<PAGE> 1
As filed with the Securities and Exchange Commission on February 2, 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. 13 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 15 /X/
THE HARTFORD MUTUAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
Hartford Plaza, Hartford, Connecticut 06115
(Address of Principal Executive Offices)
Registrant's Telephone Number Including Area Code: (860) 297-6443
Kevin J. Carr, Esquire
The Hartford Financial Services Group, Inc.
Investment Law Unit
55 Farmington Avenue
Hartford, Connecticut 06105
(Name and Address of Agent for Service)
The Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Section (a)(1) of Rule 24f-2 under the
Investment Company Act of 1940. The Registrant intends to file the Rule 24f-2
Notice for its fiscal year ended December 31, 1999 with the Securities and
Exchange Commission on or before March 31, 2000.
It is proposed that this filing will become effective (check appropriate box).
__________ immediately upon filing pursuant to paragraph (b) of Rule 485
______ on _______________ pursuant to paragraph (b) of Rule 485
<PAGE> 2
_____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_____ on ____________ pursuant to paragraph (a)(1) of Rule 485
X 75 days after filing pursuant to paragraph (a)(2) of Rule 485
_____ on ____________ pursuant to paragraph (a)(2) of Rule 485
Registrant has filed this post-effective amendment for the purpose of adding two
additional series to The Hartford Mutual Funds, Inc. (the "Company"), The
Hartford Global Health Fund and The Hartford Global Technology Fund. The Company
is currently comprised of twelve series each with Class A, Class B, Class C and
Class Y shares. This filing consists of a combined prospectus for the Class A,
Class B and Class C shares, a combined prospectus for the Class Y shares, and a
combined statement of additional information for the four classes of shares.
<PAGE> 3
THE HARTFORD MUTUAL FUNDS, INC.
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
MAY 1, 2000
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
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
ADVISERS FUND
HIGH YIELD FUND
BOND INCOME STRATEGY FUND
MONEY MARKET FUND
THE HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 219054
KANSAS CITY, MO 64121-9054
<PAGE> 4
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 concentrated funds, which are
sometimes known as "sector funds." Information on each fund, including risk
factors for investing in diversified versus non-diversified concentrated funds,
can be found on the pages following this introduction.
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosures carefully before investing.
<PAGE> 5
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
A summary of each fund's goals, The Hartford Global Health Fund
strategies, risks, performance and
expenses. 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
Prior performance of similar funds
Description of additional Additional investment matters
investment strategies
and investment risks.
Investment manager and Management of the funds
management fee
information.
Information on your About your account
account.
Choosing a share class
How sales charges are calculated
Sales charge reductions and waivers
Opening an account
Buying shares
Selling shares
Transaction policies
Dividends and account policies
Additional investor services
Further information on Additional share classes
the funds.
Financial highlights
For more information back cover
</TABLE>
2
<PAGE> 6
HARTFORD GLOBAL HEALTH FUND
INVESTMENT GOAL AND STYLE. 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.
The focus of the fund's investment process is stock selection through
fundamental analysis. The fund's investment approach to health care sector
investing 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.
Asset allocation within the portfolio will be diversified across sub-sectors of
the health care industry, but will at times be concentrated in sub-sectors that,
in the opinion of Wellington Management, provide the most compelling
opportunities based on fundamental research.
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 prove to be wrong
- 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. Wellington Management expects to
hold approximately 50 to 70 positions, some with a maximum position size of 10%
of the fund's assets at time of purchase. 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 stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that
3
<PAGE> 7
of a fund that invests primarily in larger companies.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's investments are concentrated in one sector of the economy. 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
concentrated fund 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 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.
PAST PERFORMANCE. Because the fund has been in operation for less than one
year no performance history has been provided.
SUB-ADVISER
The fund is managed by Wellington Management using a team of its global industry
analysts that specialize in the health care sector.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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%
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C> <C> <C>
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) 0.35% 1.00% 1.00%
fees (1)
Other expenses % % %
Total operating expenses % % %
Fee waiver % % %
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 voluntarily 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 voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, to these
levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
5
<PAGE> 9
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</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
Year 3
Year 5
Year 10
</TABLE>
6
<PAGE> 10
HARTFORD GLOBAL TECHNOLOGY FUND
INVESTMENT GOAL AND STYLE. 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.
The focus of the fund's investment process is stock selection through
fundamental analysis. The fund's investment approach to technology sector
investing is based on analyzing the competitive outlook for various sub-sectors
of the technology industry, identifying those sub-sectors 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 industry. 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 sub-sectors of the
technology industry, near term macroeconomic events that may detract or enhance
the sub-sector's attractiveness, and the number of underdeveloped opportunities
in each sub-sector. Opportunities dictate the magnitude and frequency of changes
in asset allocation among sub-sectors, but some representation typically is
maintained in each major sub-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 factors mentioned above will be
converted to shareholder values
Stocks will be considered for sale from the portfolio when:
- Target prices are achieved
- Earnings and/or return expectations are marked down 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. Wellington Management expects to
hold approximately 30 to 50 positions, some with a maximum position size of 10%
of the fund's assets at time of purchase. 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 stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that
7
<PAGE> 11
of a fund that invests primarily in larger companies.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's investments are concentrated in one sector of the economy. 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
concentrated fund than on a broadly diversified fund. Competition in the
industry 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.
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history has been provided.
SUB-ADVISER
The fund is managed by Wellington Management using a team of its global industry
analysts that specialize in the technology sector.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
8
<PAGE> 12
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your
investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
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 voluntarily 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 voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, to these
levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
9
<PAGE> 13
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</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
Year 3
Year 5
Year 10
</TABLE>
10
<PAGE> 14
THE HARTFORD SMALL COMPANY FUND
INVESTMENT GOAL AND STYLE. The Hartford Small Company Fund seeks growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Russell 2000 Index. As of December 31, 1999 this range was between approximately
$____ million and $____ billion, and the average market capitalization was $____
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 stock market movements. Because the fund concentrates on small
companies, its performance may be more volatile than that of a fund that invests
primarily in larger companies.
Stocks of smaller companies may be more risky than stocks of larger companies.
Many of these companies are young and have limited operating or business
history. Because these businesses frequently rely on narrow product lines and
niche markets, they can suffer severely from isolated business setbacks.
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.
11
<PAGE> 15
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
- -------------------------------------
CLASS A YEAR-BY-YEAR TOTAL RETURNS
BY CALENDAR YEAR (EXCLUDES SALES
CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C>
19.28% 10.46%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
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
CLASS B
CLASS C(1)
RUSSELL
2000 INDEX
</TABLE>
INDEX: Russell 2000 Index, an unmanaged index of small company equity
securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
12
<PAGE> 16
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>
SHAREHOLDER FEES
(fees paid directly from your
investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
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 voluntarily agreed to reduce
13
<PAGE> 17
the fee to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, to these
levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</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
Year 3
Year 5
Year 10
</TABLE>
14
<PAGE> 18
THE HARTFORD CAPITAL APPRECIATION FUND
INVESTMENT GOAL AND STYLE. The Hartford Capital Appreciation Fund seeks growth
of capital by investing primarily in stocks selected on the basis of potential
for capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
small, medium and large companies. 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 sector. This strategy is sometimes referred to as a
"stock picking" approach. Small and medium sized companies are selected
primarily on the basis of dynamic earnings growth potential. Larger companies
are selected primarily based on the expectation of a significant event that
Wellington Management believes will trigger an increase in the stock price.
In analyzing a prospective investment Wellington Management looks at a number of
factors, such as business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends and other related measures
of value.
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that of a
fund that invests primarily in larger companies.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
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.
15
<PAGE> 19
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS
BY CALENDAR YEAR (EXCLUDES SALES
CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
60% 55.11%
50%
40%
30%
20%
10% 3.26%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
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
CLASS B
CLASS C (1)
S&P 500
INDEX
INDEX: S&P 500 Index, an unmanaged
index of equity securities.
</TABLE>
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
16
<PAGE> 20
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.
17
<PAGE> 21
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your
investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
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 voluntarily 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 voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, to these
levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
18
<PAGE> 22
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
Year 3
Year 5
Year 10
</TABLE>
19
<PAGE> 23
THE HARTFORD MIDCAP FUND
INVESTMENT GOAL AND STYLE. The Hartford MidCap Fund seeks long-term growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Standard & Poor's MidCap 400 Index. As of December 31, 1999 this range was
between approximately $____________ million and $_____________ billion and the
average market capitalization was $_______ 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 stock market movements. Because the fund concentrates on
mid-sized companies, its performance may be more volatile than that of a fund
that invests primarily in larger companies.
Stocks of mid-sized companies may be more risky than stocks of larger companies.
These companies may be young and have more limited operating or business
history. Because these businesses frequently rely on narrower product lines and
niche markets, they can suffer from isolated business setbacks.
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
20
<PAGE> 24
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
98 99
<S> <C> <C>
30% 23.12%
25%
20%
15%
10%
5%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99 (INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE
12/31/97)
<S> <C> <C>
CLASS A
CLASS B
CLASS C (1)
S&P
MIDCAP
400 INDEX
</TABLE>
INDEX: Standard & Poor's MidCap 400 Index, an unmanaged index of equity
securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
21
<PAGE> 25
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Phillip H. Perelmuter
- Vice President of Wellington Management
- Manager of the fund since inception (1997)
- Joined Wellington Management in 1995
- Investment professional since 1983
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.45% 2.15% 2.15%
22
<PAGE> 26
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</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
Year 3
Year 5
Year 10
</TABLE>
23
<PAGE> 27
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
INVESTMENT GOAL AND STYLE. The Hartford International Opportunities Fund seeks
growth of capital by investing primarily in stocks issued by non-U.S. companies.
The fund normally invests at least 65% of its assets in stocks issued by
non-U.S. companies which trade in foreign markets generally considered to be
well established. Under normal market conditions the fund diversifies its
investments among at least three countries other than the United States. The
securities in which the fund invests are denominated in both U.S. dollars and
non-U.S. currencies and generally are traded in non-U.S. markets.
Wellington Management uses a three-pronged investment strategy:
- Wellington Management determines the relative attractiveness
of the many countries in which the fund may invest based upon
its analysis of the economic and political environment of each
country.
- Wellington Management also evaluates industries on a global
basis to determine which industries offer the most potential
for capital appreciation given current and projected global
and local economic and market conditions.
- Wellington Management conducts fundamental research on
individual companies to identify securities for purchase or
sale. Fundamental analysis of a company involves the
assessment of such factors as its business environment,
management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of
value.
In analyzing companies for investment, Wellington Management considers companies
for inclusion in the fund's portfolio that are typically larger, high-quality
companies that operate in established markets. Characteristics of high-quality
growth companies include a strong balance sheet, attractive industry trends,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market.
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs
24
<PAGE> 28
(thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
20% 0.84% 12.53%
15%
10%
5%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
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
CLASS B
CLASS C (1)
EAFE GDP (2)
INDEX
</TABLE>
INDEX: Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP") Index, an
unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
(2) Return is from 7/31/96 - 12/31/99
25
<PAGE> 29
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.
26
<PAGE> 30
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.65% 2.35% 2.35%
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
EXPENSES (WITH REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
27
<PAGE> 31
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
Year 3
Year 5
Year 10
</TABLE>
28
<PAGE> 32
THE HARTFORD GLOBAL LEADERS FUND
INVESTMENT GOAL AND STYLE. The Hartford Global Leaders Fund seeks growth of
capital by investing primarily in stocks issued by U.S. companies and non-U.S.
companies.
The fund invests primarily in a diversified portfolio of common stocks covering
a broad range of countries, industries and companies. Securities in which the
fund invests are denominated in both U.S. dollars and non-U.S. currencies and
may trade in both U.S. and non-U.S. markets.
Under normal market and economic conditions, the fund invests at least 65% of
its total assets in common stocks of high-quality growth companies worldwide.
These companies must, in the opinion of Wellington Management, be leaders in
their respective industries as indicated by an established market presence and
strong global, regional or country competitive positions. Under normal market
and economic conditions, the fund will diversify its investments in securities
of issuers among at least five countries, which may include the United States.
There are no limits on the amount of the fund's assets that may be invested in
each country.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach,
Wellington Management analyzes the global macro-economic and
investment environments. This includes an evaluation of U.S.
and non-U.S. economic and political conditions, fiscal and
monetary policies, demographic trends and investor sentiment.
Through top down analysis, Wellington Management anticipates
trends and changes in the markets and economy to identify
companies which offer the most potential for capital
appreciation given current and projected global and local
economic and market conditions.
- Top down analysis is followed by what is sometimes referred to
as a "bottom up" approach, which is the use of fundamental
analysis to identify specific securities for purchase or sale.
Fundamental analysis involves the assessment of a company
through such factors as its business environment, management,
balance sheet, income statements, anticipated earnings,
revenues and other related measures of value.
The fund emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a strong balance sheet, a high return on
equity, a strong management team, and attractive relative value within the
context of the global marketplace or a security's primary trading market.
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
29
<PAGE> 33
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 the fund's
performance for the same time period and since inception (along with that of a
broad-based market index for comparison). The bar chart figures do not include
the effect of sales charges, while the average annual total return figures do.
If sales charges were reflected in the bar chart, returns would have been lower.
All figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS A TOTAL RETURN FOR CALENDAR YEAR 1999
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
99
<S> <C>
30%
25%
20%
15%
10%
5%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 1999
WORST QUARTER: down ______%, _____ quarter 1999
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99 (INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE
9/30/98)
<S> <C> <C>
CLASS A
CLASS B
CLASS C
MSCI
INDEX
</TABLE>
INDEX: MSCI World Index, an unmanaged index of international equity securities.
30
<PAGE> 34
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.
31
<PAGE> 35
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.65% 2.35% 2.35%
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
EXPENSES (WITH REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
You would pay the following expenses if you did not redeem your shares:
32
<PAGE> 36
<TABLE>
<CAPTION>
EXPENSES (WITHOUT REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
33
<PAGE> 37
THE HARTFORD STOCK FUND
INVESTMENT GOAL AND STYLE. The Hartford Stock Fund seeks long-term growth of
capital, with income as a secondary consideration, by investing primarily in
stocks.
The fund normally invests at least 65% of the fund's total assets in the
common stocks of high-quality growth companies. Many of the companies in which
the fund invests have a history of paying dividends and are expected to continue
paying dividends in the future. The fund 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 stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly.
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.
34
<PAGE> 38
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
40% 31.78% 31.33%
35%
30%
25%
20%
15%
10%
5%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
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
CLASS B
CLASS C (1)
S&P 500
INDEX
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
35
<PAGE> 39
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Rand L. Alexander
- Senior Vice President of Wellington Management
- Manager of the fund since inception (1996)
- Joined Wellington Management in 1990
- Investment professional since 1976
Philip H. Perelmuter
- Vice President of Wellington Management
- Associate Manager of the fund since 1996
- Joined Wellington Management in 1995
- Investment professional since 1983
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
36
<PAGE> 40
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.45% 2.15% 2.15%
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
EXPENSES (WITH REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
37
<PAGE> 41
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
Year 3
Year 5
Year 10
</TABLE>
38
<PAGE> 42
THE HARTFORD GROWTH AND INCOME FUND
INVESTMENT GOAL AND STYLE. The Hartford Growth and Income Fund seeks growth of
capital and current income by investing primarily in stocks with earnings growth
potential and steady or rising dividends.
The fund invests primarily in a diversified portfolio of common stocks that
typically have steady or rising dividends and whose prospects for capital
appreciation are considered favorable by Wellington Management. 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 stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund'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.
39
<PAGE> 43
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 the fund's
performance over the same time period and since inception (along with that of a
broad-based market index for comparison). The bar chart figures do not include
the effect of sales charges, while the average annual total return figures do.
If sales charges were reflected in the bar chart, returns would have been lower.
All figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS A TOTAL RETURN FOR CALENDAR YEAR 1999
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
99
<S> <C>
30%
25%
20%
15%
10%
5%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 1999
WORST QUARTER: down ______%, _____ quarter 1999
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99 (INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE
4/30/98)
<S> <C> <C>
CLASS A
CLASS B
CLASS C (1)
S&P 500
INDEX
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance
less Class C share expenses and sales charges.
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
James A. Rullo
- Vice President of Wellington
40
<PAGE> 44
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>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
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 voluntarily 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 voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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
41
<PAGE> 45
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that the
fund's operating expenses remain the same and that you reinvest all dividends
and distributions. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</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
Year 3
Year 5
Year 10
</TABLE>
42
<PAGE> 46
THE HARTFORD DIVIDEND AND GROWTH FUND
INVESTMENT GOAL AND STYLE. The Hartford Dividend and Growth Fund seeks a high
level of current income consistent with growth of capital by investing primarily
in stocks.
The fund invests primarily in a diversified portfolio of common stocks that
typically have above average income yields and whose prospects for capital
appreciation are considered favorable by Wellington Management. Under normal
market and economic conditions at least 65% of the fund's total assets are
invested in dividend-paying equity securities. The fund 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 stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
43
<PAGE> 47
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
35% 30.99% 14.47%
30%
25%
20%
15%
10%
10%
5%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
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
CLASS B
CLASS C (1)
S&P 500
INDEX
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Laurie A. Gabriel
- Senior Vice President and Managing Director 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.
44
<PAGE> 48
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.40% 2.10% 2.10%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
45
<PAGE> 49
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</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
Year 3
Year 5
Year 10
</TABLE>
46
<PAGE> 50
THE HARTFORD ADVISERS FUND
INVESTMENT GOAL AND STYLE. The Hartford Advisers Fund seeks maximum long-term
total return. 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 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.
Manager allocation risk refers to the possibility that the portfolio managers
could incorrectly allocate assets so that the fund underperforms its peers.
Credit risk refers to the possibility that the issuing company may not be able
to pay interest and principal when due.
Prepayment risk refers to the possibility that any mortgage securities held by
the fund may be adversely affected by changes in prepayment rates on the
underlying mortgages. If prepayments increase as a result of lower interest
rates the fund may have to invest a portion of its assets at lower rates.
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.
47
<PAGE> 51
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
30% 23.30% 21.09%
25%
20%
15%
10%
5%
0%
</TABLE>
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
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
CLASS B
CLASS C (1)
S&P 500
INDEX
LGCB
INDEX
</TABLE>
INDICES: S&P 500 Index and the Lehman Government
Corporate Bond Index, unmanaged indices of stocks
and bonds, respectively.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
SUB-ADVISER
Wellington Management
48
<PAGE> 52
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>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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
</TABLE>
49
<PAGE> 53
<TABLE>
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.40% 2.10% 2.10%
</TABLE>
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH REDEMPTION) Class A Class B Class C
<S> <C> <C> <C>
Year 1
Year 3
Year 5
Year 10
</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
Year 3
Year 5
Year 10
</TABLE>
50
<PAGE> 54
THE HARTFORD HIGH YIELD FUND
INVESTMENT GOAL AND STYLE. The Hartford High Yield Fund seeks high current
income by investing in non-investment grade debt securities. Growth of capital
is a secondary objective.
The fund normally invests at least 65%, and may invest up to 100%, of its
portfolio in non-investment grade debt securities (securities rated "Ba" or
lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or lower by
Standard and Poor's Corporation ("S&P"), or securities which, if unrated, are
determined by HIMCO to be of comparable quality). Below investment grade
securities are commonly referred to as "high yield-high risk securities" or
"junk bonds". The fund will invest no more than 10% of total assets in
securities rated below B3 by Moody's or B- by S&P, or, if unrated, determined to
be of comparable quality by HIMCO. The fund may invest in bonds of any maturity
although the fund tends to have an average maturity within the intermediate-term
range.
The fund may invest up to 15% of its total assets in preferred stocks,
convertible securities, and securities carrying warrants to purchase equity
securities. The fund will not invest in common stocks directly, but may retain,
for reasonable periods of time, common stocks acquired upon conversion of debt
securities or upon exercise of warrants acquired with debt securities. The fund
may invest up to 30% of its total assets in securities of non-U.S. issuers 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.
Credit risk depends largely on the perceived financial health of bond issuers.
In general, lower-rated bonds have higher credit risks. Junk bond prices can
fall on bad news about the economy, an industry or a company. Share price, yield
and total return may fluctuate more than with less aggressive bond funds.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. If certain industries or investments don't perform as the
fund
51
<PAGE> 55
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.
Junk bonds and foreign securities may make the fund more sensitive to market or
economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or current yield of the portfolio's securities or to the value of
the fund's shares.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's performance, while the table shows the fund's
performance over the same time and since inception (along with that of a
broad-based market index for comparison). The bar chart figures do not include
the effect of sales charges, while the average annual total return figures do.
If sales charges were reflected in the bar chart, returns would have been lower.
All figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
- ------------------------------------------------------
CLASS A TOTAL RETURN FOR CALENDAR YEAR 1999
(EXCLUDES SALES CHARGES)
30%
25
20%
15%
10%
5%
0%
99
- ------------------------------------------------------
BEST QUARTER: up _____%, ______ quarter 1999
WORST QUARTER: down ______%, _____ quarter 1999
- ------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99 (INCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 9/30/98)
<S> <C> <C>
CLASS A
CLASS B
CLASS C
</TABLE>
52
<PAGE> 56
LEHMAN HIGH YIELD
CORPORATE INDEX
INDEX: Lehman High Yield Corporate Index, an unmanaged index of high yield fixed
income securities.
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 SUB-ADVISER hold shares of the fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
</TABLE>
53
<PAGE> 57
Net expenses (1)(2) 1.40% 2.10% 2.10%
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
EXPENSES (WITH REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
You would pay the following expenses if you did not redeem your shares:
EXPENSES (WITHOUT REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
54
<PAGE> 58
THE HARTFORD BOND INCOME STRATEGY FUND
INVESTMENT GOAL AND STYLE. The Hartford Bond Income Strategy Fund seeks a high
level of current income, consistent with a competitive total return, as compared
to bond funds with similar investment objectives and policies, by investing
primarily in debt securities. Debt securities 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 ("Ba1", "Ba2" or "Ba3" by Moody's Investors
Service, Inc. or "BB+", "BB" or "BB-" by Standard & Poor's Corporation), or
securities which, if unrated, are determined by HIMCO to be of comparable
quality. Securities rated below investment grade are commonly referred to as
"junk bonds".
The fund invests at least 65% of its total assets in debt securities with a
maturity of at least one year. Although the fund does not have a maximum
maturity term restriction, the fund tends to have an average maturity within the
intermediate-term range. The fund may invest up to 15% of its total assets in
preferred stocks, convertible securities, and securities accompanied by warrants
to purchase equity securities. The fund will not invest in common stocks
directly, but may retain, for reasonable periods of time, common stocks acquired
upon conversion of debt securities or upon exercise of warrants acquired with
debt securities. The fund may invest up to 30% of its total assets in debt
securities of non-U.S. 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 factors affecting this fund's performance are interest
rates and credit risk. When interest rates rise, bond prices fall; generally the
longer the fund's maturity, the more sensitive it is to this risk.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. In general, lower-rated bonds have higher credit risks. If
certain sectors or investments don't perform as the fund expects, it could
underperform its peers or lose money.
Junk bonds and foreign securities may make the fund more sensitive to market or
economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or
55
<PAGE> 59
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 the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
- ------------------------------------------------------
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
15% 10.80% 7.48%
10%
5%
0%
</TABLE>
- ------------------------------------------------------
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: down ______%, _____ quarter 199_
- ------------------------------------------------------
- ------------------------------------------------------
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
CLASS B
CLASS C (1)
LEHMAN
GOVERNMENT
CORPORATE
BOND INDEX
</TABLE>
INDEX: Lehman Government Corporate Bond Index, an unmanaged index of
fixed-income securities.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
56
<PAGE> 60
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>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.25% 1.95% 1.95%
</TABLE>
57
<PAGE> 61
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
EXPENSES (WITH REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
You would pay the following expenses if you did not redeem your shares:
EXPENSES (WITHOUT REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
58
<PAGE> 62
THE HARTFORD MONEY MARKET FUND
INVESTMENT GOAL AND STYLE. The Hartford Money Market Fund seeks maximum current
income consistent with liquidity and preservation of capital.
The fund seeks to maintain a stable share price of $1.00. The fund focuses on
specific short-term U.S. 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 reduce the value of
your account.
59
<PAGE> 63
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart figures do not
include the effect of sales charges, while the average annual total return
figures do. If sales charges were reflected in the bar chart, returns would have
been lower. All figures assume that all dividends and distributions were
reinvested. Keep in mind that past performance does not indicate future results.
- ------------------------------------------------------
CLASS A YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
(EXCLUDES SALES CHARGES)
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
10% 4.57% 4.69%
5%
0%
</TABLE>
- ------------------------------------------------------
BEST QUARTER: up _____%, ______ quarter 199_
WORST QUARTER: up ______%, _____ quarter 199_
- ------------------------------------------------------
- ------------------------------------------------------
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
CLASS B
CLASS C (1)
60-DAY TREASURY
BILL INDEX
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term treasury
bills.
Current 7-day yield as of December 31, 1999: ----%
Effective 7-day yield (which indicates the effect of daily compounding) as of
December 31, 1999: ____%
Please call 1-888-843-7824 for the most recent current
and effective yield information.
(1) Class C shares commenced operations on July 31, 1998. Class C share
performance prior to July 31, 1998 reflects Class B share performance less
Class C share expenses and sales charges.
60
<PAGE> 64
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>
SHAREHOLDER FEES
(fees paid directly from your investment) CLASS A CLASS B CLASS C
<S> <C> <C> <C>
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 % % %
Total operating expenses % % %
Fee waiver % % %
Net expenses (1)(2) 1.00% 1.70% 1.70%
</TABLE>
61
<PAGE> 65
(1) Although the Rule 12b-1 fee for Class A shares is 0.35% of average net
assets, the fund's distributor has voluntarily agreed to reduce the fee
to 0.30% through at least April 30, 2001. This waiver may be
discontinued at any time thereafter.
(2) HIFSCO has voluntarily agreed to limit the total operating expenses of
the Class A, Class B and Class C shares of the fund, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, to
these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
EXPENSES (WITH REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
You would pay the following expenses if you did not redeem your shares:
EXPENSES (WITHOUT REDEMPTION) Class A Class B Class C
Year 1
Year 3
Year 5
Year 10
62
<PAGE> 66
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because the mutual funds that are the subject of this prospectus (the "Retail
Funds") began operations in July, 1996, or later, they have limited operating
and performance histories. However, the Capital Appreciation Fund, International
Opportunities Fund, Stock Fund, Dividend and Growth Fund and Advisers Fund are
modeled after existing funds (the "HLS Funds") that are managed by the same
portfolio managers at HIMCO or Wellington Management and have investment
objectives, policies and strategies substantially similar to those of the
corresponding funds. Depending on the fund involved, similarity of investment
characteristics may involve factors such as industry diversification, country
diversification, portfolio beta, portfolio quality, average maturity of
fixed-income assets, equity/non-equity mixes, and individual holdings. The HLS
Funds are used as investment vehicles for the assets of variable annuity and
variable life insurance contracts issued by The Hartford affiliates. Below you
will find information about the performance of the HLS Funds.
The table below sets forth each fund, its corresponding HLS Fund, and their
respective inception date 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 between a fund and the corresponding
HLS Fund.
<TABLE>
<S> <C>
Fund, Inception Date, Asset Size Corresponding HLS Fund, Inception Date, Asset Size
Capital Appreciation Hartford Capital Appreciation HLS Fund, Inc.
(July 22, 1996) (April 2, 1984)
$ $
International Opportunities Hartford International Opportunities HLS Fund, Inc.
(July 22, 1996) (July 2, 1990)
$ $
Stock Hartford Stock HLS Fund, Inc.
(July 22, 1996) (August 31, 1977)
$ $
Dividend and Growth Hartford Dividend and Growth HLS Fund, Inc.
(July 22, 1996) (March 8, 1994)
$ $
Advisers Hartford Advisers HLS Fund, Inc.
(July 22, 1996) (March 31, 1983)
$ $
</TABLE>
The following table shows the average annualized total returns for the HLS Funds
for the one, three, five and ten year (or life of the HLS Fund, if shorter)
periods ended December 31, 1999. These figures are based on the actual gross
investment performance of the HLS Funds. From the
63
<PAGE> 67
gross investment performance figures, the maximum Total Fund Operating Expenses
for each Retail Fund are deducted to arrive at the net return. Please remember
that past performance is not indicative of future returns.
<TABLE>
<CAPTION>
10 YEARS OR
HLS FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
-------- ------ ------- ------- ---------------
<S> <C> <C> <C> <C>
Hartford Capital Appreciation HLS Fund,
Inc. (Inception 4/2/84)
Class A expenses plus maximum load % % % %
Class A expenses with no load (1) % % % %
Class B expenses with redemption % % % %
Class B expenses without redemption % % % %
Class C expenses with maximum load % % % %
and redemption
Class C expenses without load or % % % %
redemption
Hartford International Opportunities HLS
Fund, Inc. (Inception 7/2/90)
Class A expenses plus maximum load % % % %
Class A expenses with no load (1) % % % %
Class B expenses with redemption % % % %
Class B expenses without redemption % % % %
Class C expenses with maximum load % % % %
and redemption
Class C expenses without load or % % % %
redemption
Hartford Stock HLS Fund, Inc. (Inception
8/31/77)
</TABLE>
64
<PAGE> 68
<TABLE>
<S> <C> <C> <C> <C>
Class A expenses plus maximum load % % % %
Class A expenses with no load (1) % % % %
Class B expenses with redemption % % % %
Class B expenses without redemption % % % %
Class C expenses with maximum load % % % %
and redemption
Class C expenses without load or % % % %
redemption
Hartford Dividend and Growth HLS Fund,
Inc. (Inception 3/8/94)
Class A expenses plus maximum load % % N/A %
Class A expenses with no load (1) % % N/A %
Class B expenses with redemption % % N/A %
Class B expenses without redemption % % N/A %
Class C expenses with maximum load % % N/A %
and redemption
Class C expenses without load or % % N/A %
redemption
Hartford Advisers HLS Fund, Inc.
(Inception 3/31/83)
Class A expenses plus maximum load % % % %
Class A expenses with no load (1) % % % %
Class B expenses with redemption % % % %
Class B expenses without redemption % % % %
Class C expenses with maximum load % % % %
and redemption
</TABLE>
65
<PAGE> 69
Class C expenses without load or % % % %
redemption
- --------
(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).
66
<PAGE> 70
ADDITIONAL INVESTMENT MATTERS
USE OF OPTIONS AND FUTURES
Each fund (other than the Money Market fund) may purchase and sell options and
enter into futures contracts, in each case with respect to stocks, bonds, groups
of securities (such as financial indices) or foreign currencies. These
techniques permit a fund to gain exposure to a particular security or group of
securities, and thereby earn returns similar to those which would be earned by
direct investments in those securities. These techniques are also used to manage
risk by hedging a fund's portfolio investments. Use of these techniques may
result in losses to a fund or increase volatility.
USE OF MONEY MARKET INVESTMENTS FOR TEMPORARY DEFENSIVE PURPOSES
From time to time each fund (other than the Money Market fund) may invest some
or all of its assets in high quality money market securities for temporary
defensive purposes in response to adverse market, economic or political
conditions. To the extent a fund is in a defensive position, the fund may lose
the benefit of upswings and limit its ability to meet its investment objective.
ABOUT EACH FUND'S INVESTMENT GOAL
Each fund's investment goal may be changed without approval of the shareholders
of the fund. A fund may not be able to achieve its goal.
TAX CONSEQUENCES OF PORTFOLIO TRADING PRACTICES
At times each fund may engage in short-term trading, which could produce higher
brokerage expenses for a fund and higher taxable distributions to the fund's
shareholders. The funds are not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
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 by contacting the fund (see back cover for address and
phone number).
67
<PAGE> 71
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 $_____ billion in assets. As of December
31, 1999 HIFSCO had over $6 billion in assets under management. HIFSCO is
responsible for the general business management of each fund and supervises the
activities of the investment sub-advisers described below. HIFSCO is principally
located at 200 Hopmeadow Street, Simsbury, Connecticut 06070.
THE INVESTMENT SUB-ADVISERS
Wellington Management Company, LLP ("Wellington Management") is the investment
sub-adviser to the 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 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 $_________ 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 $__________ 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%
</TABLE>
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<PAGE> 72
<TABLE>
<S> <C>
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 0.75%
The Hartford Bond Income Strategy Fund 0.65%
The Hartford Capital Appreciation Fund 0.80%
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 0.85%
Opportunities Fund
The Hartford MidCap Fund 0.85%
The Hartford Money Market Fund 0.50%
The Hartford Small Company Fund 0.85%
The Hartford Stock Fund 0.80%
</TABLE>
(1)Fund commenced operations in 2000.
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<PAGE> 73
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 Rule 12b-1 plans which allow the class to pay
distribution fees for the sale and distribution of its shares. Because these
fees are paid out of a fund's assets on an ongoing basis, over time these fees
will increase the cost of your investment and may cost you more than paying
other types of sales charges.
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
waiver by the distributor).
CLASS B
- - No front-end sales charge; all your money goes to work for you right
away.
- - Distribution and service (12b-1) fees of 1.00%.
- - A deferred sales charge, as described on the following page.
- - Automatic conversion to Class A shares after eight years, thus reducing
future annual expenses.
CLASS C
- - 1% front-end sales charge.
- - Distribution and service (12b-1) fees of 1.00%.
- - A 1.00% contingent deferred sales charge on shares sold within one year
of purchase.
- - No automatic conversion to Class A shares, so annual expenses continue
at the Class C level throughout the life of your investment.
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>
AS A % OF DEALER
AS A % OF NET COMMISSION AS
YOUR INVESTMENT OFFERING INVESTMENT PERCENTAGE OF
PRICE 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>
70
<PAGE> 74
CLASS A sales charges and commissions paid to dealers for the Bond Income
Strategy Fund and High Yield Fund are as follows:
<TABLE>
<CAPTION>
AS A % OF DEALER
AS A % OF NET COMMISSION AS
YOUR INVESTMENT OFFERING INVESTMENT PERCENTAGE OF
PRICE OFFERING PRICE
<S> <C> <C> <C>
Less than 4.50% 4.71% 3.75%
$50,000
$50,000 - 4.00% 4.17% 3.50%
$99,999
$100,000 - 3.50% 3.63% 3.00%
$249,999
$250,000 - 2.50% 2.56% 2.00%
$499,999
$500,000 - 2.00% 2.04% 1.75%
$999,999
$1 million or 0% 0% 0%
more (1)
</TABLE>
(1) Investments of $1 million or more in Class A shares may be made with no
front-end sales charge. However, there is a contingent deferred sales
charge (CDSC) of 1% on any shares sold within 18 months of purchase.
For purposes of this CDSC, all purchases made during a calendar month
are counted as having been made on the first day of that month. The
CDSC is based on the lesser of the original purchase cost or the
current market value of the shares being sold, and is not charged on
shares you acquired by reinvesting your dividends. To keep your CDSC as
low as possible, each time you place a request to sell shares we will
first sell any shares in your account that are not subject to a CDSC.
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 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 are as follows:
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
71
<PAGE> 75
<TABLE>
<CAPTION>
Front End Sales Charge CDSC
AS A % OF AS A % OF NET YEARS AFTER CDSC
OFFERING PRICE INVESTMENT PURCHASE
(1)
<S> <C> <C> <C>
1.00% 1.01% 1st year 1.00%
</TABLE>
(1) The term offering price includes the front end sales load.
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 representing an increase over the cost paid, (2) shares acquired
through reinvestment of dividends and capital gains distributions, (3) shares
held for over 6 years and (4) shares held the longest during the six-year
period.
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 a Hartford Director (or version thereof)
variable annuity or single premium variable life contract, the current
account value of your contract or policy will be included. Participants in
retirement plans receive breakpoints at the plan level. You must notify
your broker that you are eligible for this privilege each time you make a
purchase.
- - LETTER OF INTENTION -- lets you purchase Class A shares of a fund over a
13-month period and receive the same sales charge as if all shares had been
purchased at once.
- - COMBINATION PRIVILEGE -- lets you combine Class A shares of multiple funds
for purposes of calculating the sales charge.
CDSC WAIVERS As long as the transfer agent is notified at the time you sell, the
CDSC for each share class will generally be waived in the following cases:
- - to make 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,
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 76
- - 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 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 within
the last 60 days on which an initial or contingent deferred sales charge
was paid (18-month CDSC applies),
- - 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 (18-month CDSC applies),
- - participants in retirement plans where Hartford Life Insurance Company or
an affiliate is the plan administrator,
- - 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
(18-month CDSC applies).
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
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 77
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
Minimum investment amounts may be waived for employees of The Hartford,
Wellington Management and their affiliates.
3 Complete the appropriate parts of the account application including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional application if you want
to add privileges later. If you have questions 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.
BUYING SHARES
<TABLE>
<CAPTION>
Opening an Account Adding to an account
<S> <C> <C>
By Check
</TABLE>
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 78
- - Make out a check for the investment amount, payable to "The Hartford Mutual
Funds, Inc."
- - Deliver the check and your completed application to your financial
representative, plan administrator or mail to the address listed below.
- - Make out a check for the investment amount, payable to "The Hartford Mutual
Funds, Inc."
- - Fill out the detachable investment slip from an account statement. If no
slip is available, include a note specifying the fund name, your share
class, your account number and the name(s) in which the account is
registered.
- - Deliver the check and your investment slip or note to your financial
representative, plan administrator or mail to the address listed below.
By Exchange
- - Call your financial representative, plan administrator or the transfer
agent at the number below to request an exchange. The minimum exchange
amount is $500 per fund.
- - Call your financial representative, plan administrator or the transfer
agent at the number below to request an exchange. The minimum exchange
amount is $500 per fund.
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 79
By Wire
- - Deliver your completed application to your financial representative, or
mail it to the address below.
- - Obtain your account number by calling your financial representative or the
phone number below.
- - Instruct your bank to wire the amount of your investment to: State Street
Bank and Trust Company. Account # 9905-205-2 Routing # 011000028 Specify
the fund name, your choice of share class, the new account number and the
name(s) in which the account is registered. Your bank may charge a fee to
wire funds.
- - Instruct your bank to wire the amount of your investment to: State Street
Bank and Trust Company Account # 9905-205-2 Routing # 011000028 Specify the
fund name, your share class, your account number and the name(s) in which
the account is registered. Your bank may charge a fee to wire funds.
By Phone
- - See "By Wire" and "By Exchange"
- - Verify that your bank or credit union is a member of the Automated Clearing
House (ACH) system. number below to verify that these features are in place
on your account.
- - 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
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
76
<PAGE> 80
your investment.
To open or add to an account using the Automatic Investment Plan, see
"Additional Investor Services".
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 81
SELLING SHARES
By letter
- - Write a letter of instruction or complete a power of 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.
- - 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" and "Bank
Account or Credit Union Information" sections of your new account
application.
- - Call the transfer agent to verify that the telephone redemption privilege
is in place on an account, or to request the forms to add it to an existing
account.
- - Amounts of $1,000 or more will be wired on the next business day. Your bank
may charge a fee for this service.
- - Amounts of less than $1,000 may be sent by EFT or by check. Funds from EFT
transactions are generally available by the second business day. Your bank
may charge a fee for this service.
- - Phone requests are limited to amounts up to $50,000 in a 7-day period.
By exchange
- - Obtain a current prospectus for the fund into which you are exchanging by
calling your financial representative or the transfer agent at the number
below.
- - Call your financial representative or the transfer agent to request an
exchange.
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 82
By check -- applies to Money Market Fund (Class A shares only)
- - Fill out the checkwriting section of the application.
- - Request checkwriting on your account application.
- - Verify that the shares to be sold were purchased more than 15 days earlier
or were purchased by wire.
- - Write a check for any amount over $100.
To sell shares through a systematic withdrawal plan, see "Additional Investor
Services".
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 83
SELLING SHARES IN WRITING
In certain circumstances, you will need to make your request to sell shares in
writing. You may need to include additional items with your request, as shown in
the table below. You may also need to include a signature guarantee, which
protects you against fraudulent orders. You will need a signature guarantee if:
- your address of record has changed within the past 30 days
- you are selling more than $50,000 worth of shares
- you are requesting payment other than by a check mailed to the address
of record and payable to the registered owner(s)
Please note that a notary public CANNOT provide a signature guarantee. 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).
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 84
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.
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 85
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 the 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 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 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 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.
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 86
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.
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.
SMALL ACCOUNTS (NON-RETIREMENT ONLY)
If you draw down a non-retirement account so that its total value is less than
$1,000, you may be asked to purchase more shares within 30 days. If you do not
take action, your fund may close out your account and mail you the proceeds. You
will not be charged a CDSC if your account is closed for this reason, and your
account will not be closed if its drop in value is due to fund performance or
the effects of sales charges.
SALES IN ADVANCE OF PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 15 business days after the purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, each fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities as prescribed by the Directors. When the shareholder sells portfolio
securities received in this fashion, he would incur a brokerage charge. Any such
securities would be 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 could be
liable for
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 87
any losses or fees 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
may be canceled and the broker-dealer or financial institution could 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 reinvestment) that affects your
account balances
- - after any changes of name or address of the registered owner(s)
- - in all other circumstances, every quarter
Every year you should also receive, if applicable, a Form 1099 tax information
statement.
If you are a participant in an employer-sponsored retirement plan you will
receive statements from your plan administrator.
DIVIDENDS Each fund intends to distribute substantially all of its net income
and capital gains to shareholders at least once a year. Normally, dividends from
net investment income of the 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 you receive from a fund, whether reinvested or
taken as cash, are generally considered taxable. Dividends from a fund's
long-term capital gains are taxable as capital gains; dividends from short-term
capital gains and income are generally taxable as ordinary income. Some
dividends paid in January may be taxable as if they had been paid the previous
December. Tax rates may vary depending on how long a fund investment is held.
See your application for distribution options.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
TAXABILITY OF TRANSACTIONS Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 88
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.
SYSTEMATIC WITHDRAWAL PLAN This plan may be used for routine bill payments or
periodic withdrawals from your account. To establish:
- - Make sure you have at least $5,000 worth of shares in your account and that
the amount per transaction is $50 or more per fund.
- - Make sure you are not planning to invest more money in this account (buying
shares during a period when you are also selling shares of the same fund is
not advantageous to you, because of sales charges).
- - SPECIFY THE PAYEE(S). The payee may be yourself or any other party, and
there is no limit to the number of payees you may have, as long as they are
all on the same payment schedule.
- - Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
- - FILL OUT THE RELEVANT PART OF THE ACCOUNT APPLICATION. To add a systematic
withdrawal plan to an existing account, contact your financial
representative or the transfer agent.
DOLLAR COST AVERAGING PROGRAMS (DCA) let you set up monthly or quarterly
exchanges from one fund to the same class of shares of another fund. To
establish:
- - Fill out the relevant part of the account application.
- - Be sure that the amount is for $100 or more.
- - Be sure that the accounts involved have identical registrations.
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 89
AUTOMATIC DIVIDEND DIVERSIFICATION (ADD) lets you automatically reinvest
dividends and capital gains paid by one fund into the same class of another
fund. To establish:
- - Fill out the relevant portion of the account application.
- - Be sure that the accounts involved have identical registrations.
RETIREMENT PLANS The Hartford Mutual Funds, Inc. offer a range of retirement
plans, including traditional and Roth IRAs, SIMPLE plans, SEPs and 401(k) plans.
Using these plans, you can invest in any fund offered by The Hartford Mutual
Funds, Inc. with a low minimum investment of $250. To find out more, call
1-888-843-7824.
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 90
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.
ADDRESS:
The Hartford Mutual Funds
P.O. Box 219054
Kansas City, MO 64121-9054
PHONE NUMBER:
1-888-843-7824
Or contact your financial representative or plan administrator for instructions
and assistance.
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<PAGE> 91
FINANCIAL HIGHLIGHTS
THE HARTFORD SMALL COMPANY FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.31 $12.16 $10.68 $10.00
Income from Investment Operations:
Net investment income (loss) (0.06) (0.02) (0.02)
Net realized and unrealized gain (loss) on
investments 1.33 2.05 1.42
------ ------ ------
Total from investment operations 1.27 2.03 1.40
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.12) (0.55) (0.72)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total distributions (0.12) (0.55) (0.72)
----- ----- -----
Net asset value, end of period $13.31 $12.16 $10.68
====== ====== ======
TOTAL RETURN(2) 10.46% 19.28% 14.11%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $37,623 $19,391 $4,673
Ratio of expenses to average net assets before
waivers and reimbursements 1.52% 1.77% 4.24%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.45% 1.45% 1.45%(4)
Ratio of net investment income (loss) to average net
assets (0.79%) (0.61%) (0.60%)(4)
Portfolio turnover rate(5) 266.82% 255.37% 69.92%
</TABLE>
- ----------
1 The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
2 Does not include sales charges.
3 Not annualized.
4 Annualized.
5 The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
88
<PAGE> 92
FINANCIAL HIGHLIGHTS
THE HARTFORD SMALL COMPANY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.09 $12.04 $10.65 $10.00
Income from Investment Operations:
Net investment income (loss) (0.12) (0.03) (0.02)
Net realized and unrealized gain (loss) on
investments 1.29 1.97 1.39
------ ------ ------
Total from investment operations 1.17 1.94 1.37
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.12) (0.55) (0.72)
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.12) (0.55) (0.72)
------ ------ ------
Net asset value, end of period $13.09 $12.04 $10.65
====== ====== ======
TOTAL RETURN(2) 9.73% 18.49% 13.81%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $18,345 $9,694 $241
Ratio of expenses to average net assets before
waivers and reimbursements 2.22% 2.53% 20.03%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.15% 2.15% 2.15%(4)
Ratio of net investment income (loss) to average net
assets (1.49%) (1.30%) (1.30%)(4)
Portfolio turnover rate(5) -- -- --
</TABLE>
- ----------
1 The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
2 Does not include sales charges.
3 Not annualized.
4 Annualized.
5 The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
89
<PAGE> 93
FINANCIAL HIGHLIGHTS
THE HARTFORD SMALL COMPANY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.48 $10.00
Income from Investment Operations:
Net investment income (loss) (0.02)
Net realized and unrealized gain (loss) on
investments 0.50
------
Total from investment operations 0.48
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital 0.00
------
Total distributions 0.00
Net asset value, end of period $10.48
======
TOTAL RETURN(2) 4.80%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $2,765
Ratio of expenses to average net assets before
waivers and reimbursements 2.46%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 2.15%(4)
Ratio of net investment income (loss) to average net
assets (1.49%)(4)
Portfolio turnover rate(5) --
</TABLE>
1 Class C shares were first offered on July 31, 1998.
2 Does not include sales charges.
3 Not annualized.
4 Annualized.
5 The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
90
<PAGE> 94
FINANCIAL HIGHLIGHTS
THE HARTFORD CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $20.42 $ 19.90 $ 13.36 $10.00
Income from Investment Operations:
Net investment income (loss) (0.10) (0.03) (0.03)
Net realized and unrealized gain (loss) on
investments 0.75 7.34 3.80
------ ------ ------
Total from investment operations 0.65 7.31 3.77
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.13) (0.77) (0.41)
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.13) (0.77) (0.41)
------ ------ ------
Net asset value, end of period $ 20.42 $ 19.90 $13.36
======== ======== ======
TOTAL RETURN(2) 3.26% 55.11% 37.75%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $364,951 $233,601 $9,028
Ratio of expenses to average net assets before
waivers and reimbursements 1.44% 1.64% 4.10%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.44% 1.45% 1.45%(4)
Ratio of net investment income (loss) to average net
assets (0.70%) (0.80%) (0.70%)(4)
Portfolio turnover rate(5) 123.42% 119.62% 149.99%(3)
</TABLE>
- --------
1 The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
2 Does not include sales charges.
3 Not annualized.
4 Annualized.
5 The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
91
<PAGE> 95
Financial Highlights
THE HARTFORD CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
Class B - period ended: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
Per share operating performance
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $20.08 $ 19.71 $ 13.32 $10.00
Income from Investment Operations:
Net investment income (loss) (0.21) (0.06) (0.02)
Net realized and unrealized gain (loss) on
investments 0.71 7.22 3.75
-------- --------- ------
Total from investment operations 0.50 7.16 3.73
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.13) (0.77) (0.41)
Return of capital 0.000 0.000 0.000
-------- -------- ------
Total distributions (0.13) (0.77) (0.41)
-------- -------- ------
Net asset value, end of period $ 20.08 $ 19.71 $13.32
======== ======== ======
TOTAL RETURN(2) 2.52% 54.15% 37.35%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $290,756 $174,392 $ 889
Ratio of expenses to average net assets before
waivers and reimbursements 2.15% 2.38% 9.05%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 2.15% 2.15% 2.15%(4)
Ratio of net investment income (loss) to average net
assets (1.39%) (1.46%) (1.53%)(4)
Portfolio turnover rate(5) -- -- --
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Annualized.
(4) Not annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
92
<PAGE> 96
FINANCIAL HIGHLIGHTS
THE HARTFORD CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.21 $ 10.00
Income from Investment Operations:
Net investment income (loss) (0.03)
Net realized and unrealized gain (loss) on
investments 0.24
-------
Total from investment operations 0.21
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital 0.00
-------
Total distributions 0.00
-------
Net asset value, end of period $ 10.21
=======
TOTAL RETURN(2) 2.10%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $15,231
Ratio of expenses to average net assets before
waivers and reimbursements 2.29%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.15%(5)
Ratio of net investment income (loss) to average net
assets 1.34%(5)
Portfolio turnover rate(3) --
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
93
<PAGE> 97
FINANCIAL HIGHLIGHTS
THE HARTFORD MIDCAP FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $12.30 $ 10.00
Income from Investment Operations:
Net investment income (loss) (0.05)
Net realized and unrealized gain (loss) on
investments 2.35
-------
Total from investment operations 2.30
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital 0.00
-------
Total distributions 0.00
-------
Net asset value, end of period $ 12.30
=======
TOTAL RETURN(2) 23.12%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $24,294
Ratio of expenses to average net assets before
waivers and reimbursements 1.57%
Ratio of expenses to average net assets after waivers
and reimbursements 1.45%
Ratio of net investment income (loss) to average net
assets (0.78%)
Portfolio turnover rate(3) 139.02%
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on December 31, 1997.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
94
<PAGE> 98
FINANCIAL HIGHLIGHTS
THE HARTFORD MIDCAP FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $12.22 $10.00
Income from Investment Operations:
Net investment income (loss) (0.10)
Net realized and unrealized gain (loss) on
investments 2.32
------
Total from investment operations 2.22
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital 0.00
------
Total distributions 0.00
------
Net asset value, end of period $12.22
======
TOTAL RETURN(2) 22.32%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,403
Ratio of expenses to average net assets before
waivers and reimbursements 2.31%
Ratio of expenses to average net assets after waivers
and reimbursements 2.15%
Ratio of net investment income (loss) to average net
assets (1.48%)
Portfolio turnover rate(3) --
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on December 31, 1997.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
95
<PAGE> 99
FINANCIAL HIGHLIGHTS
THE HARTFORD MIDCAP FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.87 $10.00
Income from Investment Operations:
Net investment income (loss) (0.03)
Net realized and unrealized gain (loss) on
investments 0.90
------
Total from investment operations 0.87
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital 0.00
------
Total distributions 0.00
------
Net asset value, end of period $10.87
======
TOTAL RETURN(2) 8.70%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,077
Ratio of expenses to average net assets before
waivers and reimbursements 2.57%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.15%(5)
Ratio of net investment income (loss) to average net
assets (1.45%)(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
96
<PAGE> 100
FINANCIAL HIGHLIGHTS
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.89 $ 10.58 $ 10.72 $10.00
Income from Investment Operations:
Net investment income (loss) 0.07 0.09 (0.02)
Net realized and unrealized gain (loss) on
investments 1.26 (0.01) 0.79
------- ------- ------
Total from investment operations 1.33 0.08 0.81
Less distributions:
Dividends from net investment income (0.02) (0.05) (0.06)
Distributions from capital gains 0.000 (0.17) (0.03)
Return of capital 0.000 0.000 0.000
------- ------- ------
Total distributions (0.02) (0.22) (0.09)
------- ------
Net asset value, end of period $ 11.89 $ 10.58 $10.72
======= ======= ======
TOTAL RETURN(2) 12.53% 0.84% 8.14%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $32,014 $15,701 $4,294
Ratio of expenses to average net assets before
waivers and reimbursements 1.84% 2.25% 5.35%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.65% 1.65% 1.65%(4)
Ratio of net investment income (loss) to average net
assets 0.69% 0.88% 0.51%(4)
Portfolio turnover rate(5) 148.58% 59.16% 21.51%(3)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
97
<PAGE> 101
FINANCIAL HIGHLIGHTS
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
Per share operating performance
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.73 $10.49 $10.69 $10.00
Income from Investment Operations:
Net investment income (loss) 0.01 0.07 (0.01)
Net realized and unrealized gain (loss) on
investments 1.23 (0.06) 0.80
------- ------ ------
Total from investment operations 1.24 0.01 0.79
Less distributions:
Dividends from net investment income 0.00 (0.04) (0.07)
Distributions from capital gains 0.00 (0.17) (0.03)
Return of capital 0.00 0.000 0.000
------- ------ ------
Total distributions 0.00 (0.21) (0.10)
------ ------
Net asset value, end of period $11.73 $10.49 $10.69
======= ====== ======
TOTAL RETURN(2) 11.82% 0.12% 7.86%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $11,767 $7,188 $163
Ratio of expenses to average net assets before
waivers and reimbursements 2.56% 3.03% 32.61%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 2.35% 2.35% 2.35%(4)
Ratio of net investment income (loss) to average net
assets 0.01% (0.05%) (0.86%)(4)
Portfolio turnover rate(5) --- --- ---
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
98
<PAGE> 102
FINANCIAL HIGHLIGHTS
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
Per share operating performance
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $9.57 $10.00
Income from Investment Operations:
Net investment income (loss) (0.01)
Net realized and unrealized gain (loss) on
investments (0.39)
------
Total from investment operations (0.40)
Less distributions:
Dividends from net investment income (0.03)
Distributions from capital gains 0.00
Return of capital 0.00
------
Total distributions (0.03)
Net asset value, end of period $ 9.57
======
TOTAL RETURN(2) (4.05%)(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,379
Ratio of expenses to average net assets before
waivers and reimbursements 2.83%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.35%(5)
Ratio of net investment income (loss) to average net
assets (0.71%)(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
99
<PAGE> 103
FINANCIAL HIGHLIGHTS
THE HARTFORD GLOBAL LEADERS FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $12.67 $10.00
Income from Investment Operations:
Net investment income (loss) (0.01)
Net realized and unrealized gain (loss) on
investments 3.03
------
Total from investment operations 3.02
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.35)
Return of capital 0.00
------
Total distributions (0.35)
Net asset value, end of period $12.67
======
TOTAL RETURN(2) 30.36%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,771
Ratio of expenses to average net assets before
waivers and reimbursements 2.66%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 1.65%(5)
Ratio of net investment income (loss) to average net
assets (0.19%)(5)
Portfolio turnover rate(3) 49.04%
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
100
<PAGE> 104
FINANCIAL HIGHLIGHTS
THE HARTFORD GLOBAL LEADERS FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $12.65 $10.00
Income from Investment Operations:
Net investment income (loss) (0.02)
Net realized and unrealized gain (loss) on
investments 3.02
------
Total from investment operations 3.00
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.35)
Return of capital 0.00
------
Total distributions (0.35)
Net asset value, end of period $12.65
======
TOTAL RETURN(2) 30.16%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 486
Ratio of expenses to average net assets before
waivers and reimbursements 3.55%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.35%(5)
Ratio of net investment income (loss) to average net
assets (0.92%)(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
101
<PAGE> 105
FINANCIAL HIGHLIGHTS
THE HARTFORD GLOBAL LEADERS FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $12.65 $10.00
Income from Investment Operations:
Net investment income (loss) (0.02)
Net realized and unrealized gain (loss) on
investments 3.02
------
Total from investment operations 3.00
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.35)
Return of capital 0.00
------
Total distributions (0.35)
Net asset value, end of period $12.65
======
TOTAL RETURN(2) 30.16%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 517
Ratio of expenses to average net assets before
waivers and reimbursements 3.57%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.35%(5)
Ratio of net investment income (loss) to average net
assets (0.90%)(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
102
<PAGE> 106
FINANCIAL HIGHLIGHTS
THE HARTFORD STOCK FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $19.70 $ 15.16 $ 11.53 $10.00
Income from Investment Operations:
Net investment income (loss) (0.01) 0.00 0.02
Net realized and unrealized gain (loss) on
investments 4.75 3.66 1.53
-------- ------- ------
Total from investment operations 4.74 3.66 1.55
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.19) (0.03) (0.02)
Return of capital (0.01) 0.000 0.000
-------- -------- -------
Total distributions (0.20) (0.03) (0.02)
------- ------
Net asset value, end of period $19.70 $15.16 $11.53
======== ======= ======
Total Return(2) 31.33% 31.78% 15.50%(3)
Ratios and Supplemental Data:
Net assets, end of period (in thousands) $268,226 $65,763 $6,273
Ratio of expenses to average net assets before
waivers and reimbursements 1.44% 1.64% 3.96%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.44% 1.45% 1.45%(4)
Ratio of net investment income (loss) to average net
assets (0.07%) 0.06% 0.71%(4)
Portfolio turnover rate(5) 37.03% 42.83% 11.87%(3)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
103
<PAGE> 107
FINANCIAL HIGHLIGHTS
THE HARTFORD STOCK FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $19.36 $ 15.01 $ 11.50 $10.00
Income from Investment Operations:
Net investment income (loss) (0.05) (0.02) 0.00
Net realized and unrealized gain (loss) on
investments 4.60 3.56 1.52
-------- ------- ------
Total from investment operations 4.55 3.54 1.52
Less distributions:
Dividends from net investment income 0.00 0.00 (0.02)
Distributions from capital gains (0.19) (0.03) 0.00
Return of capital (0.01) 0.000 0.000
-------- ------- ------
Total distributions (0.20) (0.03) (0.02)
------- ------
Net asset value, end of period $ 19.36 $ 15.01 $11.50
======== ======= ======
TOTAL RETURN(2) 30.38% 30.82% 15.20%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $185,205 $35,294 $1,254
Ratio of expenses to average net assets before
waivers and reimbursements 2.16% 2.38% 7.76%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 2.15% 2.15% 2.15%(4)
Ratio of net investment income (loss) to average net
assets (0.77%) (0.66%) (0.12%)(4)
Portfolio turnover rate(5) --- --- ---
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
104
<PAGE> 108
FINANCIAL HIGHLIGHTS
THE HARTFORD STOCK FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.45 $ 10.00
Income from Investment Operations:
Net investment income (loss) (0.01)
Net realized and unrealized gain (loss) on
investments 0.48
-------
Total from investment operations 0.47
Less distributions:
Dividends from net investment income (0.01)
Distributions from capital gains (0.01)
Return of capital 0.00
-------
Total distributions (0.02)
Net asset value, end of period $ 10.45
=======
TOTAL RETURN(2) 6.60%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $36,039
Ratio of expenses to average net assets before
waivers and reimbursements 2.24%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.15%(5)
Ratio of net investment income (loss) to average net
assets (0.76%)(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
105
<PAGE> 109
FINANCIAL HIGHLIGHTS
THE HARTFORD GROWTH AND INCOME FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 4/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $11.45 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.02
Net realized and unrealized gain (loss) on
investments 1.45
-------
Total from investment operations 1.47
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.02)
Return of capital 0.00
-------
Total distributions (0.02)
Net asset value, end of period $ 11.45
=======
TOTAL RETURN(2) 14.78%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $11,120
Ratio of expenses to average net assets before
waivers and reimbursements 1.58%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 1.45%(5)
Ratio of net investment income (loss) to average net
assets 0.23%(5)
Portfolio turnover rate(3) 35.10%
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on April 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
106
<PAGE> 110
FINANCIAL HIGHLIGHTS
THE HARTFORD GROWTH AND INCOME FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 4/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $11.41 $10.00
Income from Investment Operations:
Net investment income (loss) (0.01)
Net realized and unrealized gain (loss) on
investments 1.43
------
Total from investment operations 1.42
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.01)
Return of capital 0.00
------
Total distributions (0.01)
Net asset value, end of period $11.41
======
TOTAL RETURN(2) 14.21%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,538
Ratio of expenses to average net assets before
waivers and reimbursements 2.32%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.15%(5)
Ratio of net investment income (loss) to average net
assets (0.47%)(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on April 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
107
<PAGE> 111
FINANCIAL HIGHLIGHTS
THE HARTFORD GROWTH AND INCOME FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $11.25 $10.00
Income from Investment Operations:
Net investment income (loss) 0.01
Net realized and unrealized gain (loss) on
investments 1.27
------
Total from investment operations 1.28
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.03)
Return of capital 0.00
------
Total distributions (0.03)
Net asset value, end of period $11.25
======
TOTAL RETURN(2) 12.80%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,726
Ratio of expenses to average net assets before
waivers and reimbursements 2.38%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.15%(5)
Ratio of net investment income (loss) to average net
assets (0.53%)(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
108
<PAGE> 112
FINANCIAL HIGHLIGHTS
THE HARTFORD DIVIDEND AND GROWTH FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.62 $ 14.72 $ 11.45 $10.00
Income from Investment Operations:
Net investment income (loss) 0.15 0.13 0.07
Net realized and unrealized gain (loss) on
investments 1.97 3.40 1.46
-------- ------- ------
Total from investment operations 2.12 3.53 1.53
Less distributions:
Dividends from net investment income (0.15) (0.12) (0.06)
Distributions from capital gains (0.07) (0.14) (0.02)
Return of capital 0.000 0.000 0.000
-------- ------- ------
Total distributions (0.22) (0.26) (0.08)
Net asset value, end of period $ 16.62 $ 14.72 $11.45
======== ======= ======
Total Return(2) 14.47% 30.99% 15.29%(3)
Ratios and Supplemental Data:
Net assets, end of period (in thousands) $182,495 $67,861 $6,083
Ratio of expenses to average net assets before
waivers and reimbursements 1.38% 1.59% 4.12%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.38% 1.40% 1.40%(4)
Ratio of net investment income (loss) to average net
assets 1.08% 1.42% 1.95%(4)
Portfolio turnover rate(5) 46.43% 28.75% 29.80%(3)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
109
<PAGE> 113
FINANCIAL HIGHLIGHTS
THE HARTFORD DIVIDEND AND GROWTH FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.47 $14.61 $11.40 $10.00
Income from Investment Operations:
Net investment income (loss) 0.06 0.13 0.01
Net realized and unrealized gain (loss) on
investments 1.92 3.30 1.48
-------- ------- -------
Total from investment operations 1.98 3.43 1.49
Less distributions:
Dividends from net investment income (0.05) (0.08) (0.07)
Distributions from capital gains (0.07) (0.14) (0.02)
Return of capital 0.000 0.000 0.000
-------- ------- -------
Total distributions (0.12) (0.22) (0.09)
-------- ------- -------
Net asset value, end of period $16.47 $14.61 $11.40
======== ======= =======
TOTAL RETURN(2) 13.62% 30.20% 14.82%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $108,344 $33,730 $33,741
Ratio of expenses to average net assets before
waivers and reimbursements 2.10% 2.34% 12.97%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 2.10% 2.10% 2.10%(4)
Ratio of net investment income (loss) to average net
assets 0.39% 0.69% 0.82%(4)
Portfolio turnover rate(5) --- --- ---
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
110
<PAGE> 114
FINANCIAL HIGHLIGHTS
THE HARTFORD DIVIDEND AND GROWTH FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.34 $10.00
Income from Investment Operations:
Net investment income (loss) 0.03
Net realized and unrealized gain (loss) on
investments 0.44
------
Total from investment operations 0.47
Less distributions:
Dividends from net investment income (0.06)
Distributions from capital gains (0.07)
Return of capital 0.00
------
Total distributions (0.13)
Net asset value, end of period $10.34
======
TOTAL RETURN(2) 4.82%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $9,682
Ratio of expenses to average net assets before
waivers and reimbursements 2.20%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.10%(5)
Ratio of net investment income (loss) to average net
assets 0.23%(5)
Portfolio turnover rate(3) ---
</TABLE>
- -----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
111
<PAGE> 115
FINANCIAL HIGHLIGHTS
THE HARTFORD ADVISERS FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $15.71 $ 13.41 $ 11.08 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.23 0.16 0.09
Net realized and unrealized gain (loss) on
investments 2.58 2.41 1.07
-------- ------- -------
Total from investment operations 2.81 2.57 1.16
Less distributions:
Dividends from net investment income (0.25) (0.17) (0.08)
Distributions from capital gains (0.26) (0.07) 0.00
Return of capital 0.000 0.000 0.000
-------- ------- -------
Total distributions (0.51) (0.24) (0.08)
-------- ------- -------
Net asset value, end of period $ 15.71 $ 13.41 $ 11.08
======== ======= =======
TOTAL RETURN(2) 21.09% 23.30% 11.56%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $316,435 $98,633 $14,347
Ratio of expenses to average net assets before
waivers and reimbursements 1.38% 1.55% 2.94%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.38% 1.40% 1.40%(4)
Ratio of net investment income (loss) to average net
assets 1.67% 1.54% 2.13%(4)
Portfolio turnover rate(5) 40.24% 38.62% 19.75%(3)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
112
<PAGE> 116
FINANCIAL HIGHLIGHTS
THE HARTFORD ADVISERS FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $15.59 $ 13.33 $ 11.05 $10.00
Income from Investment Operations:
Net investment income (loss) 0.15 0.16 0.02
Net realized and unrealized gain (loss) on
investments 2.54 2.31 1.11
-------- ------- ------
Total from investment operations 2.69 2.47 1.13
Less distributions:
Dividends from net investment income (0.17) (0.12) (0.08)
Distributions from capital gains (0.26) (0.07) 0.00
Return of capital 0.000 0.000 0.000
-------- ------- ------
Total distributions (0.42) (0.19) (0.08)
-------- ------- ------
Net asset value, end of period $15.59 $ 13.33 $11.05
======== ======= ======
TOTAL RETURN(2) 20.27% 22.44% 11.28%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $237,959 $39,334 $1,499
Ratio of expenses to average net assets before
waivers and reimbursements 2.11% 2.31% 6.71%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 2.10% 2.10% 2.10%(4)
Ratio of net investment income (loss) to average net
assets 0.98% 0.80% 1.24%(4)
Portfolio turnover rate(5) --- --- ---
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
113
<PAGE> 117
FINANCIAL HIGHLIGHTS
THE HARTFORD ADVISERS FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.11 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.10
Net realized and unrealized gain (loss) on
investments 0.41
-------
Total from investment operations 0.51
Less distributions:
Dividends from net investment income (0.14)
Distributions from capital gains (0.26)
Return of capital 0.00
-------
Total distributions (0.40)
Net asset value, end of period $ 10.11
=======
TOTAL RETURN(2) 5.25%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $54,907
Ratio of expenses to average net assets before
waivers and reimbursements 2.18%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.10%(5)
Ratio of net investment income (loss) to average net
assets 1.06%(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
114
<PAGE> 118
FINANCIAL HIGHLIGHTS
THE HARTFORD HIGH YIELD FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 9/30/98-12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.15 $10.00
Income from Investment Operations:
Net investment income (loss) 0.19
Net realized and unrealized gain (loss) on
investments 0.13
------
Total from investment operations 0.32
Less distributions:
Dividends from net investment income (0.17)
Distributions from capital gains 0.00
Return of capital 0.00
------
Total distributions (0.17)
Net asset value, end of period $10.15
======
TOTAL RETURN(2) 3.33%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,507
Ratio of expenses to average net assets before
waivers and reimbursements 1.53%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 1.40%(5)
Ratio of net investment income (loss) to average net
assets 7.06%(5)
Portfolio turnover rate(3) 10.85%
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
115
<PAGE> 119
FINANCIAL HIGHLIGHTS
THE HARTFORD HIGH YIELD FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.14 $10.00
Income from Investment Operations:
Net investment income (loss) 0.16
Net realized and unrealized gain (loss) on
investments 0.14
------
Total from investment operations 0.30
Less distributions:
Dividends from net investment income (0.16)
Distributions from capital gains 0.00
Return of capital 0.00
------
Total distributions (0.16)
Net asset value, end of period $10.14
======
Total Return(2) 3.09%(4)
Ratios and Supplemental Data:
Net assets, end of period (in thousands) $2,322
Ratio of expenses to average net assets before
waivers and reimbursements 2.31%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.10%(5)
Ratio of net investment income (loss) to average net
assets 6.50%(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
116
<PAGE> 120
FINANCIAL HIGHLIGHTS
THE HARTFORD HIGH YIELD FUND FINANCIAL HIGHLIGHTS
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
Class C - PERIOD ENDED: 12/31/99 9/30/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.14 $10.00
Income from Investment Operations:
Net investment income (loss) 0.16
Net realized and unrealized gain (loss) on
investments 0.14
------
Total from investment operations 0.30
Less distributions:
Dividends from net investment income (0.16)
Distributions from capital gains 0.00
Return of capital 0.00
------
Total distributions (0.16)
Net asset value, end of period $10.14
======
TOTAL RETURN(2) 3.08%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $2,278
Ratio of expenses to average net assets before
waivers and reimbursements 2.31%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 2.10%(5)
Ratio of net investment income (loss) to average net
assets 6.49%(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission
on September 30, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
117
<PAGE> 121
FINANCIAL HIGHLIGHTS
THE HARTFORD BOND INCOME STRATEGY FUND FINANCIAL HIGHLIGHTS
================================================================================
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-
PER SHARE OPERATING PERFORMANCE 12/31/96(1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.76 $10.61 $10.26 $10.00
------ ------ ------
Income from Investment Operations:
Net investment income (loss) 0.54 0.57 0.26
Net realized and unrealized gain (loss) on
investments 0.23 0.50 0.31
------ ------ ------
Total from investment operations 0.77 1.07 0.57
Less distributions:
Dividends from net investment income (0.54) (0.56) (0.25)
Distributions from capital gains (0.08) (0.16) (0.06)
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.62) (0.72) (0.31)
------ ------ ------
Net asset value, end of period $10.76 $10.61 $10.26
====== ====== ======
TOTAL RETURN(2) 7.48% 10.80% 5.73%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $47,143 $28,589 $10,925
Ratio of expenses to average net assets before
waivers and reimbursements 1.27% 1.44% 2.72%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.25% 1.25% 1.25%(4)
Ratio of net investment income (loss) to average net
assets 5.04% 5.59% 5.72%(4)
Portfolio turnover rate(5) 135.01% 220.45% 75.52%(3)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
118
<PAGE> 122
FINANCIAL HIGHLIGHTS
THE HARTFORD BOND INCOME STRATEGY FUND FINANCIAL HIGHLIGHTS
================================================================================
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED:
12/31/96(1)
PER SHARE OPERATING PERFORMANCE 12/31/99 12/31/98 12/31/97 7/1/96-
- ------------------------------------------------------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.72 $10.58 $10.25 $10.00
------ ------ ------ ------
Income from Investment Operations:
Net investment income (loss) 0.47 0.53 0.20
Net realized and unrealized gain (loss) on
investments 0.22 0.46 0.34
------ ------ ------
Total from investment operations 0.69 0.99 0.54
Less distributions:
Dividends from net investment income (0.47) (0.50) (0.23)
Distributions from capital gains (0.08) (0.16) (0.06)
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.55) (0.66) (0.29)
------ ------ ------
Net asset value, end of period $10.72 $10.58 $10.25
TOTAL RETURN(2) 6.70% 9.96% 5.38%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $16,772 $5,745 $124
Ratio of expenses to average net assets before
waivers and reimbursements 2.01% 2.19% 22.36%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.95% 1.95% 1.95%(4)
Ratio of net investment income (loss) to average net
assets 4.32% 4.85% 5.22%(4)
Portfolio turnover rate(5) --- --- ---
</TABLE>
- -------------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect
activity since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
(5) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
119
<PAGE> 123
FINANCIAL HIGHLIGHTS
THE HARTFORD BOND INCOME STRATEGY FUND FINANCIAL HIGHLIGHTS
================================================================================
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------- -------------- -----------
<S> <C> <C>
Net asset value, beginning of period $10.06 $10.00
Income from Investment Operations:
Net investment income (loss) 0.18
Net realized and unrealized gain (loss) on
investments 0.14
------
Total from investment operations 0.32
Less distributions:
Dividends from net investment income (0.20)
Distributions from capital gains (0.06)
Return of capital 0.00
------
Total distributions (0.26)
Net asset value, end of period $10.06
======
TOTAL RETURN(2) 3.19%(4)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $5,420
Ratio of expenses to average net assets before
waivers and reimbursements 2.13%(5)
Ratio of expenses to average net assets after waivers
and reimbursements 1.95%(5)
Ratio of net investment income (loss) to average net
assets 4.13%(5)
Portfolio turnover rate(3) ---
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
120
<PAGE> 124
FINANCIAL HIGHLIGHTS
THE HARTFORD MONEY MARKET FUND FINANCIAL HIGHLIGHTS
================================================================================
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS A - PERIOD ENDED: 12/31/99 12/31/98 12/31/97 7/1/96-
12/31/96(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------- -------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income (loss) 0.50 0.05 0.02
Net realized and unrealized gain (loss) on
investments 0.00 0.00 0.00
-------- -------- -------
Total from investment operations 0.50 0.05 0.02
Less distributions:
Dividends from net investment income (0.50) (0.05) (0.02)
Distributions from capital gains 0.00 0.00 0.00
Return of capital 0.000 0.000 0.000
-------- -------- -------
Total distributions (0.50) (0.05) (0.02)
-------- -------
Net asset value, end of period $1.00 $1.00 $1.00
======== ======== =======
TOTAL RETURN(2) 4.69% 4.73% 2.01%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $29,424 $22,578 $10,754
Ratio of expenses to average net assets before
waivers and reimbursements 1.20% 1.23% 2.70%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.00% 1.00% 1.00%(4)
Ratio of net investment income (loss) to average net
assets 4.57% 4.67% 4.49%(4)
Portfolio turnover rate N/A N/A N/A
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
121
<PAGE> 125
FINANCIAL HIGHLIGHTS
THE HARTFORD MONEY MARKET FUND FINANCIAL HIGHLIGHTS
================================================================================
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS B - PERIOD ENDED: 12/31/99 12/31/98 8/22/97-
12/31/97(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------- ------------- ----------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income (loss) 0.40 0.01
Net realized and unrealized gain (loss) on
investments 0.00 0.00
------- ------
Total from investment operations 0.40 0.01
Less distributions:
Dividends from net investment income (0.40) (0.01)
Distributions from capital gains 0.00 0.00
Return of capital 0.000 0.00
------- ------
Total distributions (0.40) (0.01)
------
Net asset value, end of period $1.00 $1.00
======= ======
TOTAL RETURN(2) 3.97% 1.45%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $11,936 $4,449
Ratio of expenses to average net assets before
waivers and reimbursements 1.86% 3.63%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.70% 1.70%(4)
Ratio of net investment income (loss) to average net
assets 3.83% 3.92%(4)
Portfolio turnover rate N/A N/A
</TABLE>
- ----------
(1) Class B shares were first offered on August 22, 1997.
(2) Does not include sales charges.
(3) Not annualized.
(4) Annualized.
122
<PAGE> 126
FINANCIAL HIGHLIGHTS
THE HARTFORD MONEY MARKET FUND FINANCIAL HIGHLIGHTS
================================================================================
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS C - PERIOD ENDED: 12/31/99 7/31/98-
12/31/98(1)
PER SHARE OPERATING PERFORMANCE
- ------------------------------------------------------- ---------- -------------
<S> <C> <C>
Net asset value, beginning of period $1.00 $1.00
Income from Investment Operations:
Net investment income (loss) 0.20
Net realized and unrealized gain (loss) on
investments 0.00
------
Total from investment operations 0.20
Less distributions:
Dividends from net investment income (0.20)
Distributions from capital gains 0.00
Return of capital 0.000
------
Total distributions (0.20)
Net asset value, end of period $1.00
======
TOTAL RETURN(2) 1.58%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,203
Ratio of expenses to average net assets before
waivers and reimbursements 2.02%(4)
Ratio of expenses to average net assets after waivers
and reimbursements 1.70%(4)
Ratio of net investment income (loss) to average net
assets 3.57%4
Portfolio turnover rate ---
</TABLE>
- ----------
(1) Class C shares were first offered on July 31, 1998.
(2) Does not include sales charges.
(3)The portfolio turnover rate is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(4) Not annualized.
(5) Annualized.
123
<PAGE> 127
FOR MORE INFORMATION
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Additional information on each fund is contained in the financial statements and
portfolio holdings in the fund's annual and semi-annual report. In the fund's
annual report you will also find a discussion of the market conditions and
investment strategies that significantly affected performance during the last
fiscal year, and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on all aspects of the funds.
A current SAI and annual report have been filed with the Securities and Exchange
Commission and are incorporated by reference into (are legally a part of) this
prospectus.
To request a free copy of the current annual/semiannual report and/or the SAI or
for shareholder inquiries, please contact the funds at:
BY MAIL:
THE HARTFORD MUTUAL FUNDS, INC.
P.O. Box 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 1-800-SEC-0330.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET:
www.sec.gov
SEC FILE NUMBER: 811-07589
124
<PAGE> 128
THE HARTFORD MUTUAL FUNDS, INC.
CLASS Y SHARES
PROSPECTUS
MAY 1, 2000
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
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
ADVISERS FUND
HIGH YIELD FUND
BOND INCOME STRATEGY FUND
MONEY MARKET FUND
THE HARTFORD MUTUAL FUNDS, INC.
P.O. BOX 219054
KANSAS CITY, MO 64121-9054
<PAGE> 129
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 concentrated funds,
which are sometimes known as "sector funds." Information on each fund, including
risk factors for investing in diversified versus non-diversified concentrated
funds, can be found on the pages following this introduction.
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosures carefully before investing.
2
<PAGE> 130
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
A summary of each fund's goals, The Hartford Global Health Fund
strategies, risks, performance and
expenses. 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
Prior performance of similar funds
Description of additional Additional investment matters
investment strategies and
investment risks.
Investment manager and management Management of the funds
fee information.
Information on your account. About your account
Class Y investor requirements
Opening an account
Buying shares
Selling shares
Transaction policies
Dividends and account policies
Additional investor services
Further information on the funds. Additional share classes
Financial highlights
For more information back cover
</TABLE>
3
<PAGE> 131
THE HARTFORD GLOBAL HEALTH FUND
INVESTMENT GOAL AND STYLE. 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.
The focus of the fund's investment process is stock selection through
fundamental analysis. The fund's investment approach to health care sector
investing 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.
Asset allocation within the portfolio will be diversified across sub-sectors of
the health care industry, but will at times be concentrated in sub-sectors that,
in the opinion of Wellington Management, provide the most compelling
opportunities based on fundamental research.
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 prove to be wrong
- - 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. Wellington Management expects to
hold approximately 50 to 70 positions, some with a maximum position size of 10%
of the fund's assets at time of purchase. 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 stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that
4
<PAGE> 132
of a fund that invests primarily in larger companies.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
The fund's investments are concentrated in one sector of the economy. 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
concentrated fund 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 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.
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history has been provided.
SUB-ADVISER
The fund is managed by Wellington Management using a team of its global industry
analysts that specialize in the health care sector.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES Class Y
(fees paid directly from your investment)
<S> <C>
Maximum sales charge (load) None
None Maximum load imposed on purchases as a
percentage of offering price None
</TABLE>
5
<PAGE> 133
<TABLE>
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
6
<PAGE> 134
THE HARTFORD GLOBAL TECHNOLOGY FUND
INVESTMENT GOAL AND STYLE. 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.
The focus of the fund's investment process is stock selection through
fundamental analysis. The fund's investment approach to technology sector
investing is based on analyzing the competitive outlook for various sub-sectors
of the technology industry, identifying those sub-sectors 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 industry. 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 sub-sectors of the
technology industry, near term macroeconomic events that may detract or enhance
the sub-sector's attractiveness, and the number of underdeveloped opportunities
in each sub-sector. Opportunities dictate the magnitude and frequency of changes
in asset allocation among sub-sectors, but some representation typically is
maintained in each major sub-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 factors mentioned above will be
converted to shareholder values
Stocks will be considered for sale from the portfolio when:
- - Target prices are achieved
- - Earnings and/or return expectations are marked down 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. Wellington Management expects to
hold approximately 30 to 50 positions, some with a maximum position size of 10%
of the fund's assets at time of purchase. 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 stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that of a
fund that invests primarily in larger companies.
7
<PAGE> 135
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 concentrated in one sector of the economy. 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
concentrated fund than on a broadly diversified fund. Competition in the
industry 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.
PAST PERFORMANCE. Because the fund has been in operation for less than one year
no performance history has been provided.
SUB-ADVISER
The fund is managed by Wellington Management using a team of its global industry
analysts that specialize in the technology sector.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
<S> <C>
Maximum sales charge (load) None
</TABLE>
8
<PAGE> 136
<TABLE>
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
9
<PAGE> 137
THE HARTFORD SMALL COMPANY FUND
INVESTMENT GOAL AND STYLE. The Hartford Small Company Fund seeks growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Russell 2000 Index. As of December 31, 1999 this range was between approximately
$____ million and $____ billion, and the average market capitalization was
$_______ 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 stock market movements. Because the fund concentrates on small
companies, its performance may be more volatile than that of a fund that invests
primarily in larger companies.
Stocks of smaller companies may be more risky than stocks of larger companies.
Many of these companies are young and have limited operating or business
history. Because these businesses frequently rely on narrow product lines and
niche markets, they can suffer severely from isolated business setbacks.
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.
10
<PAGE> 138
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
and average annual figures do not include the effect of sales charges as no
sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C>
19.69% 11.05%
</TABLE>
BEST QUARTER: up ______%, ____ quarter 199__
WORST QUARTER: down ___%, _____ quarter 199___
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
RUSSELL
2000 INDEX % %
</TABLE>
INDEX: Russell 2000 Index, an unmanaged index of small company equity
securities.
11
<PAGE> 139
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>
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
12
<PAGE> 140
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
13
<PAGE> 141
THE HARTFORD CAPITAL APPRECIATION FUND
INVESTMENT GOAL AND STYLE. The Hartford Capital Appreciation Fund seeks growth
of capital by investing primarily in stocks selected on the basis of potential
for capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
small, medium and large companies. 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 sector. This strategy is sometimes referred to as a
"stock picking" approach. Small and medium sized companies are selected
primarily on the basis of dynamic earnings growth potential. Larger companies
are selected primarily based on the expectation of a significant event that
Wellington Management believes will trigger an increase in the stock price.
In analyzing a prospective investment Wellington Management looks at a number of
factors, such as business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends and other related measures
of value.
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements. Because the fund concentrates on small,
medium and large companies, its performance may be more volatile than that of a
fund that invests primarily in larger companies.
Stocks of small or mid-sized companies may be more risky than stocks of larger
companies. These companies may be young and have more limited operating or
business history. Because these businesses frequently rely on narrower product
lines and niche markets, they can suffer from isolated business setbacks.
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.
14
<PAGE> 142
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
and average annual figures do not include the effect of sales charges as no
sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C>
56.00% 3.68%
</TABLE>
BEST QUARTER: up ______%, ____ quarter 199___
WORST QUARTER: down _____%, _____ quarter 199___
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
S&P 500
INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
15
<PAGE> 143
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>
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
16
<PAGE> 144
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
17
<PAGE> 145
THE HARTFORD MIDCAP FUND
INVESTMENT GOAL AND STYLE. The Hartford MidCap Fund seeks long-term growth of
capital by investing primarily in stocks selected on the basis of potential for
capital appreciation.
The fund normally invests at least 65% of its total assets in common stocks of
companies with market capitalizations within the range represented by the
Standard & Poor's MidCap 400 Index. As of December 31, 1999 this range was
between approximately $_______ million and $________ billion and the average
market capitalization was $_____ 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 stock market movements. Because the fund concentrates on
mid-sized companies, its performance may be more volatile than that of a fund
that invests primarily in larger companies.
Stocks of mid-sized companies may be more risky than stocks of larger companies.
These companies may be young and have more limited operating or business
history. Because these businesses frequently rely on narrower product lines and
niche markets, they can suffer from isolated business setbacks.
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
18
<PAGE> 146
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its
transaction costs (thus lowering performance) and increase your taxable
distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart 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 YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
98 99
<S> <C>
23.62%
</TABLE>
BEST QUARTER: up ____%, _____ quarter 199___
WORST QUARTER: down ______%, ______ quarter 199__
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE
12/31/97)
<S> <C> <C>
CLASS Y % %
S&P
MIDCAP
400 INDEX % %
</TABLE>
INDEX: Standard & Poor's MidCap 400 Index, an unmanaged index of equity
securities.
19
<PAGE> 147
SUB-ADVISER
Wellington Management
PORTFOLIO MANAGER
Phillip H. Perelmuter
- Vice President of Wellington Management
- Manager of the fund since inception (1997)
- Joined Wellington Management in 1995
- Investment professional since 1983
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
20
<PAGE> 148
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
21
<PAGE> 149
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
INVESTMENT GOAL AND STYLE. The Hartford International Opportunities Fund seeks
growth of capital by investing primarily in stocks issued by non-U.S. companies.
The fund normally invests at least 65% of its assets in stocks issued by
non-U.S. companies which trade in foreign markets generally considered to be
well established. Under normal market conditions the fund diversifies its
investments among at least three countries other than the United States. The
securities in which the fund invests are denominated in both U.S. dollars and
non-U.S. currencies and generally are traded in non-U.S. markets.
Wellington Management uses a three-pronged investment strategy:
- Wellington Management determines the relative attractiveness of the
many countries in which the fund may invest based upon its analysis
of the economic and political environment of each country.
- Wellington Management also evaluates industries on a global basis to
determine which industries offer the most potential for capital
appreciation given current and projected global and local economic
and market conditions.
- Wellington Management conducts fundamental research on individual
companies to identify securities for purchase or sale. Fundamental
analysis of a company involves the assessment of such factors as its
business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related
measures of value.
In analyzing companies for investment, Wellington Management considers companies
for inclusion in the fund's portfolio that are typically larger, high-quality
companies that operate in established markets. Characteristics of high-quality
growth companies include a strong balance sheet, attractive industry trends,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market.
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs
22
<PAGE> 150
(thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart 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 YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C>
1.31% 13.11%
</TABLE>
BEST QUARTER: up ____%, ____ quarter 199___
WORST QUARTER: down ____%, _____ quarter 199___
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
EAFE GDP
INDEX % %(1)
</TABLE>
INDEX: Morgan Stanley Europe, Australia, Far East GDP ("EAFE GDP") Index, an
unmanaged index of equity securities.
(1) Return is from 7/31/96 - 12/31/99
23
<PAGE> 151
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.
24
<PAGE> 152
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
25
<PAGE> 153
THE HARTFORD GLOBAL LEADERS FUND
INVESTMENT GOAL AND STYLE. The Hartford Global Leaders Fund seeks growth of
capital by investing primarily in stocks issued by U.S. companies and non-U.S.
companies.
The fund invests primarily in a diversified portfolio of common stocks covering
a broad range of countries, industries and companies. Securities in which the
fund invests are denominated in both U.S. dollars and non-U.S. currencies and
may trade in both U.S. and non-U.S. markets.
Under normal market and economic conditions, the fund invests at least 65% of
its total assets in common stocks of high-quality growth companies worldwide.
These companies must, in the opinion of Wellington Management, be leaders in
their respective industries as indicated by an established market presence and
strong global, regional or country competitive positions. Under normal market
and economic conditions, the fund will diversify its investments in securities
of issuers among at least five countries, which may include the United States.
There are no limits on the amount of the fund's assets that may be invested in
each country.
The fund uses a two-tiered investment strategy:
- Using what is sometimes referred to as a "top down" approach,
Wellington Management analyzes the global macro-economic and
investment environments. This includes an evaluation of U.S. and
non-U.S. economic and political conditions, fiscal and monetary
policies, demographic trends and investor sentiment. Through top
down analysis, Wellington Management anticipates trends and changes
in the markets and economy to identify companies which offer the
most potential for capital appreciation given current and projected
global and local economic and market conditions.
- Top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to
identify specific securities for purchase or sale. Fundamental
analysis involves the assessment of a company through such factors
as its business environment, management, balance sheet, income
statements, anticipated earnings, revenues and other related
measures of value.
The fund emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a strong balance sheet, a high return on
equity, a strong management team, and attractive relative value within the
context of the global marketplace or a security's primary trading market.
MAIN RISKS. As with most stock funds, the value of your investment may go down
in response to stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
26
<PAGE> 154
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 the fund's
performance for the same time period and since inception (along with that of a
broad-based market index for comparison). The bar chart figures do not include
the effect of sales charges, while the average annual total return figures do.
If sales charges were reflected in the bar chart, returns would have been lower.
All figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS Y TOTAL RETURN FOR CALENDAR YEAR 1999
<TABLE>
<CAPTION>
<S> <C>
30%
25%
20%
15%
10%
5%
0%
--------------
99
</TABLE>
BEST QUARTER: up _____%, ______ quarter 1999
WORST QUARTER: down ______%, _____ quarter 1999
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 9/30/98)
<S> <C> <C>
CLASS Y
MSCI
INDEX
</TABLE>
INDEX: MSCI World Index, an unmanaged index of international equity securities.
SUB-ADVISER
27
<PAGE> 155
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.
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
28
<PAGE> 156
<TABLE>
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
29
<PAGE> 157
THE HARTFORD STOCK FUND
INVESTMENT GOAL AND STYLE. The Hartford Stock Fund seeks long-term growth of
capital, with income as a secondary consideration, by investing primarily in
stocks.
The fund normally invests at least 65% of the fund's total assets in the
common stocks of high-quality growth companies. Many of the companies in which
the fund invests have a history of paying dividends and are expected to continue
paying dividends in the future. The fund 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 stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly.
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.
30
<PAGE> 158
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
and average annual figures do not include the effect of sales charges as no
sales charge is applicable to the Class Y shares. All figures assume that all
dividends and distributions were reinvested. Keep in mind that past performance
does not indicate future results.
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C>
32.33% 31.80%
</TABLE>
BEST QUARTER: up ___%, _____ quarter 199___
WORST QUARTER: down _____%, _____ quarter 199___
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
S&P 500 INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
YOUR EXPENSES. This table describes the SUB-ADVISER
fees and expenses that you may pay if
you buy and hold shares of the fund. Wellington Management
PORTFOLIO MANAGER
Rand L. Alexander
- Senior Vice President
of Wellington
Management
- Manager of the fund
since
31
<PAGE> 159
inception (1996)
- Joined Wellington
Management in 1990
- Investment
professional since
1976
Philip H. Perelmuter
- Vice President of
Wellington Management
- Associate Manager of
the fund since 1996
- Joined Wellington
Management in 1995
- Investment
professional since
1983
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
<S> <C>
(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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
32
<PAGE> 160
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
33
<PAGE> 161
THE HARTFORD GROWTH AND INCOME FUND
INVESTMENT GOAL AND STYLE. The Hartford Growth and Income Fund seeks growth of
capital and current income by investing primarily in stocks with earnings growth
potential and steady or rising dividends.
The fund invests primarily in a diversified portfolio of common stocks that
typically have steady or rising dividends and whose prospects for capital
appreciation are considered favorable by Wellington Management. 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 stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund'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.
34
<PAGE> 162
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 the fund's
performance over the same time period and since inception (along with that of a
broad-based market index for comparison). The bar chart figures do not include
the effect of sales charges, while the average annual total return figures do.
If sales charges were reflected in the bar chart, returns would have been lower.
All figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS Y TOTAL RETURN FOR CALENDAR YEAR 1999
<TABLE>
99
<S> <C>
</TABLE>
BEST QUARTER: up _____%, ______ quarter 1999
WORST QUARTER: down ______%, _____ quarter 1999
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/99 (INCLUDES SALES
CHARGES)
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 4/30/98)
<S> <C> <C>
CLASS Y
S & P 500 INDEX
</TABLE>
INDEX: S & P 500 Index, an unmanaged index of equity securities.
YOUR EXPENSES. This table describes the fees SUB-ADVISER
and expenses that you may pay if you buy and
hold shares of the fund.
Wellington Management
PORTFOLIO MANAGER
James A. Rullo
- Vice President of
Wellington Management
35
<PAGE> 163
- Manager of the fund
since inception (1998)
- Joined Wellington
Management in 1994
- Investment professional
since 1987
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
<S> <C>
(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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
36
<PAGE> 164
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
37
<PAGE> 165
THE HARTFORD DIVIDEND AND GROWTH FUND
INVESTMENT GOAL AND STYLE. The Hartford Dividend and Growth Fund seeks a high
level of current income consistent with growth of capital by investing primarily
in stocks.
The fund invests primarily in a diversified portfolio of common stocks that
typically have above average income yields and whose prospects for capital
appreciation are considered favorable by Wellington Management. Under normal
market and economic conditions at least 65% of the fund's total assets are
invested in dividend-paying equity securities. The fund 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 stock market movements.
Foreign investments may be more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
The fund's management strategy will influence performance significantly. If the
fund's stock selection strategy doesn't perform as expected, the fund could
underperform its peers or lose money.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart 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.
38
<PAGE> 166
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
97 98 99
<S> <C> <C>
31.59% 14.86%
</TABLE>
BEST QUARTER: up _____%, _____ quarter 199______
WORST QUARTER: down _______%, ______ quarter 199___
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
S&P 500 INDEX % %
</TABLE>
INDEX: S&P 500 Index, an unmanaged index of equity securities.
39
<PAGE> 167
YOUR EXPENSES. This table describes the fees SUB-ADVISER
and expenses that you may pay if you buy and
hold shares of the fund.
Wellington Management
PORTFOLIO MANAGER
Laurie A. Gabriel
- Senior Vice President
of Wellington Management
- Manager of the fund
since inception (1996)
- Joined Wellington
Management in 1976
- Investment professional
since 1976
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
<S> <C>
(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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
40
<PAGE> 168
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
41
<PAGE> 169
THE HARTFORD ADVISERS FUND
INVESTMENT GOAL AND STYLE. The Hartford Advisers Fund seeks maximum long-term
total return. 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 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.
Manager allocation risk refers to the possibility that the portfolio managers
could incorrectly allocate assets so that the fund underperforms its peers.
Credit risk refers to the possibility that the issuing company may not be able
to pay interest and principal when due.
Prepayment risk refers to the possibility that any mortgage securities held by
the fund may be adversely affected by changes in prepayment rates on the
underlying mortgages. If prepayments increase as a result of lower interest
rates the fund may have to invest a portion of its assets at lower rates.
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.
42
<PAGE> 170
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart 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 YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C>
23.80% 21.62%
</TABLE>
BEST QUARTER: up _____%, _____ quarter 199____
WORST QUARTER: down ________%, _____ quarter 199____
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
S&P 500 INDEX % %
LGCB INDEX % %
</TABLE>
INDICES: S&P 500 Index and the Lehman Government Corporate Bond Index, unmanaged
indices of stocks and bonds, respectively.
YOUR EXPENSES. This table describes the fees SUB-ADVISER
and expenses that you may pay if you buy and
hold shares of the fund.
Wellington Management
PORTFOLIO MANAGERS
Paul D. Kaplan
- Senior Vice President
of Wellington Management
43
<PAGE> 171
- 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
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
<S> <C>
(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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
44
<PAGE> 172
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
45
<PAGE> 173
THE HARTFORD HIGH YIELD FUND
INVESTMENT GOAL AND STYLE. The Hartford High Yield Fund seeks high current
income by investing in non-investment grade debt securities. Growth of capital
is a secondary objective.
The fund normally invests at least 65%, and may invest up to 100%, of its
portfolio in non-investment grade debt securities (securities rated "Ba" or
lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or lower by
Standard and Poor's Corporation ("S&P"), or securities which, if unrated, are
determined by HIMCO to be of comparable quality). Below investment grade
securities are commonly referred to as "high yield-high risk securities" or
"junk bonds". The fund will invest no more than 10% of total assets in
securities rated below B3 by Moody's or B- by S&P, or, if unrated, determined to
be of comparable quality by HIMCO. The fund may invest in bonds of any maturity
although the fund tends to have an average maturity within the intermediate-term
range.
The fund may invest up to 15% of its total assets in preferred stocks,
convertible securities, and securities carrying warrants to purchase equity
securities. The fund will not invest in common stocks directly, but may retain,
for reasonable periods of time, common stocks acquired upon conversion of debt
securities or upon exercise of warrants acquired with debt securities. The fund
may invest up to 30% of its total assets in securities of non-U.S. issuers 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.
Credit risk depends largely on the perceived financial health of bond issuers.
In general, lower-rated bonds have higher credit risks. Junk bond prices can
fall on bad news about the economy, an industry or a company. Share price, yield
and total return may fluctuate more than with less aggressive bond funds.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. If certain industries or investments don't perform as the
fund
46
<PAGE> 174
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.
Junk bonds and foreign securities may make the fund more sensitive to market or
economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or current yield of the portfolio's securities or to the value of
the fund's shares.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows the fund's total return for the first full
calendar year of the fund's performance, while the table shows the fund's
performance over the same time and since inception (along with that of a
broad-based market index for comparison). The bar chart figures do not include
the effect of sales charges, while the average annual total return figures do.
If sales charges were reflected in the bar chart, returns would have been lower.
All figures assume that all dividends and distributions were reinvested. Keep in
mind that past performance does not indicate future results.
CLASS Y TOTAL RETURN FOR CALENDAR YEAR 1999
<TABLE>
<S> <C>
30%
25%
20%
15%
10%
5%
0% _______________________
99
</TABLE>
BEST QUARTER: up _____%, ______ quarter 1999
WORST QUARTER: down ______%, _____ quarter 1999
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 9/30/98)
<S> <C> <C>
CLASS Y
LEHMAN HIGH YIELD
CORPORATE INDEX
</TABLE>
INDEX: Lehman High Yield Corporate Index, an unmanaged index of high yield fixed
income securities.
47
<PAGE> 175
YOUR EXPENSES. This table describes the fees SUB-ADVISER
and expenses that you may pay if you buy and
hold shares of the fund.
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
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
<S> <C>
(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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
%
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
48
<PAGE> 176
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
49
<PAGE> 177
THE HARTFORD BOND INCOME STRATEGY FUND
INVESTMENT GOAL AND STYLE.
The Hartford Bond Income Strategy Fund seeks a high level of current income,
consistent with a competitive total return, as compared to bond funds with
similar investment objectives and policies, by investing primarily in debt
securities. Debt securities include (1) securities issued or guaranteed as to
principal or interest by the U.S. Government, its agencies or instrumentalities;
(2) non-convertible debt securities issued or guaranteed by U.S. corporations or
other issuers (including foreign governments or corporations); (3) asset-backed
and mortgage-related securities; and (4) securities issued or guaranteed as to
principal or interest by a sovereign government or one of its agencies or
political subdivisions, supranational entities such as development banks,
non-U.S. corporations, banks or bank holding companies, or other non-U.S.
issuers. The fund normally invests at least 70% of its portfolio in investment
grade debt securities. The fund may invest up to 30% of its total assets in
securities rated in the highest category of below investment grade bonds ("Ba1",
"Ba2" or "Ba3" by Moody's Investors Service, Inc. or "BB+", "BB" or "BB-" by
Standard & Poor's Corporation), or securities which, if unrated, are determined
by HIMCO to be of comparable quality. Securities rated below investment grade
are commonly referred to as "junk bonds".
The fund invests at least 65% of its total assets in debt securities with a
maturity of at least one year. Although the fund does not have a maximum
maturity term restriction, the fund tends to have an average maturity within the
intermediate-term range. The fund may invest up to 15% of its total assets in
preferred stocks, convertible securities, and securities accompanied by warrants
to purchase equity securities. The fund will not invest in common stocks
directly, but may retain, for reasonable periods of time, common stocks acquired
upon conversion of debt securities or upon exercise of warrants acquired with
debt securities. The fund may invest up to 30% of its total assets in debt
securities of non-U.S. 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 factors affecting this fund's performance are interest
rates and credit risk. When interest rates rise, bond prices fall; generally the
longer the fund's maturity, the more sensitive it is to this risk.
The fund could lose money if any bonds it owns are downgraded in credit rating
or go into default. In general, lower-rated bonds have higher credit risks. If
certain sectors or investments don't perform as the fund expects, it could
underperform its peers or lose money. Junk bonds and foreign securities may make
the fund more sensitive to market or economic shifts in the U.S. and abroad.
In a down market some of the fund's investments could become harder to value.
Any U.S. government guarantees on portfolio securities do not apply to the
market value or current yield of the portfolio's securities or to the value of
the fund's shares.
50
<PAGE> 178
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 the fund's performance over time (along with
that of a broad-based market index for comparison). 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 YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
11.30% 7.98%
</TABLE>
BEST QUARTER: up _____%, _________ quarter 199___
WORST QUARTER: down _____%, ____ quarter 199____
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
LEHMAN % %
GOVERNMENT
CORPORATE
BOND INDEX
</TABLE>
INDEX: Lehman Government Corporate Bond Index, an unmanaged index of
fixed-income securities.
SUB-ADVISER
HIMCO
PORTFOLIO MANAGER
Alison D. Granger
51
<PAGE> 179
- 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>
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels through at least April 30, 2001. This policy may be
discontinued at any time thereafter.
52
<PAGE> 180
EXAMPLE. This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
53
<PAGE> 181
THE HARTFORD MONEY MARKET FUND
INVESTMENT GOAL AND STYLE. The Hartford Money Market Fund seeks maximum current
income consistent with liquidity and preservation of capital.
The fund seeks to maintain a stable share price of $1.00. The fund focuses on
specific short-term U.S. 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 reduce the value of
your account.
PAST PERFORMANCE. The bar chart and table below indicate the risks of investing
in the fund. The bar chart shows how the fund's total return has varied from
year to year, while the table shows the fund's performance over time (along with
that of a broad-based market index for comparison). The bar chart year-by-year
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.
54
<PAGE> 182
CLASS Y YEAR-BY-YEAR TOTAL RETURNS BY CALENDAR YEAR
<TABLE>
<CAPTION>
97 98 99
<S> <C> <C> <C>
5.23% 5.16%
</TABLE>
BEST QUARTER: up _______%, _____ quarter 199___
WORST QUARTER: up _____%, ____quarter 199___
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING
12/31/99
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
(SINCE 7/22/96)
<S> <C> <C>
CLASS Y % %
60-DAY % %
TREASURY
BILL INDEX
</TABLE>
INDEX: 60-Day Treasury Bill Index, an unmanaged index of short-term treasury
bills.
Current 7-day yield as of December 31, 1999: ______%
Effective 7-day yield (which indicates the effect of daily compounding) as of
December 31, 1999: ____%
Please call 1-888-843-7824 for the most recent current and effective yield
information.
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
55
<PAGE> 183
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
1981
<TABLE>
<CAPTION>
SHAREHOLDER FEES CLASS Y
(fees paid directly from your investment)
<S> <C>
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 %
Total operating expenses %
Fee waiver %
Net expenses (1) %
</TABLE>
(1) HIFSCO has voluntarily agreed to limit the total operating expenses of the
fund, exclusive of taxes, interest, brokerage commissions and extraordinary
expenses, to these levels 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 and then
redeem all of your shares at the end of those periods. The example also assumes
that your investment has a 5% return each year, that the fund's operating
expenses remain the same and that you reinvest all dividends and distributions.
Because no sales charges apply to the Class Y shares you would have the same
expenses whether or not you redeemed your shares. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
<S> <C>
Year 1
Year 3
Year 5
Year 10
</TABLE>
56
<PAGE> 184
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because the mutual funds that are the subject of this prospectus (the "Retail
Funds") began operations in July, 1996, or later, they have limited operating
and performance histories. However, the Capital Appreciation Fund, International
Opportunities Fund, Stock Fund, Dividend and Growth Fund and Advisers Fund are
modeled after existing funds (the "HLS Funds") that are managed by the same
portfolio managers at HIMCO or Wellington Management and have investment
objectives, policies and strategies substantially similar to those of the
corresponding funds. Depending on the fund involved, similarity of investment
characteristics may involve factors such as industry diversification, country
diversification, portfolio beta, portfolio quality, average maturity of
fixed-income assets, equity/non-equity mixes, and individual holdings. The HLS
Funds are used as investment vehicles for the assets of variable annuity and
variable life insurance contracts issued by The Hartford affiliates. Below you
will find information about the performance of the HLS Funds
The table below sets forth each fund, its corresponding HLS Fund, and their
respective inception date 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 between a fund and the corresponding HLS Fund.
<TABLE>
<CAPTION>
Fund Corresponding HLS Fund
<S> <C>
Capital Appreciation Hartford Capital Appreciation HLS Fund, Inc.
(July 22, 1996) (April 2, 1984)
$ $
International Opportunities Hartford International Opportunities HLS Fund, Inc.
(July 22, 1996) (July 2, 1990)
$ $
Stock Hartford Stock HLS Fund, Inc.
(July 22, 1996) (August 31, 1977)
$ $
Dividend and Growth Hartford Dividend and Growth HLS Fund, Inc.
(July 22, 1996) (March 8, 1994)
$ $
Advisers Hartford Advisers HLS Fund, Inc.
(July 22, 1996) (March 31, 1983)
$ $
</TABLE>
The following table shows the average annualized total returns for the HLS Funds
for the one, three, five and ten year (or life of the HLS Fund, if shorter)
periods ended December 31, 1999. These figures are based on the actual gross
investment performance of the HLS
57
<PAGE> 185
Funds. From the gross investment performance figures, the maximum Total Fund
Operating Expenses for each fund are deducted to arrive at the net return.
Please remember that past performance is not indicative of future returns.
<TABLE>
<CAPTION>
10 YEARS OR
HLS FUND 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
-------- ------ ------- ------- ---------------
<S> <C> <C> <C> <C>
Hartford Capital Appreciation
HLS Fund, Inc. % % % %
Hartford International
Opportunities HLS Fund, Inc. % % % %
Hartford Stock HLS Fund, Inc. % % % %
Hartford Dividend and Growth
HLS Fund, Inc. % % N/A %
Hartford Advisers HLS Fund, Inc. % % % %
</TABLE>
58
<PAGE> 186
ADDITIONAL INVESTMENT MATTERS
USE OF OPTIONS AND FUTURES
Each fund (other than the Money Market fund) may purchase and sell options and
enter into futures contracts, in each case with respect to stocks, bonds, groups
of securities (such as financial indices) or foreign currencies. These
techniques permit a fund to gain exposure to a particular security or group of
securities, and thereby earn returns similar to those which would be earned by
direct investments in those securities. These techniques are also used to manage
risk by hedging a fund's portfolio investments. Use of these techniques may
result in losses to a fund or increase volatility.
USE OF MONEY MARKET INVESTMENTS FOR TEMPORARY DEFENSIVE PURPOSES
From time to time each fund (other than the Money Market fund) may invest some
or all of its assets in high quality money market securities for temporary
defensive purposes in response to adverse market, economic or political
conditions. To the extent a fund is in a defensive position, the fund may lose
the benefit of upswings and limit its ability to meet its investment objective.
ABOUT EACH FUND'S INVESTMENT GOAL
Each fund's investment goal may be changed without approval of the shareholders
of the fund. A fund may not be able to achieve its goal.
TAX CONSEQUENCES OF PORTFOLIO TRADING PRACTICES
At times each fund may engage in short-term trading, which could produce higher
brokerage expenses for a fund and higher taxable distributions to the fund's
shareholders. The funds are not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
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 by contacting the fund (see back cover for address and
phone number).
59
<PAGE> 187
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 $_______ billion in assets. As of December
31, 1999 HIFSCO had over $6 billion in assets under management. HIFSCO is
responsible for the general business management of each fund and supervises the
activities of the investment sub-advisers described below. HIFSCO is principally
located at 200 Hopmeadow Street, Simsbury, Connecticut 06070.
THE INVESTMENT SUB-ADVISERS
Wellington Management Company, LLP ("Wellington Management") is the investment
sub-adviser to the 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 $__________ 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
$_______ 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>
60
<PAGE> 188
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>
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>
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>
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 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 Capital Appreciation Fund
The Hartford Dividend and Growth Fund
The Hartford Global Leaders Fund
The Hartford Growth and Income Fund
The Hartford High Yield Fund
The Hartford International Opportunities Fund
The Hartford MidCap Fund
The Hartford Money Market Fund
The Hartford Small Company Fund
The Hartford Stock Fund
</TABLE>
(1) Fund commenced operations in 2000.
61
<PAGE> 189
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>
62
<PAGE> 190
BUYING SHARES
<TABLE>
<CAPTION>
Opening an Account Adding to an account
------------------ --------------------
<S> <C> <C>
By check
- Make out a check for the investment - Make out a check for the investment
amount, payable to "The Hartford Mutual amount, payable to "The Hartford Mutual
Funds, Inc." Funds, Inc."
- Deliver the check and your completed - Fill out the detachable investment
application to your financial slip from an account statement. If no
representative, or mail to the address slip is available, include a note
listed below. specifying the fund name, your share
class, your account number and the
name(s) in which the account is
registered.
- Deliver the check and your investment
slip or note to your financial
representative, or mail to the address
listed below.
By exchange
- Call your financial representative, - Call your financial representative,
plan administrator or the transfer plan administrator or the transfer
agent at the number below to agent at the number below to request an
request an exchange. The minimum exchange. The minimum exchange amount is
exchange amount is $500 per fund. $500 per fund.
By wire
- Deliver your completed application - Instruct your bank to wire the amount
to your financial representative, of your investment to:
or mail it to the address below. State Street Bank and Trust Company
Account # 9905-205-2
- Obtain your account number by Routing # 011000028
calling your financial Specify the fund name, your share class,
representative or the phone your account number and the name(s) in
number below. which the account is registered. Your
bank may charge a fee to wire funds.
- Instruct your bank to wire the
amount of your investment to:
State Street Bank and Trust Company
Account # 9905-205-2
Routing # 011000028
</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>
63
<PAGE> 191
<TABLE>
<S> <C> <C>
Specify the fund name, your choice
of share class, the new account
number and the name(s) in which the
account is registered. Your bank may
charge a fee to wire funds.
By phone
- See "By Wire" and "By Exchange" - Verify that your bank or credit union is a
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>
64
<PAGE> 192
SELLING SHARES
By letter
- Write a letter of instruction or complete a power of 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
- For automated service 24 hours a day using your touch-tone
phone, call the number shown below.
- To place your order with a representative, call the transfer
agent at the number below between 8 A.M. and 6 P.M. Eastern Time
on most business days.
By wire or electronic funds transfer (EFT)
- Fill out the "Telephone Exchanges and Telephone Redemption" 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.
<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>
65
<PAGE> 193
By exchange
- Obtain a current prospectus for the fund into which you 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>
<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>
66
<PAGE> 194
SELLING SHARES IN WRITING
In certain circumstances, you will need to make your request to sell shares in
writing. You may need to include additional items with your request, as shown in
the table below. You may also need to include a signature guarantee, which
protects you against fraudulent orders. You will need a signature guarantee if:
- your address of record has changed within the past 30 days
- you are selling more than $50,000 worth of shares
- you are requesting payment other than by a check mailed to the
address of record and payable to the registered owner(s)
Please note that a notary public CANNOT provide a signature guarantee. Please
check with a representative of your bank or other financial institution about
obtaining a signature guarantee.
67
<PAGE> 195
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 the 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 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 are
valued at amortized cost.
Trading on many foreign securities markets is completed at various times before
or after the close of the NYSE or on days the NYSE is not open for business.
Consequently, the calculation of a fund's NAV may take place at a time that is
different than when prices are determined for certain foreign securities. As a
result, events affecting the values of foreign portfolio securities that occur
after the close of the NYSE will not be reflected in a fund's calculation of
NAV.
BUY AND SELL PRICES
When you buy shares, you pay the NAV. When you sell shares, you receive the NAV.
EXECUTION OF REQUESTS
Each fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV to be calculated after your request is received by the transfer agent or
authorized broker-dealers and third-party administrators.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.
In unusual circumstances, any fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to three business days
or longer, as allowed by federal securities laws.
TELEPHONE TRANSACTIONS
For your protection, telephone requests may be recorded in order to verify their
accuracy. Also for your protection, telephone transactions are not permitted on
accounts whose names or addresses have changed within the past 30 days. Proceeds
from telephone transactions can only be mailed to the address of record.
EXCHANGES
You may exchange shares of one fund for shares of the same class of any other.
The registration for both accounts involved must be identical.
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
68
<PAGE> 196
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 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.
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 could be
liable for any losses or fees 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
may be canceled and the broker-dealer or financial institution could 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 reinvestment) that affects your
account balances
- - after any changes of name or address of the registered owner(s)
- - in all other circumstances, every quarter
Every year you should also receive, if applicable, a Form 1099 tax information
statement.
If you are a participant in an employer-sponsored retirement plan you will
receive statements from your plan administrator.
DIVIDENDS Each fund intends to distribute substantially all of its net income
and capital gains to shareholders at least once a year.
69
<PAGE> 197
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 you receive from a fund, whether reinvested or
taken as cash, are generally considered taxable. Dividends from a fund's
long-term capital gains are taxable as capital gains; dividends from short-term
capital gains and income are generally taxable as ordinary income. Some
dividends paid in January may be taxable as if they had been paid the previous
December. Tax rates may vary depending on how long a fund investment is held.
See your application for distribution options.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
TAXABILITY OF TRANSACTIONS Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
ADDITIONAL INVESTOR SERVICES
ELECTRONIC TRANSFERS THROUGH AUTOMATED CLEARING HOUSE ("ACH") 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.
70
<PAGE> 198
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.
71
<PAGE> 199
FINANCIAL HIGHLIGHTS
THE HARTFORD SMALL COMPANY FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.24 $10.71 $10.00
Income from Investment Operations:
Net investment income (loss) (0.03) (0.01) 0.00
Net realized and unrealized gain (loss) on
investments 1.38 2.09 1.43
---- ---- ----
Total from investment operations 1.35 2.08 1.43
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.12) (0.55) (0.72)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total distributions (0.12) (0.55) (0.72)
------ ------ ------
Net asset value, end of period $13.47 $12.24 $10.71
====== ====== ======
TOTAL RETURN 11.05% 19.69% 14.41%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $13,004 $9,062 $72
Ratio of expenses to average net assets before
waivers and reimbursements 1.02% 1.30% 115.33%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 1.00% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net
assets (0.33%) (0.14%) 0.03%(3)
Portfolio turnover rate(4) 266.82% 255.37% 69.92%(2)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
72
<PAGE> 200
FINANCIAL HIGHLIGHTS
THE HARTFORD CAPITAL APPRECIATION FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $20.05 $13.38 $10.00
Income from Investment Operations:
Net investment income (loss) (0.06) (0.03) 0.00
Net realized and unrealized gain (loss) on
investments 0.80 7.47 3.79
---- ---- ----
Total from investment operations 0.74 7.44 3.79
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains (0.13) (0.77) (0.41)
Return of capital 0.000 0.000 0.000
----- ----- -----
Total distributions (0.13) (0.77) (0.41)
------ ------ ------
Net asset value, end of period $20.66 $20.05 $13.38
======= ======= ======
TOTAL RETURN 3.68% 56.00% 37.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $27,700 $26,693 $107
Ratio of expenses to average net assets before
waivers and reimbursements 0.96% 1.13% 93.64%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.96% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net
assets (0.27%) (0.35%) 0.04%(3)
Portfolio turnover rate(4) 123.42% 119.62% 149.99%(2)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
73
<PAGE> 201
FINANCIAL HIGHLIGHTS
THE HARTFORD MIDCAP FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from Investment Operations:
Net investment income (loss) (0.02)
Net realized and unrealized gain (loss) on
investments 2.37
Total from investment operations 2.35
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital 0.000
------
Total distributions 0.00
------
Net asset value, end of period $12.35
======
TOTAL RETURN 23.62%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,750
Ratio of expenses to average net assets before
waivers and reimbursements 1.12%
Ratio of expenses to average net assets after
waivers and reimbursements 1.00%
Ratio of net investment income (loss) to average net
assets (0.33%)
Portfolio turnover rate(2) 139.02%
</TABLE>
- ----------
(1) The Fund was declared effective by the Securities and Exchange Commission on
December 31, 1997.
(2) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
74
<PAGE> 202
FINANCIAL HIGHLIGHTS
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.62 $10.73 $10.00
Income from Investment Operations:
Net investment income (loss) 0.12 0.15 0.00
Net realized and unrealized gain (loss) on
investments 1.27 (0.02) 0.84
------ ------ ------
Total from investment operations 1.39 0.13 0.84
Less distributions:
Dividends from net investment income (0.04) (0.07) (0.08)
Distributions from capital gains 0.00 (0.17) (0.03)
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.04) (0.24) (0.11)
------ ------ ------
Net asset value, end of period $11.97 $10.62 $10.73
====== ====== ======
TOTAL RETURN 13.11% 1.31% 8.36%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $10,860 $6,422 $64
Ratio of expenses to average net assets before
waivers and reimbursements 1.36% 1.76% 126.52%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 1.20% 1.20% 1.20%(3)
Ratio of net investment income (loss) to average net
assets 1.17% 1.33% 0.57%(3)
Portfolio turnover rate(4) 148.58% 59.16% 21.51%(2)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
75
<PAGE> 203
FINANCIAL HIGHLIGHTS
THE HARTFORD GLOBAL LEADERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 9/30/98-12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from Investment Operations:
Net investment income (loss) 0.01
Net realized and unrealized gain (loss) on
investments 3.03
Total from investment operations 3.04
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains (0.35)
Return of capital 0.000
------
Total distributions (0.35)
------
Net asset value, end of period $12.69
TOTAL RETURN 30.57%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $392
Ratio of expenses to average net assets before
waivers and reimbursements 2.46%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.20%(4)
Ratio of net investment income (loss) to average net
assets 0.31%(4)
Portfolio turnover rate(2) 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.
76
<PAGE> 204
FINANCIAL HIGHLIGHTS
THE HARTFORD STOCK FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $15.25 $11.55 $10.00
Income from Investment Operations:
Net investment income (loss) 0.06 0.03 0.01
Net realized and unrealized gain (loss) on
investments 4.78 3.70 1.57
------ ------ ------
Total from investment operations 4.84 3.73 1.58
Less distributions:
Dividends from net investment income 0.00 0.00 (0.03)
Distributions from capital gains (0.19) (0.03) 0.00
Return of capital (0.01) 0.000 0.000
------ ------ ------
Total distributions (0.20) (0.03) (0.03)
------ ------ ------
Net asset value, end of period $19.89 $15.25 $11.55
====== ====== ======
TOTAL RETURN 31.80% 32.33% 15.80%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $7,919 $5,510 $44
Ratio of expenses to average net assets before
waivers and reimbursements 0.96% 1.11% 133.50%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.96% 1.00% 1.00%(3)
Ratio of net investment income (loss) to average net
assets 0.36% 0.53% 1.37%(3)
Portfolio turnover rate(4) 37.03% 42.83% 11.87%(2)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
77
<PAGE> 205
FINANCIAL HIGHLIGHTS
THE HARTFORD GROWTH AND INCOME FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 4/30/98-12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from Investment Operations:
Net investment income (loss) 0.05
Net realized and unrealized gain (loss) on
investments 1.46
-------
Total from investment operations 1.51
Less distributions:
Dividends from net investment income 0.00
Distributions from capital gains 0.00
Return of capital (0.03)
-------
Total distributions (0.03)
-------
Net asset value, end of period $11.48
=======
TOTAL RETURN 15.18%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $386
Ratio of expenses to average net assets before
waivers and reimbursements 1.20%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 1.00%(4)
Ratio of net investment income (loss) to average net
assets 0.76%(4)
Portfolio turnover rate(2) 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.
78
<PAGE> 206
FINANCIAL HIGHLIGHTS
THE HARTFORD DIVIDEND AND GROWTH FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $14.77 $11.46 $10.00
Income from Investment Operations:
Net investment income (loss) 0.24 0.21 0.02
Net realized and unrealized gain (loss) on
investments 1.94 3.39 1.53
------ ------ ------
Total from investment operations 2.18 3.60 1.55
Less distributions:
Dividends from net investment income (0.19) (0.15) (0.07)
Distributions from capital gains (0.07) (0.14) (0.02)
Return of capital 0.000 (0.000 0.000
------ ------ ------
Total distributions (0.26) (0.29) (0.09)
------ ------ ------
Net asset value, end of period $16.69 $14.77 $11.46
====== ====== ======
TOTAL RETURN 14.86% 31.59% 15.49%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $17,098 $13,236 $13,241
Ratio of expenses to average net assets before
waivers and reimbursements 0.91% 1.09% 141.53%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.91% 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net
assets 1.53% 1.83% 2.41%(3)
Portfolio turnover rate(4) 46.43% 28.75% 29.80%(2)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
79
<PAGE> 207
FINANCIAL HIGHLIGHTS
THE HARTFORD ADVISERS FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.46 $11.10 $10.00
Income from Investment Operations:
Net investment income (loss) 0.29 0.31 0.03
Net realized and unrealized gain (loss) on
investments 2.59 2.32 1.16
------ ------ ------
Total from investment operations 2.88 2.63 1.19
Less distributions:
Dividends from net investment income (0.28) (0.20) (0.09)
Distributions from capital gains (0.26) (0.07) 0.00
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.54) (0.27) (0.09)
------ ------ ------
Net asset value, end of period $15.80 $13.46 $11.10
====== ====== ======
TOTAL RETURN 21.62% 23.80% 11.88%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $57,891 $39,773 $34
Ratio of expenses to average net assets before
waivers and reimbursements 0.90% 1.03% 144.82%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.90% 0.95% 0.95%(3)
Ratio of net investment income (loss) to average net
assets 2.09% 2.08% 2.75%(3)
Portfolio turnover rate(4) 40.24% 38.62% 19.75%(2)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
80
<PAGE> 208
FINANCIAL HIGHLIGHTS
THE HARTFORD HIGH YIELD FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 9/30/98-12/31/98(1)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.00
Income from Investment Operations:
Net investment income (loss) 0.21
Net realized and unrealized gain (loss) on
investments 0.13
------
Total from investment operations 0.34
Less distributions:
Dividends from net investment income (0.18)
Distributions from capital gains 0.00
Return of capital 0.000
------
Total distributions (0.18)
Net asset value, end of period $10.16
======
TOTAL RETURN 3.51%(3)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,034
Ratio of expenses to average net assets before
waivers and reimbursements 1.17%(4)
Ratio of expenses to average net assets after
waivers and reimbursements 0.95%(4)
Ratio of net investment income (loss) to average net
assets 7.48%(4)
Portfolio turnover rate(2) 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.
81
<PAGE> 209
FINANCIAL HIGHLIGHTS
THE HARTFORD BOND INCOME STRATEGY FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $10.64 $10.27 $10.00
Income from Investment Operations:
Net investment income (loss) 0.58 0.58 0.28
Net realized and unrealized gain (loss) on
investments 0.24 0.54 0.31
------ ------ ------
Total from investment operations 0.82 1.12 0.59
Less distributions:
Dividends from net investment income (0.57) (0.59) (0.26)
Distributions from capital gains (0.08) (0.16) (0.06)
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.65) (0.75) (0.32)
------ ------ ------
Net asset value, end of period $10.81 $10.64 $10.27
====== ====== ======
TOTAL RETURN 7.98% 11.30% 5.95%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $10,766 $5,756 $5
Ratio of expenses to average net assets before
waivers and reimbursements 0.84% 1.01% 185.34%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.80% 0.80% 0.80%(3)
Ratio of net investment income (loss) to average net
assets 5.48% 5.98% 6.17%(3)
Portfolio turnover rate(4) 135.01% 220.45% 75.52%(2)
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
(4) The portfolio turnover rate is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
82
<PAGE> 210
FINANCIAL HIGHLIGHTS
THE HARTFORD MONEY MARKET FUND
These tables are intended to help you understand each fund's financial
performance since inception. The total returns in the table represent the rate
an investor would have earned on an investment in each fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Arthur Andersen, LLP, whose report, along with each fund's financial
statements, are included in the annual report which is available upon request.
<TABLE>
<CAPTION>
CLASS Y - PERIOD ENDED:
12/31/99 12/31/98 12/31/97 7/1/96-12/31/96(1)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income (loss) 0.50 0.05 0.02
Net realized and unrealized gain (loss) on
investments 0.00 0.00 0.00
------ ------ ------
Total from investment operations 0.50 0.05 0.02
Less distributions:
Dividends from net investment income (0.50) (0.05) (0.02)
Distributions from capital gains 0.00 (0.00) 0.00
Return of capital 0.000 0.000 0.000
------ ------ ------
Total distributions (0.50) (0.05) (0.02)
------ ------ ------
Net asset value, end of period $1.00 $1.00 $1.00
====== ===== =====
TOTAL RETURN 5.16% 5.23% 2.34%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $5,320 $2,638 $0.3
Ratio of expenses to average net assets before
waivers and reimbursements 0.71% 0.82% 3496.38%(3)
Ratio of expenses to average net assets after
waivers and reimbursements 0.55% 0.55% 0.55%(3)
Ratio of net investment income (loss) to average net
assets 4.99% 5.13% 4.56%(3)
Portfolio turnover rate N/A N/A N/A
</TABLE>
- ----------
(1) The Funds were initially seeded on July 1, 1996 and became effective and
open for investment on July 22, 1996. The performance results reflect activity
since the Funds were opened for investment on July 22, 1996.
(2) Not annualized.
(3) Annualized.
83
<PAGE> 211
FOR MORE INFORMATION
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Additional information on each fund is contained in the financial statements and
portfolio holdings in the fund's annual and semi-annual report. In the fund's
annual report you will also find a discussion of the market conditions and
investment strategies that significantly affected performance during the last
fiscal year, and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on all aspects of the funds.
A current SAI and annual report have been filed with the Securities and Exchange
Commission and are incorporated by reference into (are legally a part of) this
prospectus.
To request a free copy of the current annual/semiannual report and/or the SAI or
for shareholder inquiries, please contact the funds at:
BY MAIL:
The Hartford Mutual Funds, Inc.
P.O. Box 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 1-800-SEC-0330.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET:
www.sec.gov
SEC FILE NUMBER: 811-07589
84
<PAGE> 212
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, MO 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> 213
TABLE OF CONTENTS PAGE
GENERAL INFORMATION.................................................. 3
INVESTMENT OBJECTIVES AND POLICIES................................... 3
MANAGEMENT OF THE COMPANY............................................ 14
INVESTMENT ADVISORY ARRANGEMENTS..................................... 22
FUND EXPENSES........................................................ 26
DISTRIBUTION ARRANGEMENTS............................................ 26
DISTRIBUTION FINANCING PLANS......................................... 29
PORTFOLIO TRANSACTIONS AND BROKERAGE................................. 31
DETERMINATION OF NET ASSET VALUE..................................... 32
PURCHASE AND REDEMPTION OF SHARES.................................... 33
INVESTMENT PERFORMANCE............................................... 36
TAXES................................................................ 44
PRINCIPAL UNDERWRITER................................................ 48
CUSTODIAN............................................................ 48
TRANSFER AGENT SERVICES.............................................. 48
INDEPENDENT PUBLIC ACCOUNTANTS....................................... 48
OTHER INFORMATION.................................................... 48
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS........................ 48
APPENDIX............................................................. 49
<PAGE> 214
GENERAL INFORMATION
The Hartford Mutual Funds, Inc. (the "Company") is an open-end
management investment company consisting of fourteen separate diversified
portfolios (each a "Fund" or together the "Funds"). The Company was organized as
a Maryland Corporation on March 21, 1996. This SAI relates to all of the Funds.
Hartford Investment Financial Services Company ("HIFSCO") is the investment
manager to each Fund. HIFSCO is an indirect majority owned subsidiary of The
Hartford Financial Services Group, Inc. ("The Hartford"), an insurance holding
company with over $130 billion in assets. In addition, 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. 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.
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").
-3-
<PAGE> 215
4. Purchase or sell real estate, except that a Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (e.g. real estate investment trusts)
(iii) invest in securities that are secured by real estate or interests therein,
(iv) purchase and sell mortgage-related securities, (v) hold and sell real
estate acquired by the Fund as a result of the ownership of securities and (vi)
invest in real estate limited partnerships.
5. Invest in commodities, except that a Fund may (i) invest in
securities of issuers that invest in commodities, and (ii) engage in permissible
options and futures transactions and forward foreign currency contracts, entered
into in accordance with the Fund's investment policies.
6. Make loans, except that a Fund (i) may lend portfolio securities in
accordance with the Fund's investment policies in amounts up to 33-1/3% of the
Fund's total assets taken at market value, (ii) enter into fully collateralized
repurchase agreements, and (iii) purchase debt obligations in which the Fund may
invest consistent with its investment policies.
7. Except for the Global Health Fund and Global Technology Fund as
described below, purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such purchase, the value of
its investments in such industry would exceed 25% of its total assets taken at
market value at the time of such investment. This limitation does not apply to
investments in obligations issued or guaranteed by the U.S. Government or any of
its agencies, instrumentalities or authorities.
In addition, each Fund, 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 "concentrated 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
25% of each fund's net assets in a particular industry or group of industries
and, with respect to 50% of each fund's assets, 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.
-4-
<PAGE> 216
The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without the approval of shareholders.
Each Fund may not:
1. Pledge, mortgage or hypothecate its assets, except to the extent
required to secure permitted borrowings. This investment restriction shall not
apply to any required segregated account or securities lending arrangements. The
deposit of underlying securities and other assets in escrow and collateral
arrangements with respect to margin for futures contracts and related options is
not deemed to be a pledge or other encumbrance.
2. Purchase any securities on margin (except that a Fund may obtain
such short-term credits as may be necessary for the clearance of purchases and
sales of portfolio securities) or make short sales of securities (except short
sales against the box) or maintain a short position. The deposit or payment by a
Fund of initial or maintenance margin in connection with futures contracts or
related options transactions is not considered the purchase of a security on
margin.
3. Purchase securities which are illiquid if, as a result of any such
purchase, more than 15% of its net assets (10% for the Money Market Fund) would
consist of such securities.
4. Purchase securities while outstanding borrowings exceed 5% of a
Fund's total assets.
5. Purchase interests in oil, gas, or other mineral exploration
programs or mineral leases; however, this policy will not prohibit the
acquisition of securities of companies engaged in the production or transmission
of oil, gas, or other minerals.
6. Invest for the purpose of exercising control over or management of
any company.
7. Borrow money, engage in reverse repurchase agreements or engage in
activities which are the economic equivalent of borrowing if the combination of
such activities exceeds 33-1/3% of a Fund's total assets.
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. 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.
-5-
<PAGE> 217
REPURCHASE AGREEMENTS A repurchase agreement is an agreement by which
the seller of a security agrees to repurchase the security sold at a mutually
agreed upon time and price. It may also be viewed as the loan of money by a Fund
to the seller. The resale price would be in excess of the purchase price,
reflecting an agreed upon market interest rate.
Each Fund is permitted to enter into fully collateralized repurchase
agreements. The Company's Board of Directors has 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 collateral will be at least equal at all times to
the total amount of the repurchase obligation, including the accrued interest.
If the seller defaults, the Fund could realize a loss on the sale of the
underlying security to the extent that the proceeds of sale including accrued
interest are less than the resale price provided in the agreement including
interest.
REVERSE REPURCHASE AGREEMENTS Each Fund may also enter into reverse
repurchase agreements. Reverse repurchase agreements involve sales by a Fund of
portfolio assets concurrently with an agreement by a Fund to repurchase the same
assets at a later date at a fixed price. Reverse repurchase agreements carry the
risk that the market value of the securities which a Fund is obligated to
repurchase may decline below the repurchase price. A reverse repurchase
agreement is viewed as a collateralized borrowing by a Fund. Borrowing magnifies
the potential for gain or loss on the portfolio securities of a Fund and,
therefore, increases the possibility of fluctuation in a Fund's net asset value.
A Fund will establish a segregated account with the Company's custodian bank in
which a Fund will maintain cash, cash equivalents, U.S. government securities or
other high quality debt securities equal in value to a Fund's obligations in
respect of reverse repurchase agreements. A Fund will not enter into reverse
repurchase transactions if the combination of all borrowings from banks and the
value of all reverse repurchase agreements for the particular Fund equals more
than 33-1/3% of the value the Fund's total assets.
DEBT SECURITIES Each Fund is permitted to invest in debt securities
including: (1) securities issued or guaranteed as to principal or interest by
the U.S. Government, its agencies or instrumentalities; (2) non-convertible debt
securities issued or guaranteed by U.S. corporations or other issuers (including
foreign governments or corporations); (3) asset-backed securities (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
-6-
<PAGE> 218
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 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.
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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.
Up to 25% of the value of the Bond Income Strategy Fund's total assets
may be applied to mortgage dollar roll transactions. In a mortgage dollar roll a
fund sells mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type, coupon
and maturity) securities on a specified future date. The Fund will engage in
"covered rolls" or, if not covered, the Fund will establish a segregated account
with the Company's custodian consisting of cash, U.S. Government securities and
other liquid, high quality debt securities. A "covered roll" is a specific type
of dollar roll for which there is an offsetting cash position or a cash
equivalent security position which matures on or before the forward settlement
date of the dollar roll transaction.
ASSET-BACKED SECURITIES The 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 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.
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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 county.
Investing in securities issued by non-U.S. issuers involves
considerations and potential risks not typically associated with investing in
obligations issued by U.S. issuers. Less information may be available about
non-U.S. issuers compared with U.S. issuers. For example, non-U.S. companies
generally are not subject to uniform accounting, auditing and financial
reporting standards or to other regulatory practices and requirements comparable
to those applicable to U.S. companies. In addition, the values of non-U.S.
securities are affected by changes in currency rates or exchange control
regulations, restrictions or prohibition on the repatriation of non-U.S.
currencies, application of non-U.S. tax laws, including withholding taxes,
changes in governmental administration or economic or monetary policy (in the
U.S. or outside the U.S.) or changed circumstances in dealings between nations.
Costs are also incurred in connection with conversions between various
currencies.
Investing in non-U.S. sovereign debt will expose a Fund to the direct
or indirect consequences of political, social or economic changes in the
developing and emerging countries that issue the securities. The ability and
willingness of sovereign obligers in developing and emerging countries or the
governmental authorities that control repayment of their external debt to pay
principal and interest on such debt when due may depend on general economic and
political conditions within the relevant country. Countries such as those in
which the Funds may invest have historically experienced, and may continue to
experience, high rates of inflation, high interest rates, exchange rate trade
difficulties and unemployment. Some of these countries are also characterized by
political uncertainty or instability. Additional factors which may influence the
ability or willingness to service debt include, but are not limited to, a
country's cash flow situation, the availability of sufficient foreign exchange
on the date a payment is due, the relative size of its debt service burden to
the economy as a whole, and its government's policy towards the IMF, the World
Bank and other international agencies.
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
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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 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.
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A Fund may write covered options only. "Covered" means that, so long as
a Fund is obligated as the writer of a call option on particular securities or
currency, it will own either the underlying securities or currency or an option
to purchase the same underlying securities or currency having an expiration date
not earlier than the expiration date of the covered option and an exercise price
equal to or less than the exercise price of the covered option, or will
establish or maintain with its custodian for the term of the option a segregated
account consisting of cash, U.S. Government securities or other liquid, high
grade debt obligations having a value equal to the fluctuating market value of
the optioned securities or currencies. A Fund will cover any put option it
writes on particular securities or currency by maintaining a segregated account
with its custodian as described above.
To hedge against fluctuations in currency exchange rates, a Fund may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. For
example, a Fund may use foreign currency futures contracts when it anticipates a
general weakening of the foreign currency exchange rate that could adversely
affect the market values of the Fund's foreign securities holdings. In this
case, the sale of futures contracts on the underlying currency may reduce the
risk of a reduction in market value caused by foreign currency variations and,
by so doing, provide an alternative to the liquidation of securities positions
in the Fund and resulting transaction costs. When the Fund anticipates a
significant foreign exchange rate increase while intending to invest in a
non-U.S. security, the Fund may purchase a foreign currency futures contract to
hedge or partially hedge against a rise in foreign exchange rates pending
completion of the anticipated transaction. Such a purchase of a futures contract
would serve as a temporary measure to protect the Fund against any rise in the
foreign exchange rate that may add additional costs to acquiring the non-U.S.
security position. The Fund similarly may use futures contracts on equity and
debt securities to hedge against fluctuations in the value of securities it owns
or expects to acquire.
The Funds also may purchase call or put options on foreign currency
futures contracts to obtain a fixed foreign exchange rate at limited risk. A
Fund may purchase a call option on a foreign currency futures contract to hedge
against a rise in the foreign exchange rate while intending to invest in a
non-U.S. security of the same currency. A Fund may purchase put options on
foreign currency futures contracts to hedge against a decline in the foreign
exchange rate or the value of its non-U.S. securities. A Fund may write a call
option on a foreign currency futures contract as a partial hedge against the
effects of declining foreign exchange rates on the value of non-U.S. securities
and in circumstances consistent with a Fund's investment objectives and
policies.
Options on indexes are settled in cash, not in delivery of securities.
The exercising holder of an index option receives, instead of a security, cash
equal to the difference between the closing price of the securities index and
the exercise price of the option. When a Fund writes a covered option on an
index, a Fund will be required to deposit and maintain with a custodian cash or
high-grade, liquid short-term debt securities equal in value to the aggregate
exercise price of a put or call option pursuant to the requirements and the
rules of the applicable exchange. If, at the close of business on any day, the
market value of the deposited securities falls below the contract price, the
Fund will deposit with the custodian cash or high-grade, liquid short-term debt
securities equal in value to the deficiency.
To the extent that a Fund enters into futures contracts, options on
futures contracts and options on foreign currencies that are traded on an
exchange regulated by the Commodities Futures Trading Commission ("CFTC"), in
each case that are not for "bona fide hedging" purposes (as defined by
regulations of the CFTC), the aggregate initial margin and premiums required to
establish those positions may not exceed 5% of the liquidation value of the
Fund's portfolio, after taking into account the unrealized profits and
unrealized losses on any such contracts the Fund has entered into. However,
options which are currently exercisable may be excluded in computing the 5%
limit. Adoption of this guideline will not limit the percentage of a Fund's
assets at risk to 5%.
Although any one Fund may not employ all or any of the foregoing
strategies, its use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve
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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 U.S. Government Securities or other liquid high
grade debt obligations having an aggregate net asset value at least equal to the
accrued excess will be maintained by the Company's custodian in a segregated
account. If a Fund enters into a swap on other than a net basis, the Fund will
maintain in the segregated account the full amount of the Fund's obligations
under each such swap. The Fund may enter into swaps, caps, collars and floors
with member banks of the Federal Reserve System, members of the New York Stock
Exchange or other entities determined by HIMCO or Wellington Management to be
creditworthy. If a default occurs by the other party to such transaction, a Fund
will have contractual remedies pursuant to the agreements related to the
transaction but such remedies may be subject to bankruptcy and insolvency laws
which could affect such Fund's rights as a creditor.
The swap market has grown substantially in recent years with a large
number of banks and financial services firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap market
has become relatively liquid. Caps, collars and floors are more recent
innovations and they are less
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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, cash, U.S. Government securities or other liquid, high-grade
debt obligations having a value equal to or greater than the Fund's purchase
commitments; likewise a Fund will segregate securities sold on a
delayed-delivery basis.
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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
HELD WITH PRINCIPAL OCCUPATIONS HELD
NAME, ADDRESS, AGE 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>
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<PAGE> 226
<TABLE>
<CAPTION>
POSITION
HELD WITH PRINCIPAL OCCUPATIONS HELD
NAME, ADDRESS, AGE 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>
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<PAGE> 227
<TABLE>
<CAPTION>
POSITION
HELD WITH PRINCIPAL OCCUPATIONS HELD
NAME, ADDRESS, AGE 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 an Executive Vice President
P.O. Box 2999 President since 1996, and as Senior Vice President and Director
Hartford, CT 06104-2999 since 1994 of the 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. Mr. Marra joined Hartford Life Insurance
Company in 1980.
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>
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<PAGE> 228
<TABLE>
<CAPTION>
POSITION
HELD WITH PRINCIPAL OCCUPATIONS HELD
NAME, ADDRESS, AGE 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 $ $0 $0 $
Winifred E. Coleman, Director $ $0 $0 $
William A. O'Neill, Director $ $0 $0 $
Millard H. Pryor, Director $ $0 $0 $
John K. Springer, Director $ $0 $0 $
</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
-17-
<PAGE> 229
(300,000,000 shares); Global Leaders Fund (300,000,000 shares); Stock Fund
(300,000,000 shares); Growth and Income Fund (300,000,000 shares); Dividend and
Growth Fund (300,000,000 shares); Advisers Fund (400,000,000 shares); High Yield
Fund (300,000,000 shares); Bond Income Strategy Fund (300,000,000 shares) and
Money Market Fund (800,000,000 shares). The Board of Directors may reclassify
authorized shares to increase or decrease the allocation of shares among the
series described above or to add any new series to the Fund. The Board of
Directors is also authorized, from time to time and without further shareholder
approval, to authorize additional shares and to classify and reclassify existing
and new series into one or more classes. Accordingly, the Directors have
authorized the issuance of four classes of shares of each of the Funds
designated in each instance as Class A, Class B, Class C and Class Y shares.
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>
<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>
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<PAGE> 230
As of January 31, 1999, the officers and directors as a group
beneficially owned less than 1% of the outstanding shares of the Company. As of
that date, the following persons held an interest in the following Funds equal
to 5% or more of outstanding shares of a class:
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
SMALL COMPANY FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
CAPITAL APPRECIATION FUND
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
MIDCAP FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
Wellington Management Retirement and
Pension Plan
Boston, MA
INTERNATIONAL OPPORTUNITIES FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
</TABLE>
-19-
<PAGE> 231
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
GLOBAL LEADERS FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Joe M. Thomson
Phoenixville, PA
Donaldson Lufkin Jenrette Securities Corp. Inc.
For the Sole Benefit of Its Customers
Jersey City, NJ
Painewebber Custodian for
H. Marie Sanderson Trustee FBO
H. Marie Sanderson Trust
Burr Ridge, IL
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
STOCK FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Planco Inc. Profit Sharing Trust
Planco Inc. Employees Discretion
Paoli, PA
Planco Inc. Profit Sharing Trust
Planco Inc. Employees Ongoing
Paoli, PA
GROWTH AND INCOME FUND
HL Investment Advisors
Hartford, CT
</TABLE>
-20-
<PAGE> 232
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
DIVIDEND AND GROWTH FUND
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
Planco Inc. Profit Sharing Trust
Planco Inc. Employees Ongoing
Paoli, PA
ADVISERS FUND
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
HIGH YIELD FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
BOND INCOME STRATEGY FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
</TABLE>
-21-
<PAGE> 233
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Salomon Smith Barney Inc.
For the Sole Benefit of Its Customers
New York, NY
J. C. Bradford & Co. Custodian for
Willie Rencher &
Nashville, TN
Bankers Trust Company, Trustee
The Hartford Investment & Savings Plan
Jersey City, NJ
MONEY MARKET FUND
HL Investment Advisors
Hartford, CT
Edward D. Jones & Co.
For the Sole Benefit of Its Customers
Maryland Heights, MO
State Street Bank & Trust Cust
403B Plan Escondido High School
FBO Patricia A. Anderson
Escondido, CA
First Clearing Corporation
Christine L. Cook IRA R/O
WFS as Custodian
Plainsboro, NJ
Linda S. Melera
Stockton, CA
Bankers Trust Company, Trustee
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
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<PAGE> 234
the general supervision of the Board of Directors and HIFSCO, is responsible for
(among other things) the day-to-day investment and reinvestment of the assets of
such Funds and furnishing each such Fund with advice and recommendations with
respect to investments and the purchase and sale of appropriate securities for
each Fund. With respect to the High Yield Fund, Bond Income Strategy Fund and
Money Market Fund, HIFSCO has entered into an investment services agreement with
HIMCO for the provision of the day-to-day investment management services.
As provided by the investment management agreement, each Fund pays
HIFSCO an investment management fee, which is accrued daily and paid monthly,
equal on an annual basis to a stated percentage of the respective Fund's average
daily net asset value. HIFSCO, not any Fund, pays the subadvisory fees to
Wellington Management and HIMCO.
No person other than HIMCO or Wellington Management and their directors
and employees regularly furnishes advice to the Funds with respect to the
desirability of the Funds investing in, purchasing or selling securities. HIMCO
and Wellington Management may from time 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
Capital Appreciation Fund
MidCap Fund
International Opportunities Fund
Global Leaders Fund
Stock Fund
Growth and Income Fund
Dividend and Growth Fund
Advisers Fund
High Yield Fund
Bond Income Strategy Fund
Money Market Fund
</TABLE>
(1) Fund commenced operation in 2000.
-23-
<PAGE> 235
<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
Capital Appreciation Fund $4,745,355
MidCap Fund $162,458
International Opportunities Fund $367,845
Global Leaders Fund $8,591(3)
Stock Fund $2,072,900
Growth and Income Fund $43,952(2)
Dividend and Growth Fund $1,667,617
Advisers Fund $2,704,478
High Yield Fund $22,100(3)
Bond Income Strategy Fund $365,863
Money Market Fund $192,694
</TABLE>
(1) Fund commenced operation in 2000.
(2) From inception date (April 30, 1998) through December 31, 1998.
(3) From inception date (September 30, 1998) through December 31, 1998.
<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
Capital Appreciation Fund $1,183,411
MidCap Fund N/A
International Opportunities Fund $133,737
Global Leaders Fund N/A
Stock Fund $316,618
Growth and Income Fund N/A
Dividend and Growth Fund $326,978
Advisers Fund $675,902
High Yield Fund N/A
Bond Income Strategy Fund $153,486
Money Market Fund $108,150
</TABLE>
(1) Fund commenced operation in 2000.
HIFSCO has voluntarily and temporarily 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:
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<PAGE> 236
<TABLE>
<CAPTION>
FUND NAME CLASS A CLASSES B & C
- --------- ------- -------------
<S> <C> <C>
Global Health Fund
Global Technology Fund
Small Company Fund 1.45% 2.15%
Capital Appreciation Fund 1.45% 2.15%
MidCap Fund 1.45% 2.15%
Stock Fund 1.45% 2.15%
Growth and Income Fund 1.45% 2.15%
Dividend and Growth Fund 1.45% 2.15%
Advisers Fund 1.40% 2.10%
International Opportunities Fund 1.65% 2.35%
Global Leaders Fund 1.65% 2.35%
Bond Income Strategy Fund 1.25% 1.95%
Money Market Fund 1.00% 1.70%
</TABLE>
Pursuant to the investment management agreement, investment subadvisory
agreement and investment services agreement, neither HIFSCO, Wellington
Management nor HIMCO is liable to the Funds or their shareholders for any error
of judgment or mistake of law or for any loss suffered by the Funds in
connection with the matters to which their respective agreements relate, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of HIFSCO, HIMCO or Wellington Management in the performance of their
duties or from their reckless disregard of the obligations and duties under the
applicable agreement. Wellington Management has agreed to indemnify HIFSCO to
the fullest extent permitted by law against any and all loss, damage, judgment,
fines, amounts paid in settlement and attorneys' fees incurred by HIFSCO to the
extent resulting in whole or in part from any of Wellington Management's acts or
omissions related to the performance of its duties as set forth specifically in
the respective subadvisory investment agreement or otherwise from Wellington
Management's willful misfeasance, bad faith or gross negligence.
HIFSCO, 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 $_____ 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 $_______ 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
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<PAGE> 237
Wellington Management, and by Wellington Management upon 90 days' written notice
to HIFSCO (with respect to that Fund only). The investment services agreement
may be terminated at any time without the payment of any penalty by the Board of
Directors or by vote of a majority of the outstanding voting securities of the
respective Fund, by HIFSCO upon 60 days' notice to HIMCO and by HIMCO upon 90
days' written notice to HIFSCO(with respect to that Fund only). The subadvisory
investment agreement and investment services agreement terminate automatically
upon the termination of the corresponding investment advisory agreement.
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 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
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<PAGE> 238
Payments may take the form of "due diligence" payments for a broker's
examination of the Funds and payments for providing extra employee training and
information relating to the Funds; "listing" fees for the placement of the Funds
on a dealer's list of mutual funds available for purchase by its customers;
"finders" or "referral" fees for directing investors to the Funds; "marketing
support" fees for providing assistance in promoting the sale of the Funds'
shares; and payments for the sale of shares and/or the maintenance of share
balances. In addition, HIFSCO and its affiliates make Additional Payments for
subaccounting, administrative and/or shareholder processing services that are in
addition to the shareholder servicing and processing fees paid by the Funds. The
Additional Payments may be a fixed dollar amount, may be based on the number of
customer accounts maintained by a broker or financial institution, or may be
based on a percentage of the value of shares sold to, or held by, customers of
the brokers or financial institutions involved. Furthermore, and subject to NASD
regulations, HIFSCO and its affiliates may contribute to various non-cash and
cash incentive arrangements to promote the sale of shares, as well as sponsor
various educational programs, sales contests and/or promotions in which
participants may receive prizes such as travel awards, merchandise and cash
and/or investment research pertaining to particular securities and other
financial instruments or to the securities and financial markets generally,
educational information and related support materials and hardware and/or
software. HIFSCO and its affiliates may also pay for the travel expenses, meals,
lodging and entertainment of brokers or financial institutions and their
salespersons and guests in connection with education, sales and promotional
programs, subject to applicable NASD regulations. These programs, which may be
different for different broker-dealers or financial institutions, will not
change the price an investor will pay for shares or the amount that a fund will
receive from such sale. For the fiscal year ended December 31, 1999, HIFSCO or
its affiliates paid $__________________ 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
Class B
Class C
Class Y N/A N/A N/A N/A
1998
Class A
Class B
Class C
Class Y N/A N/A N/A N/A
1997
Class A
Class B
Class C
Class Y N/A N/A N/A N/A
</TABLE>
Generally commissions are reallowed to broker-dealers as follows:
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<PAGE> 239
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%
$250,000 or more but less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but less than $1 million 2.00% 2.04% 1.75%
$1 million or more 0% 0% 0%
</TABLE>
The Bond Income Strategy Fund and High Yield Fund
<TABLE>
<CAPTION>
FRONT-END SALES FRONT-END SALES
CHARGE AS A CHARGE AS A COMMISSION AS
PERCENTAGE OF PERCENTAGE OF 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 million 2.00% 2.04% 1.75%
$1 million or more 0% 0% 0%
</TABLE>
The Class A shares of the Money Market Fund do not collect an up-front
sales charge.
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
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<PAGE> 240
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 PLANS
The Company has adopted separate distribution plans (the "Plans") for
Class A, Class B and Class C shares of each Fund pursuant to appropriate
resolutions of the Company's Board of Directors in accordance with the
requirements of Rule 12b-1 under the 1940 Act and the requirements of the
applicable rule of the NASD regarding asset based sales charges.
CLASS A PLAN Pursuant to the Class A Plan, a Fund may compensate HIFSCO
for its expenditures in financing any activity primarily intended to result in
the sale of Fund shares and for maintenance and personal service provided to
existing Class A shareholders. The expenses of a Fund pursuant to the Class A
Plan are accrued on a fiscal year basis and may not exceed, with respect to the
Class A shares of each Fund, the annual rate of 0.35% of the Fund's average
daily net assets attributable to Class A shares. Up to 0.25% of the fee may be
used for shareholder servicing expenses with the remainder used for distribution
expenses. All or any portion of this fee may be remitted to brokers who provide
distribution or shareholder account services.
CLASS B PLAN Pursuant to the Class B Plan, a Fund may pay HIFSCO a fee
of up to 1.00% of the average daily net assets attributable to Class B shares,
0.75% of which is a fee for distribution financing activities and 0.25% of which
is for shareholder account services. All or any portion of such fees may be
remitted to brokers who assist in the distribution of Class B shares or provide
maintenance and personal services to existing Class B shareholders. HIFSCO will
advance to dealers the first-year service fee at a rate equal to 0.25% of the
amount invested. As compensation for such advance, HIFSCO may retain the service
fee paid by a Fund with respect to such shares for the first year after
purchase. Dealers will become eligible for additional service fees with respect
to such shares commencing in the thirteenth month following purchase. Brokers
may from time to time be required to meet certain other criteria in order to
receive service fees. HIFSCO or its affiliates are entitled to retain all
service fees payable under the Class B Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by HIFSCO or its affiliates for shareholder accounts. The Class B Plan
also provides that HIFSCO will receive all contingent deferred sales charges
attributable to Class B shares.
CLASS C PLAN Pursuant to the Class C Plan, a Fund may pay HIFSCO a fee
of up to 1.00% of the average daily net assets attributable to Class C shares,
0.75% of which is a fee for distribution 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
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<PAGE> 241
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.
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
Capital Appreciation Fund
MidCap Fund
International Opportunities Fund
Global Leaders Fund
Stock Fund
Growth and Income Fund
Dividend and Growth Fund
Advisers Fund
High Yield Fund
</TABLE>
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<PAGE> 242
Bond Income Strategy Fund
Money Market Fund
(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 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 sub-investment advisory agreement. The expenses of HIMCO and
Wellington Management will not necessarily be reduced as a result of the receipt
of such supplemental information. HIMCO and Wellington Management may use such
supplemental research in providing investment advice to portfolios other than
those for which the transactions are made. Similarly, the Funds may benefit from
such research obtained by HIMCO and Wellington Management for portfolio
transactions for other clients.
Investment decisions for the Funds will be made independently from
those of any other clients that may be (or in the future may be) managed by
HIMCO, Wellington Management or their affiliates. If, however, accounts managed
by HIMCO or Wellington Management are simultaneously engaged in the purchase of
the same security, then, pursuant to general authorization of the Company's
Board of Directors, available securities may be allocated to each Fund or other
client account and may be averaged as to price in whatever manner HIMCO or
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).
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<PAGE> 243
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) -- -- --
Capital Appreciation Fund $1,918,244 $748,835
MidCap Fund $69,953 N/A
International Opportunities Fund $323,177 $111,809
Global Leaders Fund $8,170(2) N/A
Stock Fund $438,905 $78,586
Growth and Income Fund $9,411(3) N/A
Dividend and Growth Fund $384,710 $101,358
Advisers Fund $319,625 $95,434
High Yield Fund N/A N/A
Bond Income Strategy Fund N/A N/A
Money Market Fund 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 obtaining best prices
and executions, effected through dealers who sell shares of the funds.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of each Fund is determined by
Hartford Life Insurance Company, ("Hartford Life") an affiliate of The Hartford,
in the manner described in the Funds' Prospectus. The Funds will be closed for
business and will not price their shares on the following business holidays: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and other holidays
observed by the New York Stock Exchange. Securities held by each Fund other than
the Money Market Fund will be valued as follows: Debt securities (other than
short-term obligations) are valued on the basis of valuations furnished by an
unaffiliated pricing service which determines valuations for normal
institutional size trading units of debt securities. Short-term securities held
in the Money Market Fund are valued at amortized cost or original cost plus
accrued interest receivable, both of which approximate market value. All other
Funds' short-term investments with a maturity of 60 days or less when purchased
are valued at amortized cost, which approximates market value. Short-term
investments with a maturity of more than 60 days when purchased are valued based
on market quotations until the remaining days to maturity become less than 61
days. From such time until maturity, the investments are valued at amortized
cost.
Equity securities are valued at the last sales price reported on
principal securities exchanges (domestic or foreign). If no sale took place on
such day and in the case of certain equity securities traded over-the-counter,
then such securities are valued at the mean between the bid and asked prices.
Securities quoted in foreign currencies are translated into U.S. dollars at the
exchange rate at the end of the reporting period. Options are valued at the last
sales price; if no sale took place on such day, then options are valued at the
mean between the bid and asked prices. Securities for which market quotations
are not readily available and all other assets are valued in good faith at fair
value by, or under guidelines established by, the Funds' Board of Directors.
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<PAGE> 244
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.
PURCHASE AND REDEMPTION OF SHARES
For information regarding the purchase of Fund shares, see "About Your
Account -- Buying Shares" in the Funds' Prospectus.
For a description of how a shareholder may have a Fund redeem his/her
shares, or how he/she may sell shares, see "About Your Account -- Selling
Shares" in the Funds' Prospectus.
RIGHTS OF ACCUMULATION Each Fund offers to all qualifying investors
Rights of Accumulation under which investors are permitted to purchase Class A
shares of any Funds of the Company at the price applicable to the total of (a)
the dollar amount then being purchased plus (b) an amount equal to the then
current net asset value of the purchaser's holdings of all shares of any Funds
of the Company and the current account value of the Director variable annuity or
variable life contracts issued by affiliates of The Hartford. For purposes of
the rights of accumulation program, the purchaser may include all shares owned
by family members. A family member is a spouse, parent, grandparent, child,
grandchild, brother, sister, step-family members and in-laws. Acceptance of the
purchase order is subject to confirmation of qualification. The rights of
accumulation may be amended or terminated at any time as to 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
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<PAGE> 245
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 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
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<PAGE> 246
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 representing an increase over the cost paid, (2)
shares acquired through reinvestment of dividends and capital gains
distributions, (3) shares held for over 6 years and (4) 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,
- - 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
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<PAGE> 247
or holidays, or trading on the NYSE is restricted, or for any period during
which an emergency exists as a result of which (1) disposal by a Fund of
securities owned by it is not reasonably practicable, or (2) it is not
reasonably practicable for a Fund to fairly determine the value of its assets,
or for such other periods as the Securities and Exchange Commission may permit
for the protection of investors.
INVESTMENT PERFORMANCE
MONEY MARKET FUND
In accordance with regulations prescribed by the SEC, the Company is
required to compute the Money Market Fund's current annualized yield for a
seven-day period in a manner which does not take into consideration any realized
or unrealized gains or losses on its portfolio securities. This current
annualized yield is computed by determining the net change (exclusive of
realized gains and losses on the sale of securities and unrealized appreciation
and depreciation) in the value of a hypothetical account having a balance of one
share of the Money Market Fund at the beginning of such seven-day period,
dividing such net change in account value by the value of the account at the
beginning of the period to determine the base period return and annualizing this
quotient on a 365-day basis.
The SEC also permits the Company to disclose the effective yield of the
Money Market Fund for the same seven-day period, determined on a compounded
basis. The effective yield is calculated by compounding the unannualized base
period return by adding one to the base period return, raising the sum to a
power equal to 365 divided by 7, and subtracting one from the result.
For the seven-day period ending December 31, 1999, the Money Market
Fund's annualized yield for Class A, Class B, Class C and Class Y shares was
____%, ____%, ____% and ____% respectively. For the same period, the effective
yield for Class A, Class B, Class C and Class Y shares was ____%, ____%, ____%
and ____% respectively.
The yield on amounts held in the Money Market Fund normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Money Market Fund's actual yield is affected by changes in interest
rates on money market securities, average portfolio maturity of the Money Market
Fund, the types and quality of portfolio securities held by the Money Market
Fund, and its operating expenses.
OTHER FUNDS
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS Average annual
total return quotations for Class A, Class B, Class C and Class Y shares are
computed by finding the average annual compounded rates of return that would
cause a hypothetical investment made on the first day of a designated period to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)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)
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<PAGE> 248
The computation above assumes that all dividends and distributions made
by a Fund are reinvested at net asset value during the designated period. The
average annual total return quotation is determined to the nearest 1/100 of 1%.
One of the primary methods used to measure performance is "total
return." "Total return" will normally represent the percentage change in value
of a class of a Fund, or of a hypothetical investment in a class of a Fund, over
any period up to the lifetime of the class. Unless otherwise indicated, total
return calculations will assume the deduction of the maximum sales charge and
usually assume the reinvestment of all dividends and capital gains distributions
and will be expressed as a percentage increase or decrease from an initial
value, for the entire period or for one or more specified periods within the
entire period. Total return calculations that do not reflect the reduction of
sales charges will be higher than those that do reflect such charges.
Total return percentages for periods longer than one year will usually
be accompanied by total return percentages for each year within the period
and/or by the average annual compounded total return for the period. The income
and capital components of a given return may be separated and portrayed in a
variety of ways in order to illustrate their relative significance. Performance
may also be portrayed in terms of cash or investment values, without
percentages. Past performance cannot guarantee any particular future result. In
determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts are taken
into consideration. For any account fees that vary with the size of the account,
the account fee used for purposes of the above computation is assumed to be the
fee that would be charged to the mean account size of a class of the Fund.
Each Fund's average annual total return quotations and yield quotations
as they may appear in the Prospectus, this SAI or in advertising are calculated
by standard methods prescribed by the SEC.
The charts below set forth certain performance information as of
December 31, 1999 for the Class A, Class B, Class C and Class Y shares of each
Fund, except as noted, which is adjusted to reflect the maximum sales charge and
the account fees of each Class. Past performance is no guarantee and is not
necessarily indicative of future performance of the shares. The actual annual
returns for the shares may vary significantly from the past and future
performance. Investment returns and the value of the shares will fluctuate in
response to market and economic conditions as well as other factors and shares,
when redeemed, may be worth more or less than their original cost. Total returns
are based on capital changes plus reinvestment of all distributions for the time
periods noted in the charts below. Total return of the shares would have been
lower without the expense limitation effected by HIFSCO.
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Small Company Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
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<PAGE> 249
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Capital Appreciation Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the MidCap Fund
(Date of Inception: Class A, Class B and Class Y Shares, December 31, 1997;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the International Opportunities
Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
-38-
<PAGE> 250
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
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Stock Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Share, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the 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
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
-39-
<PAGE> 251
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Dividend and Growth Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Advisers Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the 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
Class B Shares
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B, Class C and Class Y Shares of the Bond Income Strategy Fund
(Date of Inception: Class A, Class B and Class Y Shares, July 22, 1996;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
</TABLE>
-40-
<PAGE> 252
<TABLE>
<S> <C> <C> <C> <C>
Class C Shares
Class Y Shares N/A N/A
</TABLE>
Average annual total return based on the value of a $1,000 Investment in the
Class A, Class B and Class Y Shares of the Money Market Fund
(Date of Inception: Class A and Class Y Shares, July 22, 1996;
Class B Shares, August 22, 1997;
Class C Shares, July 31, 1998):
<TABLE>
<CAPTION>
One Year Since Inception
-------------------------------- -------------------------------
Total Return Total Return Total Return Total Return
------------- ------------- ------------- -------------
(excluding (including (excluding (including
sales charge) sales charge) sales charge) sales charge)
<S> <C> <C> <C> <C>
Class A Shares
Class B Shares
Class C Shares
Class Y Shares N/A 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 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:
a-b
2[(-----) + 1)6 - 1]
cd
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
-41-
<PAGE> 253
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
____%, ____%, ____% and ____% respectively. For that same period, the 30-day
yield for the Class A, Class B, Class C and Class Y shares of the High Yield
Fund was ____%, ____%, ____% and ____% respectively.
NON-STANDARDIZED PERFORMANCE In addition, in order to more completely
represent a Fund's performance or more accurately compare such performance to
other measures of investment return, a Fund also may include in advertisements,
sales literature and shareholder reports other total return performance data
("Non-Standardized Return"). Non-Standardized Return may be quoted for the same
or different periods as those for which Standardized Return is quoted; it may
consist of an aggregate or average annual percentage rate of return, actual
year-by-year rates or any combination thereof. Non-Standardized Return may or
may not take sales charges into account; performance data calculated without
taking the effect of sales charges into account will be higher than data
including the effect of such charges. All non-standardized performance will be
advertised only if the standard performance data for the same period, as well as
for the required periods, is also presented.
GENERAL INFORMATION From time to time, the Funds may advertise their
performance compared to similar funds using certain unmanaged indices, reporting
services and publications. Descriptions of some of the indices which may be used
are listed below.
The Standard & Poor's MidCap 400 Index is designed to represent price
movements in the mid cap U.S. equity market. It contains companies chosen by the
Standard & Poors Index Committee for their size, liquidity and industry
representation. None of the companies in the S&P 400 overlap with those in the
S&P 500 Index or the S&P 600 Index. Decisions about stocks to be included and
deleted are made by the Committee which meets on a regular basis. S&P 400 stocks
are market cap weighted; each stock influences the Index in proportion to its
relative market cap. REITs are not eligible for inclusion.
The Standard & Poor's 500 Composite Stock Price Index is a well
diversified list of 500 companies representing the U.S. Stock Market.
The Standard and Poor's Small Cap 600 index is designed to represent
price movements in the small cap U.S. equity market. It contains companies
chosen by the Standard & Poors Index Committee for their size, industry
characteristics, and liquidity. None of the companies in the S&P 600 overlap
with the S&P 500 or the S&P 400 (MidCap Index). The S&P 600 is weighted by
market capitalization. REITs are not eligible for inclusion.
The NASDAQ Composite OTC Price Index is a market value-weighted and
unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks.
The Lehman Government Bond Index is a measure of the market value of
all public obligations of the U.S. Treasury; all publicly issued debt of all
agencies of the U.S. Government and all quasi-federal corporations; and all
corporate debt guaranteed by the U.S. Government. Mortgage backed securities,
bonds and foreign targeted issues are not included in the Lehman Government
Index.
The Lehman Government/Corporate Bond Index is a measure of the market
value of approximately 5,300 bonds with a face value currently in excess of $1.3
trillion. To be included in the Lehman Government/Corporate Index, an issue must
have amounts outstanding in excess of $1 million, have at least one year to
maturity and be rated "Baa" or higher ("investment grade") by a nationally
recognized rating agency.
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<PAGE> 254
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, 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.,
-43-
<PAGE> 255
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.
TAXES
Each Fund is treated as a separate entity for accounting and tax
purposes. Each Fund has qualified and elected or intends to qualify and elect to
be treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), and intends to continue
to so qualify in the future. As such and by complying with the applicable
provisions of the Code regarding the sources of its income, the timing of its
distributions, and the diversification of its assets, each Fund will not be
subject to federal income tax on taxable income (including net short-term and
long-term capital gains) which is distributed to shareholders at least annually
in accordance with the timing requirements of the Code.
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<PAGE> 256
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
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<PAGE> 257
income, and whether exchanges of debt obligations in a workout context are
taxable. These and other issues will be addressed by any Fund that may hold such
obligations in order to reduce the risk of distributing insufficient income to
preserve its status as a regulated investment company and seek to avoid becoming
subject to federal income or excise tax.
Limitations imposed by the Code on regulated investment companies like
the Funds may restrict a Fund's ability to enter into futures, options, and
forward transactions.
Certain options, futures and forward foreign currency transactions
undertaken by a Fund may cause the Fund to recognize gains or losses from
marking to market even though its positions have not been sold or terminated and
affect the character as long-term or short-term (or, in the case of certain
currency forwards, options and futures, as ordinary income or loss) and timing
of some capital gains and losses realized by the Fund. Also, certain of a Fund's
losses on its transactions involving options, futures or forward contracts
and/or offsetting portfolio positions may be deferred rather than being taken
into account currently in calculating the Fund's taxable income. Certain of the
applicable tax rules may be modified if a Fund is eligible and chooses to make
one or more of certain tax elections that may be available. These transactions
may therefore affect the amount, timing and character of a Fund's distributions
to shareholders. The Funds will take into account the special tax rules
(including consideration of available elections) applicable to options, futures
or forward contracts in order to minimize any potential adverse tax
consequences.
The federal income tax rules applicable to interest rate swaps, caps
and floors are unclear in certain respects, and a Fund may be required to
account for these transactions in a manner that, in certain circumstances, may
limit the degree to which it may utilize these transactions.
A Fund may recognize gain with respect to appreciated stock, debt, and
partnership interests upon entering into short sales, offsetting notional
principal contracts, futures, forwards, and options with respect to the same or
substantially identical property.
Distributions from a Fund's current or accumulated earnings and profits
("E&P"), as computed for federal income tax purposes, will be taxable as
described in the Funds' prospectus 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
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<PAGE> 258
realized on a redemption or exchange will be disallowed to the extent the shares
disposed of are replaced with shares of the same Fund within a period of 61 days
beginning 30 days before and ending 30 days after the shares are disposed of,
such as pursuant to an election to reinvest dividends or capital gain
distributions automatically. In such a case, the basis of the shares acquired
will be adjusted to reflect the disallowed loss. Any loss realized upon the
redemption of shares with a tax holding period of six months or less will be
treated as a long-term capital loss to the extent of any amounts treated as
distributions of long-term capital gain with respect to such shares.
For purposes of the dividends received deduction available to
corporations, dividends received by a Fund, if any, from U.S. domestic
corporations in respect of the stock of such corporations held by the Fund, for
federal income tax purposes, for at least 46 days during the 90-day period that
begins 45 days before the stock becomes ex-dividend and distributed and
designated by the Fund may be treated as qualifying dividends. The holding
period for dividends on preferred stock is 91 days during the 180-day period
that begins 90 days before the stock becomes ex-dividend. Corporate shareholders
must meet the minimum holding period requirement stated above (46 or 91 days)
with respect to their shares of the applicable Fund in order to qualify for the
deduction and, if they borrow to acquire such shares, may be denied a portion of
the dividends received deduction. The entire qualifying dividend, including the
otherwise deductible 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.
-47-
<PAGE> 259
PRINCIPAL UNDERWRITER
HIFSCO, the investment manager of each Fund, also serves as the
principal underwriter. HIFSCO is located at 200 Hopmeadow Street, Simsbury,
Connecticut 06070.
CUSTODIAN
Portfolio securities of each Fund are held pursuant to a Custodian
Agreement between the Company and State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110.
TRANSFER AGENT SERVICES
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 statement highlights
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said report. The
principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
OTHER INFORMATION
The Hartford has granted the Company the right to use the name, "The
Hartford" or "Hartford", and has reserved the right to withdraw its consent to
the use of such name by the Company and the Funds at any time, or to grant the
use of such name to any other company.
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
The financial statements and financial highlights of the Company as of
and for the year ended December 31, 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.
-48-
<PAGE> 260
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.
<PAGE> 261
AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from AAA issues only in small degree.
A - Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the considerable
investment strength but are not entirely free from adverse effects of changes in
circumstances and economic conditions than debt in the highest rated categories.
BBB - Bonds rated BBB and regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category then in higher rated categories.
BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC, and C is regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.
RATING OF COMMERCIAL PAPER
Purchases of corporate debt securities used for short-term investment,
generally called commercial paper, will be limited to the top two grades of
Moody's, Standard & Poor's, Duff & Phelps, Fitch Investor Services and Thomson
Bank Watch or other NRSROs (nationally recognized statistical rating
organizations) rating services and will be an eligible security under Rule 2a-7.
MOODY'S
Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
- - Leading market positions in well-established industries.
- - 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
<PAGE> 262
The relative strength or weakness of the following factors determines whether
the issuer's commercial paper is rated A-1 or A-2.
- - Liquidity ratios are adequate to meet cash requirements.
Liquidity ratios are basically as follows, broken down by the type of
issuer:
Industrial Company: acid test ratio, cash flow as a percent of current
liabilities, short-term debt as a percent of current liabilities,
short-term debt as a percent of current assets.
Utility: current liabilities as a percent of revenues, cash flow as a
percent of current liabilities, short-term debt as a percent of
capitalization.
Finance Company: current ratio, current liabilities as a percent of net
receivables, current liabilities as a percent of total liabilities.
- - The long-term senior debt rating is "A" or better; in some instances
"BBB" credits may be allowed if other factors outweigh the "BBB".
- - 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> 263
THE HARTFORD MUTUAL FUNDS, INC.
PART C - OTHER INFORMATION
Item 23.
a. Articles of Incorporation(1)
b. By-Laws(1)
c. Not Applicable
d.(i) Form of Investment Advisory Agreement(1)
d.(ii) Form of Sub-Advisory Agreement(1)
d.(iii) Investment Management Agreement with Hartford Investment
Financial Services Company(3)
d.(iv) Investment Sub-Advisory Agreement with Wellington Management
Company LLP(3)
d.(v) Investment Services Agreement with The Hartford Investment
Management Company(3)
d.(vi) Form of Amendment Number 1 to Investment Management
Agreement(4)
d.(vii) Form of Amendment Number 1 to Sub-Advisory Agreement between
Hartford Investment Financial Services Company and Wellington
Management Company LLP(4)
d.(viii) Form of Amendment Number 2 to Investment Management
Agreement(5)
d.(ix) Form of Amendment Number 2 to Sub-Advisory Agreement between
Hartford Investment Financial Services Company and Wellington
Management Company LLP(5)
d.(x) Form of Amendment Number 1 to Investment Services Agreement
with The Hartford Investment Management Company(8)
d.(xi) Form of Amendment Number 3 to Investment Management
Agreement(8)
- -----------------------------
(1) Filed with Registrant's Initial Registration Statement on April 9, 1996.
(2) Filed with Registrant's Pre-Effective Amendment #1 on June 27, 1996.
(3) Filed with Registrant's Post-Effective Amendment #3 on June 20, 1997.
(4) Filed with Registrant's Post-Effective Amendment #4 on October 16, 1997.
(5) Filed with Registrant's Post-Effective Amendment #5 on February 6, 1998.
(6) Filed with Registrant's Post-Effective Amendment #6 on April 24, 1998.
(7) Filed with Registrant's Post-Effective Amendment #7 on May 13, 1998.
(8) Filed with Registrant's Post-Effective Amendment #9 on July 15, 1998.
(9) Incorporated by reference to Registrant's filing pursuant to Rule 30d-1 of
the Investment Company Act of 1940.
(10) Incorporated by reference to Registrant's amended NSAR-B filed on April 13,
1999.
(11) Filed with Registrant's Post-Effective Amendment #12 on April 26, 1999.
(12) To be provided by amendment.
<PAGE> 264
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
d.(xiv) Form of Amendment Number 4 to Sub-Advisory Agreement between
Hartford Investment Financial Services Company and Wellington
Management Company LLP
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
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
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
i. Opinion and Consent of Counsel(12)
j. Consent of Independent Public Accountants(11)
k. 1998 Annual Report to Shareholders' Financial Statements(9)
l. Not Applicable
m.(i) Form of Rule 12b-1 Distribution Plan for Class A Shares(1)
m.(ii) Form of Rule 12b-1 Distribution Plan for Class B Shares(1)
m.(iii) Form of Rule 12b-1 Distribution Plan for Class C Shares(7)
m.(iv) Form of Amended Rule 12b-1 Distribution Plan for Class A
Shares(4)
m.(v) Form of Amended Rule 12b-1 Distribution Plan for Class B
Shares(4)
m.(vi) Form of Amendment Number 1 to Amended and Restated Rule 12b-1
Distribution Plan for Class A Shares(5)
m.(vii) Form of Amendment Number 1 to Amended and Restated Rule 12b-1
Distribution Plan for Class B Shares(5)
m.(viii) Form of Amendment Number 2 to Amended and Restated Rule 12b-1
Distribution Plan for Class A Shares(8)
m.(ix) Form of Amendment Number 2 to Amended and Restated Rule 12b-1
Distribution Plan for Class B Shares(8)
m.(x) Form of Amendment Number 1 to Rule 12b-1 Distribution Plan for
Class C Shares(8)
<PAGE> 265
m.(xi) Form of Amendment Number 3 to Amended and Restated Rule 12b-1
Distribution Plan for Class A Shares
m.(xii) Form of Amendment Number 3 to Amended and Restated Rule 12b-1
Distribution Plan for Class B Shares
m.(xiii) Form of Amendment Number 2 to Rule 12b-1 Distribution Plan for
Class C Shares 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
p. Powers of Attorney
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 Chief President of Hartford Life, Inc.(1)
Executive Officer
Thomas M. Marra Executive Vice Executive Vice President of Hartford
President-Sales and Life, Inc.
Distribution
David Znamierowski Senior Vice Senior Vice President of
President-Investments Hartford Life, Inc.
</TABLE>
<PAGE> 266
<TABLE>
<S> <C> <C>
Peter W. Cummins Senior Vice President-Sales Senior Vice President of
and Distribution Hartford Life, Inc.
Andrew W. Kohnke Senior Vice Managing Director and Director of
President-Investments Hartford Investment Management Company
("HIMCO")(2)
Lynda Godkin Senior Vice President - Senior Vice President and General Counsel
Secretary and General Counsel of Hartford Life, Inc.
David Foy Senior Vice President - Chief Financial Officer of Hartford Life,
Treasurer Inc.
George R. Jay Controller Assistant Vice President of Hartford
Life, Inc.
David N. Levenson Vice President Vice President of Hartford Life, Inc.
David A. Carlson Vice President and Director Vice President and Director of Taxes of
of Taxes Hartford Life, Inc.
Mark E. Hunt Vice President Vice President of Hartford Life Insurance
Company(3)
</TABLE>
(1) The principal business address for Hartford Life, Inc. is 200
Hopmeadow Street, Simsbury, CT 06070.
(2) The principal business address for HIMCO is 55 Farmington Avenue,
Hartford, CT 06105.
(3) The principal business address for Hartford Life Insurance Company
is 200 Hopmeadow Street, Simsbury, CT 06070.
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 Position with HIFSO Position with the 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
</TABLE>
<PAGE> 267
<TABLE>
<S> <C> <C>
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>
Item 28. Location of Accounts and Records.
Books or other documents required to be maintained by the Registrant by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are maintained by the Registrant's custodian, State Street Bank and
Trust Company, 225 Franklin Street, Boston, MA 02110 and the Registrant's
transfer agent, Boston Financial Data Services, Inc., 66 Brooks Drive,
Braintree, MA 02184. Registrant's financial ledgers and other corporate records
are maintained at its offices at the Hartford Life Insurance Companies, 200
Hopmeadow Street, Simsbury, CT 06089.
Item 29. Management Services
Not Applicable
Item 30. Undertakings.
Not Applicable
<PAGE> 268
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on the 1st day of
February, 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 February 1, 2000
- ---------------------------------------
David M. Znamierowski (Chief Executive Officer
& Director)
* Controller & Treasurer February 1, 2000
- ---------------------------------------
George R. Jay (Chief Accounting Officer and
Chief Financial Officer)
* Director February 1, 2000
- ---------------------------------------
Robert J. Clark
* Director February 1, 2000
- ---------------------------------------
Winifred E. Coleman
* Director February 1, 2000
- ---------------------------------------
William A. O'Neill
* Director February 1, 2000
- ---------------------------------------
Millard H. Pryor, Jr.
* Director February 1, 2000
- ---------------------------------------
Lowndes A. Smith
</TABLE>
<PAGE> 269
<TABLE>
<S> <C> <C>
* Director February 1, 2000
- ---------------------------------------
John K. Springer
/s/ Kevin J. Carr February 1, 2000
- -------------------------------------------
* By Kevin J. Carr
Attorney-in-fact
</TABLE>
<PAGE> 270
EXHIBIT INDEX
Exhibit No.
d.(xiii) Form of Amendment Number 4 to Investment Management Agreement
d.(xiv) Form of Amendment Number 4 to Sub-Advisory Agreement between
Hartford Investment Financial Services Company and Wellington
Management Company LLP
e.(vi) Form of Amendment Number 4 to Principal Underwriting Agreement
g.(v) Form of Letter Amendment to Custodian Agreement
h.(vi) Form of Amendment Number 5 to Transfer Agency and Service Agreement
m.(xi) Form of Amendment Number 3 to Amended and Restated Rule 12b-1
Distribution Plan for Class A Shares
m.(xii) Form of Amendment Number 3 to Amended and Restated Rule 12b-1
Distribution Plan for Class B Shares
m.(xiii) Form of Amendment Number 2 to Rule 12b-1 Distribution Plan for Class
C Shares
o.(vi) Form of Amendment Number 2 to Amended and Restated Rule 18f-3 Plan
which added Class C Shares
p. Powers of Attorney
<PAGE> 1
AMENDMENT NUMBER 4 TO
INVESTMENT MANAGEMENT AGREEMENT
Pursuant to the Investment Management Agreement between Hartford Investment
Financial Services Company ("HIFSCO") and The Hartford Mutual Funds, Inc.
(formerly known as ITT Hartford Mutual Funds, Inc.) dated March 3, 1997, as
amended (the "Agreement"), The Hartford Global Health Fund and The Hartford
Global Technology Fund are hereby included in the definition of Portfolio. All
provisions in the Agreement shall apply to the management of The Hartford Global
Health Fund and The Hartford Global Technology Fund except as stated below.
The advisory fee for the two new portfolios shall be accrued daily and paid
monthly, based upon the following annual rates and upon the calculated daily net
asset value of the Fund.
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
<S> <C>
First $500,000,000 1.00%
Next $500,000,000 0.90%
Amount Over $1 Billion 0.90%
</TABLE>
HIFSCO may waive all or a portion of these fees from time to time as agreed
between the parties.
This amended Agreement is effective for a period of two years from the date
hereof and shall continue in effect thereafter in accordance with the provisions
of Section 8 of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to
be executed on the day of , 2000.
HARTFORD INVESTMENT FINANCIAL SERVICES COMPANY
By: __________________________________________
THE HARTFORD MUTUAL FUNDS, INC.
on behalf of:
The Hartford Global Health Fund
The Hartford Global Technology Fund
By: _________________________________________
<PAGE> 1
AMENDMENT NUMBER 4 TO
INVESTMENT SUB-ADVISORY AGREEMENT
The Investment Sub-Advisory Agreement between Hartford Investment Financial
Services Company and Wellington Management Company, LLP ("Wellington
Management") dated March 3, 1997, as amended (the "Agreement") is hereby amended
to include The Hartford Global Health Fund and The Hartford Global Technology
Fund (the "Funds") as two new Portfolios. All provisions in the Agreement shall
apply to the Funds except as stated below.
The sub-advisory fee for the two new portfolios shall be accrued daily and
paid quarterly, based upon the following annual rates and upon the calculated
daily net asset value of the Funds:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
<S> <C>
First $50,000,000
Next $100,000,000
Next $350,000,000
Next $500,000,000
Amount Over $1 Billion
</TABLE>
Wellington Management may waive all or a portion of these fees from
time to time as agreed between the parties.
This amended Agreement is effective for a period of two years from the
date hereof and shall continue in effect thereafter in accordance with the
provisions of Section 9 of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to
be executed on the day of , 2000.
HARTFORD INVESTMENT FINANCIAL SERVICES COMPANY
By: __________________________________________
WELLINGTON MANAGEMENT COMPANY, LLP
By: __________________________________________
<PAGE> 1
AMENDMENT NUMBER 4 TO
PRINCIPAL UNDERWRITING AGREEMENT
Pursuant to the Principal Underwriting Agreement between Hartford
Securities Distribution Company, Inc. and The Hartford Mutual Funds, Inc.
(formerly known as ITT Hartford Mutual Funds, Inc.) dated July 22, 1996, as
amended and as assigned to Hartford Investment Financial Services Company on
November 1, 1998 (the "Agreement"), The Hartford Global Health Fund and The
Hartford Global Technology Fund are hereby included as two new Funds. All
provisions in the Agreement shall apply to The Hartford Global Health Fund and
The Hartford Global Technology Fund.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed on the day of , 2000.
HARTFORD INVESTMENT FINANCIAL SERVICES COMPANY
By: __________________________________________
THE HARTFORD MUTUAL FUNDS, INC.
on behalf of:
The Hartford Global Health Fund
The Hartford Global Technology Fund
By: __________________________________________
<PAGE> 1
THE HARTFORD MUTUAL FUNDS, INC.
______________, 2000
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105
Re: The Hartford Mutual Funds, Inc.
Ladies and Gentlemen:
This is to advise you that The Hartford Mutual Funds, Inc. (the "Fund") has
established two new series of shares to be known as The Hartford Global Health
Fund and The Hartford Global Technology Fund, respectively. In accordance with
the Additional Funds provision of Section 17 of the Custodian Contract dated as
of July 15, 1996, as amended, between the Fund (formerly known as ITT Hartford
Mutual Funds, Inc.) and State Street Bank and Trust Company, the Fund hereby
requests that your bank act as Custodian for both aforementioned series under
the terms of the aforementioned contract.
Please indicate your acceptance of the foregoing by executing two copies of this
letter agreement, returning one to the Fund and retaining one for your records.
THE HARTFORD MUTUAL FUNDS, INC.
on behalf of
The Hartford Global Health Fund
The Hartford Global Technology Fund
By: _______________________________
Agreed and Accepted:
STATE STREET BANK AND TRUST COMPANY
By: _______________________________
Name: ____________________________
Title: ____________________, Duly Authorized
Effective Date : __________________________
<PAGE> 1
AMENDMENT NUMBER 5 TO
TRANSFER AGENCY AND SERVICE AGREEMENT
Pursuant to the Transfer Agency and Service Agreement between State
Street Bank and Trust Company and The Hartford Mutual Funds, Inc. (formerly
known as ITT Hartford Mutual Funds, Inc.) dated July 15, 1996, as amended (the
"Agreement"), The Hartford Global Health Fund and The Hartford Global Technology
Fund are hereby included as two new Funds. All provisions in the Agreement shall
apply to The Hartford Global Health Fund and The Hartford Global Technology
Fund.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed on the day of , 2000.
STATE STREET BANK AND TRUST COMPANY
By: _______________________________
Title:
THE HARTFORD MUTUAL FUNDS, INC.
on behalf of:
The Hartford Global Health Fund
The Hartford Global Technology Fund
By: _______________________________
<PAGE> 1
AMENDMENT NUMBER 3 TO
AMENDED AND RESTATED
RULE 12b-1 DISTRIBUTION PLAN FOR CLASS A SHARES
Pursuant to the Rule 12b-1 Distribution Plan for Class A Shares between
The Hartford Mutual Funds, Inc. (formerly known as ITT Hartford Mutual Funds,
Inc.) and Hartford Securities Distribution Company, Inc. dated July 22, 1996, as
amended and restated as of December 31, 1997 and as assigned to Hartford
Investment Financial Services Company on November 1, 1998 (the "Distribution
Plan"), The Hartford Global Health Fund and The Hartford Global Technology Fund
are hereby included as two new Funds. All provisions in the Distribution Plan
shall apply to The Hartford Global Health Fund and The Hartford Global
Technology Fund.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed on the day of , 2000.
The Hartford Mutual Funds, Inc.,
on behalf of :
The Hartford Global Health Fund
The Hartford Global Technology Fund
By: ____________________________________________
Hartford Investment Financial Services Company
By: ____________________________________________
<PAGE> 1
AMENDMENT NUMBER 3 TO
AMENDED AND RESTATED
RULE 12b-1 DISTRIBUTION PLAN FOR CLASS B SHARES
Pursuant to the Rule 12b-1 Distribution Plan for Class B Shares between
The Hartford Mutual Funds, Inc. (formerly known as ITT Hartford Mutual Funds,
Inc.) and Hartford Securities Distribution Company, Inc. dated July 22, 1996, as
amended and restated as of August 22, 1997 and as of December 31, 1997 and as
assigned to Hartford Investment Financial Services Company on November 1, 1998
(the "Distribution Plan"), The Hartford Global Health Fund and The Hartford
Global Technology Fund are hereby included as two new Funds. All provisions in
the Distribution Plan shall apply to The Hartford Global Health Fund and The
Hartford Global Technology Fund.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed on the day of , 2000.
The Hartford Mutual Funds, Inc.,
on behalf of:
The Hartford Global Health Fund
The Hartford Global Technology Fund
By: __________________________________________
Hartford Investment Financial Services Company
By: __________________________________________
<PAGE> 1
AMENDMENT NUMBER 2 TO
RULE 12b-1 DISTRIBUTION PLAN
FOR CLASS C SHARES
Pursuant to the Rule 12b-1 Distribution Plan for Class C Shares between
The Hartford Mutual Funds, Inc. and Hartford Securities Distribution Company,
Inc. dated July 13, 1998, and as assigned to Hartford Investment Financial
Services Company on November 1, 1998 (the "Distribution Plan"), The Hartford
Global Health Fund and The Hartford Global Technology Fund are hereby included
as two new Funds. All provisions in the Distribution Plan shall apply to The
Hartford Global Health Fund and The Hartford Global Technology Fund.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed on the day of , 2000.
The Hartford Mutual Funds, Inc.,
on behalf of :
The Hartford Global Health Fund
The Hartford Global Technology Fund
By: __________________________________________
Hartford Investment Financial Services Company
By: __________________________________________
<PAGE> 1
AMENDMENT NUMBER 2 TO
AMENDED AND RESTATED RULE 18f-3 PLAN
WHICH ADDED CLASS C SHARES
Pursuant to the Rule 18f-3 Multiple Class Plan of The Hartford Mutual
Funds, Inc. (formerly ITT Hartford Mutual Funds, Inc.) dated July 22, 1996, as
amended and restated as of July 13, 1998 to add Class C Shares (the "Plan"), The
Hartford Global Health Fund and The Hartford Global Technology Fund are hereby
included as two new Funds. All provisions in the Plan shall apply to The
Hartford Global Health Fund and The Hartford Global Technology Fund.
<PAGE> 1
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
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
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.
/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
<PAGE> 2
/s/ Millard H. Pryor, Jr. Dated January 21, 2000
- -------------------------------- -------------------------------
Millard H. Pryor, Jr.
/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
