum of the technology
industry. Individual holdings are capped at 8.5% at each semi-annual
reconstitution date and must be listed on the New York Stock Exchange, American
Stock Exchange or National Association of Securities Dealers Automated Quotation
(NASDAQ) System. As of December 31, 1999 there were 159 names in the Index.
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,
-41-
<PAGE> 158
economic and market statistics developed by brokers, dealers and other persons
may be used to illustrate aspects of the Fund's performance; (5) the effect of
tax-deferred compounding on the Fund's investment returns, or on returns in
general, may be illustrated by graphs, charts, etc. where such graphs or charts
would compare, at various points in time, the return from an investment in the
Fund (or returns in general) on a tax-deferred basis (assuming reinvestment of
capital gains and dividends and assuming one or more tax rates) with the return
on a taxable basis; and (6) the sectors or industries in which the Fund invests
may be compared to relevant indices or surveys (e.g., S&P Industry Surveys) in
order to evaluate the Fund's historical performance or current or potential
value with respect to the particular industry or sector.
Each Fund's investment performance may be advertised in various financial
publications, newspapers, magazines including the following:
Across the Board
Advertising Age
Adviser's Magazine
Adweek
Agent
American Banker
American Agent and Broker
Associated Press
Barron's
Best's Review
Bloomberg
Broker World
Business Week
Business Wire
Business News Features
Business Month
Business Marketing
Business Daily
Business Insurance
California Broker
Changing Times
Consumer Reports
Consumer Digest
Crain's
Dow Jones News Service
Economist
Entrepreneur
Entrepreneurial Woman
Financial Services Week
Financial World
Financial Planning
Financial Times
Forbes
Fortune
Hartford Courant
Inc
Independent Business
Institutional Investor
Insurance Forum
Insurance Advocate Independent
Insurance Review Investor's
Insurance Times
Insurance Week
Insurance Product News
Insurance Sales
Investment Dealers Digest
Investment Advisor
Journal of Commerce
Journal of Accountancy
Journal of the American Society of CLU & ChFC
Kiplinger's Personal Finance
Knight-Ridder
Life Association News
Life Insurance Selling
Life Times
LIMRA's MarketFacts
Lipper Analytical Services, Inc.
MarketFacts
Medical Economics
Money
Morningstar, Inc.
Nation's Business
National Underwriter
New Choices (formerly 50 Plus)
New England Business
New York Times
Pension World
Pensions & Investments
Professional Insurance Agents
Professional Agent
Registered Representative
Reuter's
Rough Notes
Round the Table
Service
Success
The Standard
The Boston Globe
The Washington Post
Tillinghast
Time
U.S. News & World Report
U.S. Banker
United Press International
USA Today
Value Line
Wall Street Journal
Wiesenberger Investment
Working Woman
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.
The Funds' annual and semi-annual reports also contain additional
performance information. These reports are distributed to all current
shareholders and will be made available to potential investors upon request and
without charge.
TAXES
Each Fund is treated as a separate entity for accounting and tax purposes.
Each Fund has qualified and elected or intends to qualify and elect to be
treated as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and intends to continue to so
qualify in the future. As such and by complying with the applicable provisions
of the Code regarding the sources of its income, the timing of its
distributions, and the diversification of its assets, each Fund will not be
subject to federal income tax on taxable
-42-
<PAGE> 159
<PAGE> 160
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 could, under future Treasury
regulations, produce income not among the types of "qualifying income" from
which the Fund must derive at least 90% of its annual gross income.
Some Funds may be subject to withholding and other taxes imposed by foreign
countries with respect to their investments in foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. If qualified, a fund may elect to pass through such foreign taxes and any
associated tax deductions or credits to their shareholders, who therefore
generally will report such amounts on their own tax returns.
For federal income tax purposes, each Fund is permitted to carry forward a
net capital loss in any year to offset its own capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the applicable Fund and would not be distributed as such to
shareholders.
Each Fund that invests in certain PIKs, zero coupon securities or certain
deferred interest securities (and, in general, any other securities with
original issue discount or with market discount if the Fund elects to include
market discount in income currently) must accrue income on such investments
prior to the receipt of the corresponding cash payments. However, each Fund 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
-43-
<PAGE> 161
to preserve its status as a regulated investment company and seek to avoid
becoming subject to federal income or excise tax.
Limitations imposed by the Code on regulated investment companies like the
Funds may restrict a Fund's ability to enter into futures, options, and forward
transactions.
Certain options, futures and forward foreign currency transactions
undertaken by a Fund may cause the Fund to recognize gains or losses from
marking to market even though its positions have not been sold or terminated and
affect the character as long-term or short-term (or, in the case of certain
currency forwards, options and futures, as ordinary income or loss) and timing
of some capital gains and losses realized by the Fund. Also, certain of a Fund's
losses on its transactions involving options, futures or forward contracts
and/or offsetting portfolio positions may be deferred rather than being taken
into account currently in calculating the Fund's taxable income. Certain of the
applicable tax rules may be modified if a Fund is eligible and chooses to make
one or more of certain tax elections that may be available. These transactions
may therefore affect the amount, timing and character of a Fund's distributions
to shareholders. The Funds will take into account the special tax rules
(including consideration of available elections) applicable to options, futures
or forward contracts in order to minimize any potential adverse tax
consequences.
The federal income tax rules applicable to interest rate swaps, caps and
floors are unclear in certain respects, and a Fund may be required to account
for these transactions in a manner that, in certain circumstances, may limit the
degree to which it may utilize these transactions.
A Fund may recognize gain with respect to appreciated stock, debt, and
partnership interests upon entering into short sales, offsetting notional
principal contracts, futures, forwards, and options with respect to the same or
substantially identical property.
Distributions from a Fund's current or accumulated earnings and profits
("E&P"), as computed for federal income tax purposes, will be taxable as
described in the Funds' prospectus 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
-44-
<PAGE> 162
extent of any amounts treated as distributions of long-term capital gain with
respect to such shares.
For purposes of the dividends received deduction available to corporations,
dividends received by a Fund, if any, from U.S. domestic corporations in respect
of the stock of such corporations held by the Fund, for federal income tax
purposes, for at least 46 days during the 90-day period that begins 45 days
before the stock becomes ex-dividend and distributed and designated by the Fund
may be treated as qualifying dividends. The holding period for dividends on
preferred stock is 91 days during the 180-day period that begins 90 days before
the stock becomes ex-dividend. Corporate shareholders must meet the minimum
holding period requirement stated above (46 or 91 days) with respect to their
shares of the applicable Fund in order to qualify for the deduction and, if they
borrow to acquire such shares, may be denied a portion of the dividends received
deduction. The entire qualifying dividend, including the otherwise deductible
amount, will be included in determining the excess (if any) of a corporate
shareholder's adjusted current earnings over its alternative minimum taxable
income, which may increase its alternative minimum tax liability. Additionally,
any corporate shareholder should consult its tax adviser regarding the
possibility that its basis in its shares may be reduced, for federal income tax
purposes, by reason of "extraordinary dividends" received with respect to the
shares, for the purpose of computing its gain or loss on redemption or other
disposition of the shares.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions and certain prohibited transactions, is accorded to shareholder
accounts maintained as qualified retirement plans. Shareholders should consult
their tax advisers for more information.
The foregoing discussion relates solely to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts or estates) subject to tax under such law.
The discussion does not address special tax rules applicable to certain classes
of investors, such as tax-exempt entities, insurance companies, and financial
institutions. Dividends, capital gain distributions, and ownership of or gains
realized on the redemption (including an exchange) of the shares of a Fund may
also be subject to state and local taxes. Shareholders should consult their own
tax advisers as to the federal, state or local tax consequences of ownership of
shares of, and receipt of distributions from, the Funds in their particular
circumstances.
Non-U.S. investors not engaged in a U.S. trade or business with which their
investment in a Fund is effectively connected will be subject to U.S. Federal
income tax treatment that is different from that described above. These
investors may be subject to non-resident alien withholding tax at the rate of
30% (or a lower rate under an applicable tax treaty) on amounts treated as
ordinary dividends from a Fund and, unless an effective IRS Form W-8 or
authorized substitute is on file, to 31% backup withholding on certain other
payments from the Fund. Non-U.S. investors should consult their tax advisers
regarding such treatment and the application of foreign taxes to an investment
in any Fund.
STATE AND LOCAL Each Fund may be subject to state or local taxes in
jurisdictions in which such Fund may be deemed to be doing business. In
addition, in those states or localities which have income tax laws, the
treatment of such Fund and its shareholders under such laws may differ from
their treatment under federal income tax laws, and investment in such Fund may
have different tax consequences for shareholders than would direct investment in
such Fund's portfolio securities. Shareholders should consult their own tax
advisers concerning these matters.
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.
-45-
<PAGE> 163
TRANSFER AGENT SERVICES
National Financial Data Services, Inc., 330 W. 9th Street, Kansas City, MO
64105, is the transfer agent for each Fund.
INDEPENDENT PUBLIC ACCOUNTANTS
The audited financial statements and financial highlights have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said report. The
principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
OTHER INFORMATION
The Hartford has granted the Company the right to use the name, "The
Hartford" or "Hartford", and has reserved the right to withdraw its consent to
the use of such name by the Company and the Funds at any time, or to grant the
use of such name to any other company.
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
The financial statements and financial highlights of the Company as of and
for the year ended December 31, 1999, together with the notes thereto and report
of Arthur Andersen LLP, independent public accountants, contained in the
Company's annual report as filed with the Securities and Exchange Commission are
incorporated by reference into this Statement of Additional Information.
-46-
<PAGE> 164
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.
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.
<PAGE> 165
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.
- 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.
<PAGE> 166
- 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".
- 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> 167
PART C
OTHER INFORMATION
<TABLE>
<CAPTION>
Item 23. Exhibits
- -------- --------
<S> <C>
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)
</TABLE>
- -------------------
(1) Filed with Registrant's Initial Registration Statement on April 9, 1996.
(2) Filed with Registrant's Pre-Effective Amendment #1 on June 27, 1996.
(3) Filed with Registrant's Post-Effective Amendment #3 on June 20, 1997.
(4) Filed with Registrant's Post-Effective Amendment #4 on October 16, 1997.
(5) Filed with Registrant's Post-Effective Amendment #5 on February 6, 1998.
(6) Filed with Registrant's Post-Effective Amendment #6 on April 24, 1998.
(7) Filed with Registrant's Post-Effective Amendment #7 on May 13, 1998.
(8) Filed with Registrant's Post-Effective Amendment #9 on July 15, 1998.
(9) Incorporated by reference to Registrant's filing pursuant to Rule 30d-1 of
the Investment Company Act of 1940.
(10) Incorporated by reference to Registrant's NSAR-B filed on February 28,
2000.
(11) Filed with Registrant's Post-Effective Amendment #12 on April 26, 1999.
(12) Filed with Registrant's Post-Effective Amendment #13 on February 2, 2000.
<PAGE> 168
<TABLE>
<S> <C>
d.(xii) Form of Amendment Number 3 to Sub-Advisory Agreement
between Hartford Investment Financial Services
Company and Wellington Management Company LLP(8)
d.(xiii) Form of Amendment Number 4 to Investment Management
Agreement(12)
d.(xiv) Form of Amendment Number 4 to Sub-Advisory Agreement
between Hartford Investment Financial Services
Company and Wellington Management Company LLP(12)
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)
e.(vi) Form of Amendment Number 4 to Principal Underwriting
Agreement(12)
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)
g.(v) Form of Amendment Number 4 to Custodian Agreement(12)
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)
h.(vi) Form of Amendment Number 5 to Transfer Agency and Service
Agreement(12)
i. Opinion and Consent of Counsel
j. Consent of Independent Public Accountants
k. 1999 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)
</TABLE>
<PAGE> 169
<TABLE>
<S> <C>
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)
m.(xi) Form of Amendment Number 3 to Amended and Restated Rule
12b-1 Distribution Plan for Class A Shares(12)
m.(xii) Form of Amendment Number 3 to Amended and Restated Rule
12b-1 Distribution Plan for Class B Shares(12)
m.(xiii) Form of Amendment Number 2 to Rule 12b-1 Distribution Plan
for Class C Shares(12)
n. Not Applicable
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)
o.(vi) Form of Amendment Number 2 to Amended and Restated Rule
18f-3 Plan which added Class C Shares(12)
p.(i) Code of Ethics of HL Investment Advisors LLC and Hartford
Investment Management Company
p.(ii) Code of Ethics of Hartford Securities Distribution Company
p.(iii) Code of Ethics of Wellington Management Company LLP
q. Power of Attorney
</TABLE>
<PAGE> 170
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 and President and Chief Executive
Chief Executive Officer Officer of Hartford Life, Inc.
("H.L. Inc.")(1)
Thomas M. Marra Executive Vice Chief Operating Officer of
President-Sales and H.L. Inc.
Distribution
David Znamierowski Senior Vice President- Chief Investment Officer of
Investments H.L. Inc.
Peter W. Cummins Senior Vice President- Senior Vice President of
Sales and Distribution H.L. Inc.
Andrew W. Kohnke Senior Vice President- Managing Director of Hartford
Investments Investment Management Company
("HIMCO")(2)
Lynda Godkin Senior Vice President, General Counsel of H.L. Inc.
Secretary and General
Counsel
David Foy Senior Vice President Chief Financial Officer of
and Treasurer H.L. Inc.
George R. Jay Controller Assistant Vice President of
H.L. Inc.
David N. Levenson Vice President Vice President of H.L. Inc.
David A. Carlson Vice President and Vice President and Director of
Director of Taxes Taxes of H.L. Inc.
Mark E. Hunt Vice President Vice President of Hartford Life
Insurance Company ("HLIC")(3)
</TABLE>
(1) The principal business address for H.L. Inc. is 200 Hopmeadow Street,
Simsbury, CT 06089.
<PAGE> 171
(2) The principal business address for HIMCO is 55 Farmington Avenue,
Hartford, CT 06105.
(3) The principal business address for The Hartford is Hartford Plaza,
Hartford, CT 06115.
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 set forth below:
<TABLE>
<CAPTION>
Name and Principal Position and Offices
Business Address* Positions and Offices with Underwriter with Registrant
----------------- -------------------------------------- ---------------
<S> <C> <C>
Lowndes A. Smith President and Chief Executive Officer Chairman of the Board
Thomas M. Marra Executive Vice President-Sales and Vice President
Distribution
David Znamierowski Senior Vice President-Investments President
Peter W. Cummins Senior Vice President-Sales and Vice President
Distribution
Andrew W. Kohnke Senior Vice President-Investments Vice President
Lynda Godkin Senior Vice President, Secretary and None
General Counsel
David Foy Senior Vice President-Treasurer None
George R. Jay Controller Treasurer and Controller
David N. Levenson Vice President None
David A. Carlson Vice President and Director of Taxes None
Mark E. Hunt Vice President None
</TABLE>
*Principal business address is 200 Hopmeadow Street, Simsbury, CT 06089
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, National Financial Data Services, 330 West 9th Street, Kansas
City, MO 64105. 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.
<PAGE> 172
Item 29. Management Services
Not Applicable
Item 30. Undertakings
Not Applicable
<PAGE> 173
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on the 19th day of
April, 2000.
THE HARTFORD MUTUAL FUNDS, INC.
By: *
---------------------------------
David M. Znamierowski
Its: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
* President April 19, 2000
- ------------------------ (Chief Executive Officer
David M. Znamierowski & Director)
* Controller & Treasurer April 19, 2000
- ------------------------ (Chief Accounting Officer &
George R. Jay Chief Financial Officer)
* Director April 19, 2000
- ------------------------
Robert J. Clark
* Director April 19, 2000
- ------------------------
Winifred E. Coleman
* Director April 19, 2000
- ------------------------
William A. O'Neill
</TABLE>
<PAGE> 174
<TABLE>
<S> <C> <C>
* Director April 19, 2000
- ------------------------
Millard H. Pryor, Jr.
* Director April 19, 2000
- ------------------------
Lowndes A. Smith
* Director April 19, 2000
- ------------------------
John K. Springer
/s/ Kevin J. Carr April 19, 2000
- ------------------------
* By Kevin J. Carr
Attorney-in-fact
</TABLE>
<PAGE> 175
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
i. Opinion and Consent of Counsel
j. Consent of Independent Public Accountants
p.(i) Code of Ethics of HL Investment Advisors LLC and Hartford
Investment Management Company
p.(ii) Code of Ethics of Hartford Securities Distribution Company
p.(iii) Code of Ethics of Wellington Management Company LLP
q. Power of Attorney
</TABLE>
<PAGE> 1
EXHIBIT i.
Opinion and Consent of Counsel
The Hartford Financial Services Group, Inc.
Hartford Plaza
Hartford, CT 06115
April 21, 2000
The Hartford Mutual Funds, Inc.
Hartford Plaza
Hartford, CT 06115
Gentlemen:
I have examined the Articles of Incorporation of The Hartford Mutual Funds, Inc.
(hereafter referred to as "Fund"); the By-Laws of the Fund; documents evidencing
various pertinent corporate proceedings; and such other things considered to be
material to determine the legality of the sale of the authorized but unissued
shares of the Fund's stock. Based upon my examination, it is my opinion that the
Fund is a validly organized and existing corporation of the State of Maryland
and it is legally authorized to issue its shares of common stock, at prices
determined as described in the Fund's currently effective Prospectus, when such
shares are properly registered under all applicable federal and state securities
laws.
Based upon the foregoing, it is my opinion that the Fund's shares were, when
issued for cash consideration as described in the Fund's currently effective
prospectus, validly issued, fully paid and nonassessable stock of the Fund.
I hereby consent to the inclusion of this Opinion as an Exhibit to the Fund's
Post-Effective Amendment to its Registration Statement.
Very truly yours,
/s/ Kevin J. Carr
Kevin J. Carr
Assistant General Counsel
<PAGE> 1
EXHIBIT j.
Consent of Independent Public Accountants
<PAGE> 2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
Registration Statement File No. 333-02381 for The Hartford Mutual Funds, Inc.
(consisting of The Hartford Money Market, The Hartford Bond Income Strategy, The
Hartford Advisers, The Hartford Dividend and Growth, The Hartford Stock, The
Hartford Capital Appreciation, The Hartford Small Company, The Hartford
International Opportunities, The Hartford Global Leaders, The Hartford High
Yield, The Hartford MidCap and The Hartford Growth and Income Funds) on Form
N-1A.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 21, 2000
<PAGE> 1
EXHIBIT p.(i)
Code of Ethics of Hartford Investment Financial Services Company and
Hartford Investment Management Company
<PAGE> 2
HL INVESTMENT ADVISORS, LLC
HARTFORD INVESTMENT FINANCIAL SERVICES COMPANY
HARTFORD INVESTMENT SERVICES, INC.
HARTFORD INVESTMENT MANAGEMENT COMPANY
(EACH AN "ADVISER" OR COLLECTIVELY, THE "ADVISERS")
THE HARTFORD-SPONSORED MUTUAL FUNDS
CODE OF ETHICS
Section 1 - Introduction
In accordance with Federal securities laws the Hartford-sponsored mutual funds
and each Hartford affiliated registered investment adviser must adopt and
administer a code of ethics (the "Code"). The adoption and administration of the
Code is predicated upon the following principles: (1) at all times the interests
of investment company shareholders and advisory account clients should be placed
first; (2) all personal securities transactions should be conducted consistent
with the Code and in such a manner as to avoid any actual or potential conflict
of interest or any abuse of an individual's position of trust and
responsibility; and (3) investment personnel should not take inappropriate
advantage of their positions.
Section 2 - Definitions
(a) "Access Person" means any director, officer, general partner or Advisory
Person of the Hartford-sponsored mutual funds or of an Adviser.
(b) "Account" means any registered investment company or advisory account for
which an Adviser is the investment adviser or sub-adviser.
(c) "Advisory Person" means (i) any employee of an Adviser (or of any company in
a control relationship to the Adviser), who, in connection with his or her
regular functions or duties, makes, participates in, or obtains information
regarding the purchase or sale of a Covered Security by any Account, or whose
functions relate to the making of any recommendations with respect to such
purchases or sales; and (ii) any natural person in a control relationship to any
Account or Adviser who obtains information concerning recommendations made to
the Account with regard to the purchase or sale of a Covered Security.
(d) "Being Considered for Purchase or Sale" as to a Covered Security means when
a recommendation to purchase or sell such Covered Security has been made and
communicated.
<PAGE> 3
(e) "Covered Security" means any interest or instrument commonly known as a
security, except that it shall not include securities issued by the government
of the United States, bankers' acceptances, bank certificates of deposit,
commercial paper, high quality short-term instruments and shares of registered
open-end investment companies.
(f) "Disinterested Director" means a Director of the Hartford-sponsored mutual
funds who is not an "interested person" of the those funds within the meaning of
Section 2(a)(19) of the Investment Company Act.
(g) "Investment Personnel" means Portfolio Managers, analysts and traders of the
Advisers who take part in the process of making decisions about Account
investments.
(h) "Portfolio Managers" means personnel of the Advisers who make decisions
about Account investments.
(i) "Purchase or Sale of a Covered Security" includes, among other things, the
writing of an option to purchase or sell a Covered Security.
Section 3 - Prohibition on Certain Purchases and Sales of Securities and
Related Requirements
(a) Trading Restriction on Access Persons - No Access Person shall purchase or
sell, directly or indirectly, any Covered Security in which he or she has, or by
reason of such transaction acquires, any direct or indirect beneficial ownership
and which to his or her actual knowledge at the time of such purchase or sale:
(1) Is being considered for purchase or sale by any Account; or
(2) Is being purchased or sold by any Account.
(b) Trading Restriction on Portfolio Managers - Portfolio Managers may not buy
or sell a Covered Security within the seven calendar day period before or after
an Account that he or she manages, buys or sells that Covered Security. Any
profits realized on such trades will be disgorged as determined by the
compliance officer.
(c) IPOs - Investment Personnel may not acquire any equity security in an
initial public offering.
(d) Private Placements - Investment Personnel may not acquire any security in a
private placement without express prior approval by the compliance officer of
the Advisers. If, after the purchase, the purchasing party may play a part in
the Account's subsequent consideration of an investment in the issuer, the
Investment Personnel must make a disclosure to the compliance officer of the
Advisers of this conflicting interest. If a decision is made to purchase such a
security for the Account, an independent review of
2
<PAGE> 4
the investment decision will be made by Investment Personnel with no personal
interest in the issuer.
(e) Short-term Trades - Investment Personnel may not profit in the purchase and
sale, or sale and purchase of the same (or equivalent) Covered Securities within
30 calendar days without a written exemption from the compliance officer. Any
profits realized in such short-term trades will be disgorged as determined by
the compliance officer.
(f) Gifts - Investment Personnel may not accept gifts or other items of more
than de minimis value from any person or entity that does business with or on
behalf of any Account.
(g) Service on Boards of Directors - Investment Personnel may not serve on the
Boards of Directors of publicly held companies without prior approval by the
compliance officer of the Advisers.
Section 4 - Exempted Transactions
The trading restrictions of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any personal investment account over which
the Access Person has no direct influence or control. (An Access Person is
presumed to have direct influence or control over the account of a spouse, minor
child or other dependent relatives.);
(b) Purchases or sales of securities or the purchase, sale or exercise of
options related to securities which are not eligible for purchase or sale by any
Account such as securities of The Hartford Financial Services Group, Inc. and
Hartford Life, Inc.;
(c) Purchases or sales which are non-volitional on the part of either the Access
Person or an Account;
(d) Purchases which are part of any automatic dividend reinvestment plan or
stock purchase plan;
(e) Purchases effected upon the exercise of rights issued by an issuer pro-rata
to all holders of a class of its securities, to the extent such rights were
acquired from such issuer, and sales of such rights so acquired; and
(f) Purchases and sales of U.S. or foreign government securities, bankers'
acceptances, bank certificates of deposit, commercial paper, high quality
short-term instruments, shares of open-end mutual funds, securities with a
market capitalization of at least $5 billion and any exchange traded securities
designed to replicate specific indices, or sub-components of an index, such as
SPDRS, Diamonds, Midcap SPDRS and WEBS.
3
<PAGE> 5
Section 5 - Compliance Procedures
(a) Initial and Annual Holdings Report - Within ten days of becoming an Access
Person and not later than January 31st thereafter, each Access Person must
submit a report to the compliance officer with the information listed below.
(1) The title, number of shares and principal amount of all Covered
Securities owned by the Access Person.
(2) The name of any broker, dealer or bank with whom the Access Person
maintains an account.
(3) The date the report is submitted.
The report should contain information that is no more than 30 days old.
(b) Quarterly Reporting - Every Access Person shall, within ten days of the end
of each calendar quarter, report to the compliance officer, with respect to
transactions in any Covered Security in which such Access Person has, or by
reason of such transaction acquires, any direct or indirect beneficial ownership
in the Covered Security, the information listed below.
(1) The date of the transaction, the title and the number of shares, and
the principal amount of each Covered Security involved.
(2) The nature of the transaction (i.e. purchase, sale or any other type
of acquisition or disposition).
(3) The price at which the transaction was effected.
(4) The name of the broker, dealer or bank with or through whom the
transaction was effected.
(5) If the Access Person has established a brokerage account during the
quarterly period, the name of the broker, dealer or bank and the date the
account was established.
(6) The date the report is submitted.
(c) Review of Reports - The compliance officer or a designee shall be
responsible for reviewing all reports referenced above on at least a quarterly
basis.
(d) Confirmations - All Access Persons must direct their brokers to send
duplicate copies of confirmations for all Covered Security transactions to the
compliance officer.
4
<PAGE> 6
(e) Pre-Clearance - All Access Persons must preclear with the compliance officer
of the Advisers trades in all Covered Securities except equities with the
exception of private placement personnel of HIMCO which must preclear all
Covered Security transactions.
(f) Annual Certification - All Access Persons must certify annually that they
have read and understand the Code and have complied with its requirements.
(g) Report to Board - On an annual basis management of the Hartford-sponsored
mutual funds and each Adviser which provides services to those funds must submit
to the Boards of Directors of those funds a written report which:
(1) Describes any issues arising under the Code or procedures since the
last report to the Board of Directors, including, but not limited to,
information about material violations of the Code or procedures and
sanctions imposed in response to the material violations; and
(2) Certifies that the funds and each Adviser have adopted procedures
reasonably necessary to prevent Access Persons from violating the Code.
(h) A Disinterested Director of the Hartford-sponsored mutual funds shall not be
subject to the foregoing except where such Disinterested Director knew, or in
the ordinary course of fulfilling his official duties as a director, should have
known that during the 15-day period immediately preceding or after the date of
the transaction in a security by the director such security was purchased or
sold by the fund or such purchase or sale is or was considered by the fund or
its investment adviser.
(i) The reporting requirements above shall not apply to transactions effected
for, and Covered Securities held in, any account over which the person has no
direct or indirect influence or control (e.g. blind trusts, employee stock
purchase plans or option grants).
Section 6 - Sanctions
Upon discovering a violation of this Code, the Advisers' Board of Directors may
impose such sanctions as it deems appropriate, including, among other things, a
letter of sanction, suspension or termination of the employment of the violator.
All material violations of this Code and any sanctions imposed with respect
thereto shall be reported periodically to the appropriate entity's Board of
Directors.
Section 7 - Exemptive Procedure
The compliance officer of the appropriate Adviser may grant exemptions from the
requirements in this Code in appropriate circumstances. In addition, violations
of the provisions regarding personal trading will presumptively be subject to
being reversed in the case of a violative purchase, and to disgorgement of any
profit realized from the position by payment of the profit to any client
disadvantaged by the transaction, or to a
5
<PAGE> 7
charitable organization, as determined by the appropriate Adviser, unless the
violator establishes to the satisfaction of the Adviser that under the
particular circumstances disgorgement would be an unreasonable remedy for the
violation.
Approved by the Funds: April 25, 2000
6
<PAGE> 1
HARTFORD SECURITIES DISTRIBUTION COMPANY
CODE OF ETHICS
SECTION 1 - PREAMBLE
The Securities and Exchange Commission (SEC) has adopted Rule 17j-1 which in
effect requires that every investment company registered with the SEC, its
investment adviser and its principal underwriter adopt a code of ethics
prohibiting persons with access to information concerning the trading of such
registered investment company from engaging in parallel trading for their own
account. Such code of ethics must contain provisions reasonably necessary to
prevent "access person" (as defined herein) from:
(a) Employing any scheme or artifice to defraud such registered
investment Company;
(b) Making to such registered investment company any untrue statement of
a material fact or omitting to state to such registered investment
company a material fact necessary in order to make statement made,
in light of the circumstances under which they are made, not
misleading;
(c) Engaging in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon any such registered
investment company; and
(d) Engaging in any manipulative practice with respect to such
registered investment company.
SECTION 2 - DEFINITIONS
1. "FUND OR SEPARATE ACCOUNT" means any registered investment company of which
Hartford Securities Distribution Company (HSD) is the principal underwriter.
2. "ACCESS PERSON" means any director, officer or employee or registered
representative of HSD or any company in a control relationship to HSD, who, in
connection with his regular functions or duties, makes, participates in or
obtains information regarding the purchase or sale of a security by the Fund or
Separate Account, or whose functions relate to the making of any recommendations
with respect to such purchase or sale.
3. "BEING CONSIDERED FOR PURCHASE OR SALE" as to a Security means when a
recommendation to purchase or sell such Security has been made and communicated.
4. "BENEFICIAL OWNERSHIP" shall be interpreted in the same manner as it would be
in determining whether a person is subject to the provisions of Section 16 of
the Securities Exchange Act of 1934 and the rules and regulations thereunder.
5. "COVERED SECURITY" means any interest or interest commonly known as a
security except that it shall not include securities issued by the government of
the United States, bankers acceptances, bank certificates of deposits,
commercial paper, high quality short term instruments and shares of registered
open-end investment companies.
<PAGE> 2
SECTION 3 - PROHIBITION ON PURCHASES AND SALES
1. No Access Person shall purchase or sell, directly or indirectly, any security
in which he has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership and which to his actual knowledge at the time of
such purchase or sale:
(a) Is being considered for purchase or sale by any of the Fund or
Separate Account; or
(b) Is being purchased or sold by any Fund or Separate Account
2. No Access Person shall purchase an interest in any initial public offering or
private placement without prior clearance from HSD's compliance officer.
SECTION 4 - EXEMPTED TRANSACTIONS
The prohibition of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the Access
Person has no direct influence or control;
(b) Purchases or sales of Securities which are not eligible for purchase
or sale by the Fund;
(c) Purchases or sales which are non-volitional on the part of either
the Access Person or the Fund;
(d) Purchases which are part of an automatic dividend reinvestment plan;
and
(e) Purchases effected upon the exercise of rights issued by issuer
pro-rata to all holders of a class of its securities, to the extent
such rights were acquired from such issuer, and sales of such rights
so acquired.
SECTION 5 - COMPLIANCE PROCEDURES
1. Initial and Annual Holdings Report - Within ten days of becoming an Access
Person and not later than January 31st thereafter, each Access Person must
submit a report to the compliance officer with the information listed below.
(a) The title, number of shares and principal amount of all Covered
Securities owned by the Access Person.
(b) The name of any broker, dealer or bank with whom the Access Person
maintains an account.
(c) The date the report is submitted.
The report should contain information that is no more than 30 days old.
2. Quarterly Reporting - Every Access Person shall, within ten days of the end
of each calendar quarter, report to the compliance officer, with respect to
transactions in any Covered
-2-
<PAGE> 3
Security in which such Access Person has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership in the Covered Security,
the information listed below.
(a) The date of the transaction, the title and the number of shares, and
the principal amount of each Covered Security involved.
(b) The nature of the transaction (i.e. purchase, sale or any other type
of acquisition or disposition).
(c) The price at which the transaction was effected.
(d) The name of the broker, dealer or bank with or through whom the
transaction was effected.
(e) If the Access Person has established a brokerage account during the
quarterly period, the name of the broker, dealer or bank and the
date the account was established.
(f) The date the report is submitted.
3. Review of Reports - The compliance officer or a designee shall be responsible
for reviewing all reports referenced above on at least a quarterly basis.
4. Confirmations - All Access Persons must direct their brokers to send
duplicate copies of confirmations for all Covered Security transactions to the
compliance officer.
5. Annual Certification - All Access Persons must certify annually that they
have read and understand the Code and have complied with its requirements.
6. The reporting requirements above shall not apply to transactions effected
for, and Covered Securities held in, any account over which the person has no
direct or indirect influence or control (e.g. blind trusts, employee stock
purchase plans or option grants).
SECTION 6 - SANCTIONS
Upon discovering violation of the Code, the Board of Directors of HSD may impose
such sanctions as it deems appropriate, including, among other things, a letter
of sanction, suspension or termination of employment of the violator. All
material violations of this Code and any sanctions imposed with respect thereto
shall be reported periodically to the board of directors of the Fund, with
respect to whose Securities violation occurred.
-3-
<PAGE> 1
EXHIBIT p.(iii)
Code of Ethics of Wellington Management Company LLP
<PAGE> 2
Wellington Management Company, llp
Wellington Trust Company, na
Wellington Management International
Wellington International Management Company Pte Ltd.
Code of Ethics
- --------------------------------------------------------------------------------
Summary Wellington Management Company, llp and its affiliates
have a fiduciary duty to investment company and
investment counseling clients which requires each
employee to act solely for the benefit of clients. Also,
each employee has a duty to act in the best interest of
the firm. In addition to the various laws and
regulations covering the firm's activities, it is
clearly in the firm's best interest as a professional
investment advisory organization to avoid potential
conflicts of interest or even the appearance of such
conflicts with respect to the conduct of the firm's
employees. Wellington Management's personal trading and
conduct must recognize that the firm's clients always
come first, that the firm must avoid any actual or
potential abuse of our positions of trust and
responsibility, and that the firm must never take
inappropriate advantage of its positions. While it is
not possible to anticipate all instances of potential
conflict, the standard is clear.
In light of the firm's professional and legal
responsibilities, we believe it is appropriate to
restate and periodically distribute the firm's Code of
Ethics to all employees. It is Wellington Management's
aim to be as flexible as possible in its internal
procedures, while simultaneously protecting the
organization and its clients from the damage that could
arise from a situation involving a real or apparent
conflict of interest. While it is not possible to
specifically define and prescribe rules regarding all
possible cases in which conflicts might arise, this Code
of Ethics is designed to set forth the policy regarding
employee conduct in those situations in which conflicts
are most likely to develop. If an employee has any doubt
as to the propriety of any activity, he or she should
consult the President or Regulatory Affairs Department.
The Code reflects the requirements of United States law,
Rule 17j-1 of the Investment Company Act of 1940, as
amended on October 29, 1999, as well as the
recommendations issued by an industry study group in
1994, which were strongly supported by the SEC. The term
"Employee" includes all employees and Partners.
- --------------------------------------------------------------------------------
Policy on Personal Essentially, this policy requires that all personal
Securities securities transactions (including acquisitions or
Transactions dispositions other than through a purchase or sale) by
all Employees must be cleared prior to execution. The
only exceptions to this policy of prior clearance are
noted below.
Definition of The following transactions by Employees are considered
"Personal Securities "personal" under applicable SEC rules and therefore
Transactions" subject to this statement of policy:
1
Transactions for an Employee's own account, including
IRA's.
2
Transactions for an account in which an Employee has
indirect beneficial ownership, unless the Employee has
no direct or indirect influence or control over the
account. Accounts involving family (including husband,
wife, minor children or other dependent relatives), or
accounts in which an Employee has a beneficial interest
(such as a trust of which the Employee is an income or
principal beneficiary) are included within the meaning
of "indirect beneficial interest".
<PAGE> 3
Code of Ethics
Page 2
If an Employee has a substantial measure of influence or
control over an account, but neither the Employee nor
the Employee's family has any direct or indirect
beneficial interest (e.g., a trust for which the
Employee is a trustee but not a direct or indirect
beneficiary), the rules relating to personal securities
transactions are not considered to be directly
applicable. Therefore, prior clearance and subsequent
reporting of such transactions are not required. In all
transactions involving such an account an Employee
should, however, conform to the spirit of these rules
and avoid any activity which might appear to conflict
with the investment company or counseling clients or
with respect to the Employee's position within
Wellington Management. In this regard, please note
"Other Conflicts of Interest", found later in this Code
of Ethics, which does apply to such situations.
- --------------------------------------------------------------------------------
Preclearance EXCEPT AS SPECIFICALLY EXEMPTED IN THIS SECTION, ALL
Required EMPLOYEES MUST CLEAR PERSONAL SECURITIES TRANSACTIONS
PRIOR TO EXECUTION. This includes bonds, stocks
(including closed end funds), convertibles, preferreds,
options on securities, warrants, rights, etc. for
domestic and foreign securities, whether publicly traded
or privately placed. The only exceptions to this
requirement are automatic dividend reinvestment and
stock purchase plan acquisitions, broad-based stock
index and U.S. government securities futures and options
on such futures, transactions in open-end mutual funds,
U.S. Government securities, commercial paper, or
non-volitional transactions. Non-volitional transactions
include gifts to an Employee over which the Employee has
no control of the timing or transactions which result
from corporate action applicable to all similar security
holders (such as splits, tender offers, mergers, stock
dividends, etc.). Please note, however, that most of
these transactions must be reported even though they do
not have to be precleared. See the following section on
reporting obligations.
Clearance for transactions must be obtained by
contacting the Director of Global Equity Trading or
those personnel designated by him for this purpose.
Requests for clearance and approval for transactions may
be communicated orally or via email. The Trading
Department will maintain a log of all requests for
approval as coded confidential records of the firm.
Private placements (including both securities and
partnership interests) are subject to special clearance
by the Director of Regulatory Affairs, Director of
Enterprise Risk Management or the General Counsel, and
the clearance will remain in effect for a reasonable
period thereafter, not to exceed 90 days.
CLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS FOR
PUBLICLY TRADED SECURITIES WILL BE IN EFFECT FOR ONE
TRADING DAY ONLY. THIS "ONE TRADING DAY" POLICY IS
INTERPRETED AS FOLLOWS:
- IF CLEARANCE IS GRANTED AT A TIME WHEN THE PRINCIPAL
MARKET IN WHICH THE SECURITY TRADES IS OPEN,
CLEARANCE IS EFFECTIVE FOR THE REMAINDER OF THAT
TRADING DAY UNTIL THE OPENING OF THAT MARKET ON THE
FOLLOWING DAY.
- IF CLEARANCE IS GRANTED AT A TIME WHEN THE PRINCIPAL
MARKET IN WHICH THE SECURITY TRADES IS CLOSED,
CLEARANCE IS EFFECTIVE FOR THE NEXT TRADING DAY UNTIL
THE OPENING OF THAT MARKET ON THE FOLLOWING DAY.
<PAGE> 4
Code of Ethics
Page 3
Filing of Reports Records of personal securities transactions by Employees
will be maintained. All Employees are subject to the
following reporting requirements:
1
Duplicate Brokerage All Employees must require their securities brokers to
Confirmations send duplicate confirmations of their securities
transactions to the Regulatory Affairs Department.
Brokerage firms are accustomed to providing this
service. Please contact Regulatory Affairs to obtain a
form letter to request this service. Each employee must
return to the Regulatory Affairs Department a completed
form for each brokerage account that is used for
personal securities transactions of the Employee.
Employees should not send the completed forms to their
brokers directly. The form must be completed and
returned to the Regulatory Affairs Department prior to
any transactions being placed with the broker. The
Regulatory Affairs Department will process the request
in order to assure delivery of the confirms directly to
the Department and to preserve the confidentiality of
this information. When possible, the transaction
confirmation filing requirement will be satisfied by
electronic filings from securities depositories.
2
Filing of Quarterly SEC rules require that a quarterly record of all
Report of all personal securities transactions submitted by each
"Personal Securities person subject to the Code's requirements and that this
Transactions" record be available for inspection. To comply with
these rules, every Employee must file a quarterly
personal securities transaction report within 10
calendar days after the end of each calendar quarter.
Reports are filed electronically utilizing the firm's
proprietary Personal Securities Transaction Reporting
System (PSTRS) accessible to all Employees via the
Wellington Management Intranet.
At the end of each calendar quarter, Employees will be
notified of the filing requirement. Employees are
responsible for submitting the quarterly report within
the deadline established in the notice.
Transactions during the quarter indicated on brokerage
confirmations or electronic filings are displayed on the
Employee's reporting screen and must be affirmed if they
are accurate. Holdings not acquired through a broker
submitting confirmations must be entered manually. All
Employees are required to submit a quarterly report,
even if there were no reportable transactions during the
quarter.
Employees must also provide information on any new
brokerage account established during the quarter
including the name of the broker, dealer or bank and the
date the account was established.
IMPORTANT NOTE: The quarterly report must include the
required information for all "personal securities
transactions" as defined above, except transactions in
open-end mutual funds, money market securities, U.S.
Government securities, and futures and options on
futures on U.S. government securities. Non-volitional
transactions and those resulting from corporate actions
must also be reported even though preclearance is not
required and the nature of the transaction must be
clearly specified in the report.
3
Certification of As part of the quarterly reporting process on PSTRS,
Compliance Employees are required to confirm their compliance with
the provisions of this Code of Ethics.
<PAGE> 5
Code of Ethics
Page 4
4
Filing of Personal Annually, all Employees must file a schedule indicating
Holding Report their personal securities holdings as of December 31 of
each year by the following January 30. SEC Rules require
that this report include the title, number of shares and
principal amount of each security held in an Employee's
personal account, and the name of any broker, dealer or
bank with whom the Employee maintains an account.
"Securities" for purposes of this report are those which
must be reported as indicated in the prior paragraph.
Newly hired Employees are required to file a holding
report within ten (10) days of joining the firm.
Employees may indicate securities held in a brokerage
account by attaching an account statement, but are not
required to do so, since these statements contain
additional information not required by the holding
report.
5
Review of Reports All reports filed in accordance with this section will
be maintained and kept confidential by the Regulatory
Affairs Department. Reports will be reviewed by the
Director of Regulatory Affairs or personnel designated
by her for this purpose.
- --------------------------------------------------------------------------------
Restrictions on While all personal securities transactions must be
"Personal Securities cleared prior to execution, the following guidelines
Transactions" indicate which transactions will be prohibited,
discouraged, or subject to nearly automatic clearance.
The clearance of personal securities transactions may
also depend upon other circumstances, including the
timing of the proposed transaction relative to
transactions by our investment counseling or investment
company clients; the nature of the securities and the
parties involved in the transaction; and the percentage
of securities involved in the transaction relative to
ownership by clients. The word "clients" refers
collectively to investment company clients and
counseling clients. Employees are expected to be
particularly sensitive to meeting the spirit as well as
the letter of these restrictions.
Please note that these restrictions apply in the case of
debt securities to the specific issue and in the case of
common stock, not only to the common stock, but to any
equity-related security of the same issuer including
preferred stock, options, warrants, and convertible
bonds. Also, a gift or transfer from you (an Employee)
to a third party shall be subject to these restrictions,
unless the donee or transferee represents that he or she
has no present intention of selling the donated
security.
1
No Employee may engage in personal transactions
involving any securities which are:
- being bought or sold on behalf of clients until one
trading day after such buying or selling is completed
or canceled. In addition, no Portfolio Manager may
engage in a personal transaction involving any
security for 7 days prior to, and 7 days following, a
transaction in the same security for a client account
managed by that Portfolio Manager without a special
exemption. See "Exemptive Procedures" below. Portfolio
Managers include all designated portfolio maNagers and
others who have direct authority to make investment
decisions to buy or sell securities, such as
investment team members and analysts involved in
Research Equity portfolios. All Employees who are
considered Portfolio Managers will be so notified by
the Regulatory Affairs Department.
<PAGE> 6
Code of Ethics
Page 5
- the subject of a new or changed action recommendation
from a research analyst until 10 business days
following the issuance of such recommendation;
- the subject of a reiterated but unchanged
recommendation from a research analyst until 2
business days following reissuance of the
recommendation
- actively contemplated for transactions on behalf of
clients, even though no buy or sell orders have been
placed. This restriction applies from the moment that
an Employee has been informed in any fashion that any
Portfolio Manager intends to purchase or sell a
specific security. This is a particularly sensitive
area and one in which each Employee must exercise
caution to avoid actions which, to his or her
knowledge, are in conflict or in competition with the
interests of clients.
2
The Code of Ethics strongly discourages short term
trading by Employees. In addition, no Employee may take
a "short term trading" profit in a security, which means
the sale of a security at a gain (or closing of a short
position at a gain) within 60 days of its purchase,
without a special exemption. See "Exemptive Procedures".
The 60 day prohibition does not apply to transactions
resulting in a loss, nor to futures or options on
futures on broad-based securities indexes or U.S.
government securities.
3
No Employee engaged in equity or bond trading may engage
in personal transactions involving any equity securities
of any company whose primary business is that of a
broker/dealer.
4
Subject to preclearance, Employees may engage in short
sales, options, and margin transactions, but such
transactions are strongly discouraged, particularly due
to the 60 day short term profit-taking prohibition. Any
Employee engaging in such transactions should also
recognize the danger of being "frozen" or subject to a
forced close out because of the general restrictions
which apply to personal transactions as noted above. In
specific case of hardship an exception may be granted by
the Director of Regulatory Affairs or her designee upon
approval of the Ethics Committee with respect to an
otherwise "frozen" transaction.
5
No Employee may engage in personal transactions
involving the purchase of any security on an initial
public offering. This restriction also includes new
issues resulting from spin-offs, municipal securities
and thrift conversions, although in limited cases the
purchase of such securities in an offering may be
approved by the Director of Regulatory Affairs or her
designee upon determining that approval would not
violate any policy reflected in this Code. This
restriction does not apply to open-end mutual funds, U.
S. government issues or money market investments.
6
EMPLOYEES MAY NOT PURCHASE SECURITIES IN PRIVATE
PLACEMENTS UNLESS APPROVAL OF THE DIRECTOR OF REGULATORY
AFFAIRS, DIRECTOR OF ENTERPRISE RISK
<PAGE> 7
Code of Ethics
Page 6
MANAGEMENT OR THE GENERAL COUNSEL HAS BEEN OBTAINED.
This approval will be based upon a determination that
the investment opportunity need not be reserved for
clients, that the Employee is not being offered the
investment opportunity due to his or her employment with
Wellington Management and other relevant factors on a
case-by-case basis. If the Employee has portfolio
management or securities analysis responsibilities and
is granted approval to purchase a private placement, he
or she must disclose the privately placed holding later
if asked to evaluate the issuer of the security. An
independent review of the Employee's analytical work or
decision to purchase the security for a client account
will then be performed by another investment
professional with no personal interest in the
transaction.
Gifts and Other Employees should not seek, accept or offer any gifts or
Sensitive Payments favors of more than minimal value or any preferential
treatment in dealings with any client, broker/dealer,
portfolio company, financial institution or any other
organization with whom the firm transacts business.
Occasional participation in lunches, dinners, cocktail
parties, sporting activities or similar gatherings
conducted for business purposes are not prohibited.
However, for both the Employee's protection and that of
the firm it is extremely important that even the
appearance of a possible conflict of interest be
avoided. Extreme caution is to be exercised in any
instance in which business related travel and lodgings
are paid for other than by Wellington Management, and
prior approval must be obtained from the Regulatory
Affairs Department.
Any question as to the propriety of such situations
should be discussed with the Regulatory Affairs
Department and any incident in which an Employee is
encouraged to violate these provisions should be
reported immediately. An explanation of all
extraordinary travel, lodging and related meals and
entertainment is to be reported in a brief memorandum to
the Director of Regulatory Affairs.
Employees must not participate individually or on behalf
of the firm, a subsidiary, or any client, directly or
indirectly, in any of the following transactions:
1
Use of the firm's funds for political purposes.
2
Payment or receipt of bribes, kickbacks, or payment or
receipt of any other amount with an understanding that
part or all of such amount will be refunded or delivered
to a third party in violation of any law applicable to
the transaction.
3
Payments to government officials or employees (other
than disbursements in the ordinary course of business
for such legal purposes as payment of taxes).
4
Payment of compensation or fees in a manner the purpose
of which is to assist the recipient to evade taxes,
federal or state law, or other valid charges or
restrictions applicable to such payment.
<PAGE> 8
Code of Ethics
Page 7
5
Use of the funds or assets of the firm or any subsidiary
for any other unlawful or improper purpose.
- --------------------------------------------------------------------------------
Other Conflicts of Employees should also be aware that areas other than
Interest personal securities transactions or gifts and sensitive
payments may involve conflicts of interest. The
following should be regarded as examples of situations
involving real or potential conflicts rather than a
complete list of situations to avoid.
"Inside Information" Specific reference is made to the firm's policy on the
use of "inside information" which applies to personal
securities transactions as well as to client
transactions.
Use of Information Information acquired in connection with employment by
the organization may not be used in any way which might
be contrary to or in competition with the interests of
clients. Employees are reminded that certain clients
have specifically required their relationship with us to
be treated confidentially.
Disclosure of Information regarding actual or contemplated investment
Information decisions, research priorities or client interests
should not be disclosed to persons outside our
organization and in no way can be used for personal
gain.
Outside All outside relationships such as directorships or
Activities trusteeships of any kind or membership in investment
organizations (e.g., an investment club) must be cleared
by the Director of Regulatory Affairs prior to the
acceptance of such a position. As a general matter,
directorships in unaffiliated public companies or
companies which may reasonably be expected to become
public companies will not be authorized because of the
potential for conflicts which may impede our freedom to
act in the best interests of clients. Service with
charitable organizations generally will be authorized,
subject to considerations related to time required
during working hours and use of proprietary information.
Exemptive Procedure The Director of Regulatory Affairs, the Director of
Enterprise Risk Management, the General Counsel or the
Ethics Committee can grant exemptions from the personal
trading restrictions in this Code upon determining that
the transaction for which an exemption is requested
would not result in a conflict of interest or violate
any other policy embodied in this Code. Factors to be
considered may include: the size and holding period of
the Employee's position in the security, the market
capitalization of the issuer, the liquidity of the
security, the reason for the Employee's requested
transaction, the amount and timing of client trading in
the same or a related security, and other relevant
factors.
Any Employee wishing an exemption should submit a
written request to the Director of Regulatory Affairs
setting forth the pertinent facts and reasons why the
employee believes that the exemption should be granted.
Employees are cautioned that exemptions are intended to
be exceptions, and repetitive exemptive applications by
an Employee will not be well received.
Records of the approval of exemptions and the reasons
for granting exemptions will be maintained by the
Regulatory Affairs Department.
<PAGE> 9
Code of Ethics
Page 8
- --------------------------------------------------------------------------------
Compliance with Adherence to the Code of Ethics is considered a basic
The Code of Ethics condition of employment with our organization. The
Ethics Committee monitors compliance with the Code and
reviews violations of the Code to determine what action
or sanctions are appropriate.
Violations of the provisions regarding personal trading
will presumptively be subject to being reversed in the
case of a violative purchase, and to disgorgement of any
profit realized from the position (net of transaction
costs and capital gains taxes payable with respect to
the transaction) by payment of the profit to any client
disadvantaged by the transaction, or to a charitable
organization, as determined by the Ethics Committee,
unless the Employee establishes to the satisfaction of
the Ethics Committee that under the particular
circumstances disgorgement would be an unreasonable
remedy for the violation.
Violations of the Code of Ethics may also adversely
affect an Employee's career with Wellington Management
with respect to such matters as compensation and
advancement.
Employees must recognize that a serious violation of the
Code of Ethics or related policies may result, at a
minimum, in immediate dismissal. Since many provisions
of the Code of Ethics also reflect provisions of the
U.S. securities laws, Employees should be aware that
violations could also lead to regulatory enforcement
action resulting in suspension or expulsion from the
securities business, fines and penalties, and
imprisonment.
Again, Wellington Management would like to emphasize the
importance of obtaining prior clearance of all personal
securities transactions, avoiding prohibited
transactions, filing all required reports promptly and
avoiding other situations which might involve even an
apparent conflict of interest. Questions regarding
interpretation of this policy or questions related to
specific situations should be directed to the Regulatory
Affairs Department or Ethics Committee.
Revised: March 1, 2000
<PAGE> 1
EXHIBIT Q
POWER OF ATTORNEY
<PAGE> 2
HARTFORD ADVISERS HLS FUND, INC., HARTFORD BOND HLS FUND, INC., HARTFORD CAPITAL
APPRECIATION HLS FUND, INC., HARTFORD DIVIDEND AND GROWTH HLS FUND, INC.,
HARTFORD INDEX HLS FUND, INC., HARTFORD INTERNATIONAL ADVISERS HLS FUND, INC.,
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND, INC., HARTFORD MIDCAP HLS FUND,
INC., HARTFORD MORTGAGE SECURITIES HLS FUND, INC., HARTFORD SERIES FUND, INC.,
HARTFORD SMALL COMPANY HLS FUND, INC., HARTFORD STOCK HLS FUND, INC., HARTFORD
MONEY MARKET HLS FUND, INC. AND THE HARTFORD MUTUAL FUNDS, INC.,
POWER OF ATTORNEY
<TABLE>
<S> <C>
Robert J. Clark Millard H. Pryor, Jr.
Winifred E. Coleman Lowndes A. Smith
George R. Jay John K. Springer
William A. O'Neill David M. Znamierowski
</TABLE>
do hereby jointly and severally authorize Kevin J. Carr, Marilyn T. West, Lynda
Godkin or Marianne O'Doherty, to sign as their agent any Securities Act of 1933
and/or Investment Company Act of 1940 Registration Statement, pre-effective
amendment or post-effective amendment and any Application for Exemption Relief
or other filings with the Securities and Exchange Commission relating to each
above-described Fund.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
<TABLE>
<S> <C>
/s/ Robert J. Clark Dated: January 27, 2000
- --------------------------
Robert J. Clark
/s/ Winifred E. Coleman Dated: January 27, 2000
- --------------------------
Winifred E. Coleman
/s/ George R. Jay Dated: January 27, 2000
- --------------------------
George R. Jay
/s/ William A. O'Neill Dated: January 27, 2000
- --------------------------
William A. O'Neill
/s/ Millard H. Pryor, Jr. Dated: January 21, 2000
- --------------------------
Millard H. Pryor, Jr.
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
/s/ Lowndes A. Smith Dated: January 27, 2000
- --------------------------
Lowndes A. Smith
/s/ John K. Springer Dated: January 27, 2000
- --------------------------
John K. Springer
/s/ David M. Znamierowski Dated: January 27, 2000
- --------------------------
David M. Znamierowski
</TABLE>
