NVEST KOBRICK INVESTMENT TRUST, N-30D, 2000-11-20

NVEST KOBRICK INVESTMENT TRUST
N-30D, 2000-11-20

Previous: BURKE INDUSTRIES INC /CA/, 10-Q, EX-27, 2000-11-20

Next: BCS INVESTMENT CORP, DEF 14C, 2000-11-20

[NVEST FUNDS LOGO GOES HERE]
--------------------------------------------------------------------------------
KOBRICK CAPITAL FUND
KOBRICK EMERGING GROWTH FUND
KOBRICK GROWTH FUND

[WHERE THE BEST MINDS MEET ARTWORK GOES HERE]

ANNUAL REPORT SEPTEMBER 30, 2000

<PAGE>
TABLE OF CONTENTS

--------------------------------------------------------------------------------

ANNUAL REPORT SEPTEMBER 30, 2000
--------------------------------------------------------------------------------

Presidents' Message ....................................................... 1
Portfolio Managers' Commentary and Performance
Kobrick Capital Fund .............................................. 2
Kobrick Emerging Growth Fund ...................................... 4
Kobrick Growth Fund ............................................... 6
Schedules of Investments
Kobrick Capital Fund .............................................. 8
Kobrick Emerging Growth Fund ...................................... 10
Kobrick Growth Fund ............................................... 12
Financial Statements
Statements of Assets and Liabilities .............................. 14
Statements of Operations .......................................... 15
Statements of Changes in Net Assets ............................... 16
Financial Highlights .............................................. 17
Notes to Financial Statements ............................................. 20
Report of Independent Accountants ......................................... 27

Notes:
Equity securities are subject to market risks. This means you may lose money on
your investment because the value of shares of mutual funds fluctuate. Your
shares, when you redeem, may be worth more or less than your original cost.
Growth stocks are generally more sensitive to market movements because their
stock prices are based on future expectations. Initial public offerings ("IPOs")
may have significant risk, may impact the fund's performance, and may result in
increased tax liability to shareholders. Frequent portfolio turnover may
increase your risk of greater tax liability which, in turn, could lower your
return from these funds.

Recent returns occurred during favorable market conditions which may not
continue. Recent returns may be higher or lower than those shown. Small-cap and
emerging growth companies are more volatile than the overall market. These risks
affect your investment's value. See the prospectus for details. The portfolio
managers' commentary reflects conditions and actions taken during the reporting
period, which are subject to change. A shift in opinion may result in strategic
and other portfolio changes.

--------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
--------------------------------------------------------------------------------
<PAGE>

KOBRICK FUNDS
--------------------------------------------------------------------------------

[PICTURE OF JOHN HAILER GOES HERE] [PICTURE OF FRED KOBRICK GOES HERE]
John T. Hailer Frederick R. Kobrick
President and President and
Chief Executive Officer, Chief Executive Officer,
Nvest Funds Kobrick Funds LLC

PRESIDENTS' MESSAGE NOVEMBER 8, 2000
--------------------------------------------------------------------------------

DEAR FELLOW SHAREHOLDER:

We are pleased to present this annual report for the Kobrick Funds' fiscal year,
which ended September 30, 2000, during an especially turbulent time for the
equity markets. With so much speculation in the financial media about where the
market is going from here, it is reassuring to remember that "bottom up" stock
selection -- the strategy used to manage your funds -- relies on careful
analysis of individual companies, not on "top-down" guesses about market
direction. Obviously the funds are not immune from short-term market trends. But
we believe a diversified portfolio of reasonably priced stocks of companies with
strong growth prospects and top-quality management may be profitable for
investors over a reasonable timeframe, regardless of short-term market swings.

For most of the Funds' fiscal year, the market indices experienced sharp gains
and dramatic declines. The relatively few stocks that dominate the indices --
mostly large, technology-oriented growth stocks -- were bid up in value by
investors out to catch the comet by its tail. While driving up the prices of
overvalued glamour stocks, most investors overlooked a large number of
reasonably priced, strong companies. In September and into October of this year,
some sense of normalcy has returned with a significant broadening of the market,
as investor interest returned to a broader range of companies. This has created
tremendous opportunities for good stock pickers and should lead to a stronger,
more rational market in the long run.

We believe there are two key elements to making money in the market. First, the
best investments are based on deep research, which is the foundation of Kobrick
Funds. Second, you need a proper holding period to avoid market-timing. That
part is up to you. Two decades ago the average holding period for mutual funds
was 12 years and today it is less than three years -- the bare minimum.

ACTIVELY MANAGED FUNDS WITH AN EYE TOWARD TAX-EFFICIENCY

All three of the Kobrick Funds -- Capital, Emerging Growth and Growth -- share
one goal: growth of capital. Since inception, all three funds have had strong
performance, and yet we were able to keep taxable gains to a minimum by taking
lots of small losses along the way, making price declines work for shareholders.
As with all market strategies, this one requires careful thought. We must
balance the cost of higher turnover against the advantage of minimizing taxable
distributions.

OUR GROWING RELATIONSHIP

The union between Nvest and Kobrick continues to serve both companies and the
Funds' shareholders well, as we believed it would. The Kobrick Funds have grown
significantly throughout the past year and we have provided shareholders with
enhanced services. Our family continues to grow -- in October our parent company
was acquired by CDC Asset Management, a leading French financial institution.
The management of Kobrick Funds will remain in place and will continue to
operate autonomously, as in the past. However, we are now part of one of the 20
largest investment management firms, with resources that reach around the world.

We will continue to work hard to meet your expectations for quality investment
products, competitive performance and excellent customer service. Thank you for
the confidence you show by investing in our funds.

Sincerely,

[JOHN HAILER'S SIGNATURE GOES HERE] [FRED KOBRICK'S SIGNATURE GOES HERE]

John T. Hailer Frederick R. Kobrick
President and Chief Executive Officer President and Chief Executive Officer
Nvest Funds Kobrick Funds LLC

1
<PAGE>

KOBRICK CAPITAL FUND
--------------------------------------------------------------------------------

PORTFOLIO PROFILE INTERVIEW WITH YOUR PORTFOLIO MANAGER
--------------------------------------------------------------------------------
KOBRICK CAPITAL FUND

[PICTURE OF FRED KOBRICK GOES HERE]
FREDERICK R. KOBRICK
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
KOBRICK FUNDS LLC,
PORTFOLIO MANAGER,
KOBRICK CAPITAL FUND

--------------------------------------------------------------------------------

OBJECTIVE: Q. HOW DID KOBRICK CAPITAL FUND PERFORM
Seeks maximum capital DURING THE FISCAL YEAR?
appreciation
------------------------------ During the fiscal year ended September
30, 2000, Kobrick Capital Fund performed
STRATEGY: well, up 27.99% (Class A shares at net
Invests primarily in equity asset value), compared with a return of
securities of companies with 18.19% for its benchmark, the Russell
small, medium and large 3000 Index, for the same period. The
capitalizations. Fund enjoyed a strong first six months,
------------------------------ which was followed by a disappointing
period from April to well into July -- a
INCEPTION DATE: period we describe as a "market of
December 31, 1997 manias." The market subsequently
------------------------------ returned to a more normal pattern and
the Fund's performance improved
MANAGER: significantly.
Frederick R. Kobrick
------------------------------ Q. WHAT DO YOU MEAN BY A "MARKET OF
MANIAS"?
SYMBOLS:
Class A KFCFX I believe the stock market has been
Class B KCFBX abnormal for nearly two years. The
Class C pending indices went up and most stocks failed
Class Y KCFYX to perform or even declined. This
------------------------------ occurred because a small number of
large, mostly technology stocks
NET ASSET VALUE dominated the indices. This "market of
PER SHARE: manias" was particularly evident this
(SEPTEMBER 30, 2000) year, driven by the emotional reactions
Class A $19.05 of day traders, individuals and many
Class B 18.92 professional investors chasing a small
Class C 18.93 number of glamour stocks to higher and
Class Y 19.09 higher valuations, ignoring many strong
------------------------------ companies that represented opportunity.
In September, investors began to realize
what we had realized some time before --
that many of these high valuations were
not justified. As a result, investor
interest began to broaden into issues
that had been overlooked, including in
technology, healthcare and financial
services. We were already invested in
these areas.

Q. HAVE THERE BEEN OTHER TIMES WHEN THE
MARKET ACTED LIKE THIS?

The most recent example was in 1990,
after Iraq invaded Kuwait, when the
market clustered around momentum stocks
and the declines from 52-week highs were
dramatic. However, toward the end of
1990, the market returned to normal and
many stock pickers like us, who use a
"bottom-up" approach to stock selection,
achieved strong results. Years of
experience have taught us that the only
way to build a long-term record of
investment success is to know your
stocks and buy them when most investors
are pessimistic. We firmly believe we
are on the right path.

Q. WHAT ARE SOME OF THE REASONS FOR THE
FUND'S OVERALL GOOD PERFORMANCE
DURING THE FISCAL YEAR?

We consider Kobrick Capital Fund to be
an "all-weather" fund because it has the
ability to invest in companies of all
capitalizations as market conditions
change. Although we have this
flexibility, we strive to maintain a
mid-cap bias for the Fund. During the
first half of the fiscal year,
technology companies in a variety of
sectors were very strong and the Fund
benefited from our diverse holdings in
this area. As the valuations for these
companies -- particularly the large-cap
stocks -- reached unrealistic levels in
the spring, we took profits and invested
in many overlooked companies in the
areas of energy, healthcare, retail and
specialty services.

Q. WHAT'S YOUR OUTLOOK FOR THE ECONOMY
AND THE OVERALL MARKET?

We think the Federal Reserve Board has
given the U.S. economy the best possible
chance of a soft landing. However, in
the months ahead we believe that the
economy will be slowing from a 6% growth
rate, with virtually no inflation, to a
normal economy, which means 3% growth.
At first, the deceleration may feel like
a recession. However, we expect to see
strength in a broad range of sectors --
from building and construction to
technology capital spending. We believe
the fear cycle that was influencing the
markets as Kobrick Capital Fund ended
its fiscal year is actually healthy.
It's creating value, and providing us
with attractive buying opportunities. We
expect 2001 to be a very good year.

2
<PAGE>

KOBRICK CAPITAL FUND
--------------------------------------------------------------------------------

INVESTMENT RESULTS THROUGH SEPTEMBER 30, 2000
---------------------------------------------

PERFORMANCE IN PERSPECTIVE

The chart comparing your Fund's performance to a benchmark index provides you
with a general sense of how your Fund performed. To put this information in
context, it may be helpful to understand the differences between the two. Your
Fund's total return for the period shown below reflects Fund expenses and
management fees. A securities index measures the performance of a theoretical
portfolio. Unlike a fund, the index is unmanaged and does not have expenses that
affect the results. It is not possible to invest directly in an index. In
addition, few investors could purchase all of the securities necessary to match
the index and would incur transaction costs and other expenses even if they
could. Your Fund's benchmark is the Russell 3000 Index.

GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES
-------------------------------------------------

DECEMBER 31, 1997 (INCEPTION) THROUGH SEPTEMBER 30, 2000

[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]

DATE NAV MSC HIGH YIELD
----------------------------------------------------------------
12/31/97 10000 9425 10000
1/31/98 10180 9595 10052
2/28/98 11280 10631 10771
3/31/98 11520 10858 11305
4/30/98 11890 11206 11416
5/31/98 11320 10669 11134
6/30/98 12410 11696 11511
7/31/98 12090 11395 11302
8/31/98 9830 9265 9570
9/30/98 10710 10094 10223
10/31/98 11580 10914 10999
11/30/98 12940 12196 11672
12/31/98 15000 14138 12414
1/31/99 17560 16550 12835
2/28/99 16280 15344 12381
3/31/99 17740 16720 12835
4/30/99 18220 17172 13414
5/31/99 16740 15777 13159
6/30/99 17990 16956 13824
7/31/99 17410 16409 13405
8/31/99 17410 16409 13253
9/30/99 17200 16211 12914
10/31/99 18084 17045 13724
11/30/99 20651 19464 14108
12/31/99 25982 24488 15009
1/31/00 26097 24597 14420
2/29/00 31948 30111 14554
3/31/00 28780 27125 15694
4/30/00 24998 23561 15142
5/31/00 21749 20498 14717
6/30/00 22349 21064 15153
7/31/00 20487 19309 14885
8/31/00 22673 21369 15989
9/30/00 22025 20758 15265

The illustration represents past performance of Class A shares and does not
guarantee future results. Share price and return will vary and you may have a
gain or a loss when you sell your shares. Class B, C and Y share performance
will differ from that shown based on differences in inception date, fees and
sales charges. All index and Fund performance assumes reinvestment of
distributions.

AVERAGE ANNUAL TOTAL RETURNS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SINCE FUND'S
1 YEAR INCEPTION
CLASS A (Inception 12/31/97)
Net Asset Value(1) 27.99% 33.29%
With Maximum Sales Charge(2) 20.63 30.45
--------------------------------------------------------------------------------
CLASS B (Inception 10/29/99)
Net Asset Value(1) -- 20.97%
With CDSC(3) -- 15.97
--------------------------------------------------------------------------------
CLASS C (Inception 10/29/99)
Net Asset Value(1) -- 21.04%
With CDSC(3) -- 20.04
--------------------------------------------------------------------------------
CLASS Y (Inception 10/29/99)
Net Asset Value(1) -- 22.06%
--------------------------------------------------------------------------------

SINCE FUND'S SINCE FUND'S
CLASS A CLASS B,C & Y
COMPARATIVE PERFORMANCE 1 YEAR INCEPTION INCEPTION
Russell 3000 Index(4) 18.19% 16.62% 11.21%
Morningstar Midcap Growth Funds Average(5) 66.04 34.24 52.42
Lipper Multi-Cap Growth Funds Average(6) 53.43 31.35 41.64
--------------------------------------------------------------------------------

PORTFOLIO AS OF SEPTEMBER 30, 2000
----------------------------------

% OF
YOUR FUND'S COMPOSITION NET ASSETS
--------------------------------------------------
Common Stocks 96.2
Short Term Investments and Other 3.8

% OF
YOUR FUND'S TEN LARGEST HOLDINGS NET ASSETS
--------------------------------------------------
Applied Micro Circuits Corp. 3.9
Extreme Networks, Inc. 3.5
Calpine Corp. 3.3
Palm Inc. 3.1
Juniper Networks, Inc. 3.0
Emulex Corp. 2.9
IDEC Pharmaceuticals Corp. 2.7
CIENA Corp. 2.7
VERITAS Software Corp. 2.4
PMC-Sierra, Inc. 2.4

% OF
YOUR FUND'S FIVE LARGEST INDUSTRIES NET ASSETS
--------------------------------------------------
Computer Software 23.3
Computer Networking 12.4
Telecommunications-Equipment 6.8
Semiconductor-Electronic 6.3
Electric Companies 5.2

Portfolio holdings and asset allocations will vary.

NOTES
The returns in the Average Annual Total Returns table represent past performance
of the Fund and do not guarantee future results. Share price and return will
vary and you may have a gain or a loss when you sell your shares. Fund
performance also reflects waived fees and expenses. Returns would have been
lower without these waivers, which can be discontinued. (See Note 4.) Periods of
less than one year are not annualized. All index and Fund performance assumes
reinvestment of distributions. Class Y shares are available to certain
institutional investors only.

1 Net Asset Value (NAV) performance assumes reinvestment of all distributions
and does not reflect a sales charge.
2 With Maximum Sales Charge performance assumes reinvestment of all
distributions and reflects the maximum sales charge of 5.75% at the time of
purchase of Class A shares. Until 10/29/99, the Fund had only one class of
shares and was offered without a sales charge. Historical performance has
been recalculated to include a sales charge.
3 With Contingent Deferred Sales Charge (CDSC) performance assumes
reinvestment of all distributions and, for Class B shares, assumes that a
maximum 5.00% sales charge is applied to redemptions. The sales charge will
decrease over time, declining to zero six years after the purchase of
shares. With CDSC performance for Class C shares assumes a maximum 1.00%
sales charge on redemptions within the first year of purchase.
4 Russell 3000 Index is an unmanaged index of the 3,000 largest U.S.
companies. You may not invest directly in an index.
5 Morningstar Midcap Growth Funds Average is the average performance without
sales charges of all mutual funds with similar investment objectives as
calculated by Morningstar, Inc. Since inception returns for Class B,C and Y
shares is calculated from 11/1/99.
6 Lipper Multi-Cap Growth Funds Average is the average performance without
sales charges of all mutual funds with similar current investment style or
objective as calculated by Lipper Inc.

3
<PAGE>

KOBRICK EMERGING GROWTH FUND
--------------------------------------------------------------------------------

[PICTURE OF FRED KOBRICK GOES HERE]
FREDERICK R. KOBRICK
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
KOBRICK FUNDS LLC,
PORTFOLIO MANAGER,
KOBRICK EMERGING GROWTH FUND

PORTFOLIO PROFILE INTERVIEW WITH YOUR PORTFOLIO MANAGER
--------------------------------------------------------------------------------
KOBRICK EMERGING GROWTH FUND

OBJECTIVE: Q. HOW DID KOBRICK EMERGING GROWTH FUND
Seeks growth of capital PERFORM DURING THE FISCAL YEAR?
------------------------------
The Fund performed well, delivering a
STRATEGY: return of 39.24% (Class A shares at net
Invests primarily in equity asset value) during the 12 months ended
securities of emerging growth September 30, 2000, compared with a
companies, with an emphasis on return of 23.39% for its benchmark, the
companies with small Russell 2000 Index. During the first
capitalizations. half of the fiscal year, small-cap
------------------------------ stocks outperformed larger issues.
However, during much of the second half
INCEPTION DATE: of the fiscal year, the market was
December 31, 1997 highly volatile, as valuations of
------------------------------ certain large-cap stocks reached
extremely high levels, while many
MANAGER: small-cap and emerging growth companies
Frederick R. Kobrick were ignored. Recently this trend
------------------------------ reversed and the market began to broaden
in September to include smaller
SYMBOLS: companies in a wide range of industries.
Class A KFEGX
Class B KEGBX Q. SMALL STOCKS TEND TO BE VOLATILE.
Class C pending WHAT STEPS DO YOU TAKE TO PROTECT THE
Class Y pending FUND DURING DIFFICULT PERIODS?
------------------------------
Many fund managers raise cash to protect
NET ASSET VALUE their funds in down markets, but
PER SHARE: rebounds often happen at lightning speed
(SEPTEMBER 30, 2000) and a defensive posture slows a Fund's
Class A $19.45 response time. We believe the
Class B 19.34 opportunity cost of such tactics is too
Class C 19.34 high. Our policy is to apply strict buy
Class Y 19.49 and sell disciplines that I've developed
------------------------------ over my 30-year career to help us avoid
the emotions that have buffeted the
markets recently.

Since there are thousands of smaller,
emerging companies to choose from, we
look for those with outstanding
management and compelling valuations, as
well as strong growth potential. The
quality of management is particularly
important with the obstacles faced by
emerging companies. Knowing when to sell
a stock is much more difficult. We will
generally sell a stock if it reaches our
target price, if there is a change in
company management, or if the company
fails to execute its strategy.

Q. WHICH SECTORS CONTRIBUTED MOST TO
KOBRICK EMERGING GROWTH FUND'S
PERFORMANCE?

As bottom-up stock pickers, we focus on
the fundamentals of individual
companies, not sectors. However, looking
back on the year, several sectors
contributed to the Fund's performance.
During the first half, a number of
technology sub-sectors were strong
performers for the Fund, including
computer software, semiconductors and
Internet-related companies. Certain
stocks in the communications, healthcare
and financial services sectors also
contributed to the Fund's performance.
Even though lower consumer spending made
it a difficult year for retailers,
select specialty retailers also helped
the Fund.

Q. WHAT CAUSED THE VOLATILITY IN THE
STOCK MARKET, ESPECIALLY AT THE END
OF THE YEAR?

Technology spending by major businesses
has enabled the productivity boom that
is the basis for solid, non-inflationary
growth in the U.S. But investors created
a technology mania that swept a lot of
stocks along in its wake, while others
were ignored. Late in the fiscal year,
prices of many technology stocks
collapsed because people were concerned
that the slowing economy would hurt
earnings. As if giving credence to that
theory, some leading technology
companies issued warnings that their
earnings might not be as strong as
forecasted. However, companies with good
earnings don't issue warnings. Their
reports arrive later in the calendar
year, conveying a seasonality to market
trends.

Once the mania mode clears, technology
companies with good valuations and
fundamentals will rise to the surface,
and experienced investors who put a lot
of effort into individual stock
selection will come into their own
again. The market seems to be
broadening, as investors take renewed
interest in other sectors, as well as in
some overlooked technology issues.

Q. WHAT'S YOUR OUTLOOK FOR EMERGING
GROWTH COMPANIES AND THE FUND GOING
FORWARD?

As the mania recedes, opportunities will
continue to emerge in a broad range of
sectors. A broader market is likely to
be more rational, and emerging companies
should benefit. While various
sub-sectors in technology will continue
to be a prime area for Kobrick Emerging
Growth Fund, we will maintain a broadly
diversified portfolio of energetic,
young companies.

4
<PAGE>

KOBRICK EMERGING GROWTH FUND
--------------------------------------------------------------------------------

Investment Results Through September 30, 2000
---------------------------------------------

PERFORMANCE IN PERSPECTIVE
The chart comparing your Fund's performance to a benchmark index provides you
with a general sense of how your Fund performed. To put this information in
context, it may be helpful to understand the differences between the two. Your
Fund's total return for the period shown below reflects Fund expenses and
management fees. A securities index measures the performance of a theoretical
portfolio. Unlike a fund, the index is unmanaged and does not have expenses that
affect the results. It is not possible to invest directly in an index. In
addition, few investors could purchase all of the securities necessary to match
the index and would incur transaction costs and other expenses even if they
could. Your Fund's benchmark is the Russell 2000 Index.

GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES
------------------------------------------------

DECEMBER 31, 1997 (INCEPTION) THROUGH SEPTEMBER 30, 2000

[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]

DATE NAV MSC HIGH YIELD
----------------------------------------------------------------
12/31/97 10000 9425 10000
1/31/98 10260 9670 9842
2/28/98 11330 10679 10570
3/31/98 11700 11027 11006
4/30/98 12050 11357 11067
5/31/98 11490 10829 10471
6/30/98 12560 11838 10493
7/31/98 11920 11235 9643
8/31/98 9350 8812 7771
9/30/98 10140 9557 8379
10/31/98 10560 9953 8721
11/30/98 12440 11725 9177
12/31/98 13950 13148 9745
1/31/99 15310 14430 9875
2/28/99 13960 13157 9075
3/31/99 15180 14307 9217
4/30/99 15770 14863 10043
5/31/99 15420 14533 10189
6/30/99 16720 15759 10650
7/31/99 16660 15702 10358
8/31/99 16500 15551 9975
9/30/99 16540 15589 9977
10/31/99 17987 16952 10017
11/30/99 22036 20769 10615
12/31/99 26014 24519 11817
1/31/00 24606 23191 11627
2/29/00 30822 29050 13547
3/31/00 28549 26907 12654
4/30/00 25577 24106 11892
5/31/00 22556 21259 11199
6/30/00 23278 21939 12176
7/31/00 20720 19528 11784
8/31/00 22295 21012 12683
9/30/00 23028 21704 12310

AVERAGE ANNUAL TOTAL RETURNS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SINCE FUND'S
1 YEAR INCEPTION
CLASS A (Inception 12/31/97)
Net Asset Value(1) 39.24% 35.47%
With MSC(2) 31.23 32.58
--------------------------------------------------------------------------------
CLASS B (Inception 10/29/99)
Net Asset Value(1) -- 27.32%
With CDSC(3) -- 22.32
--------------------------------------------------------------------------------
CLASS C (Inception 10/29/99)
Net Asset Value(1) -- 27.32%
With CDSC(3) -- 26.32
--------------------------------------------------------------------------------
CLASS Y (Inception 10/29/99)
Net Asset Value(1) -- 28.31%
--------------------------------------------------------------------------------

SINCE FUND'S SINCE FUND'S
CLASS A CLASS B,C & Y
COMPARATIVE PERFORMANCE 1 YEAR INCEPTION INCEPTION
Russell 2000 Index(4) 23.39% 7.85% 22.89%
Morningstar Midcap Growth Funds Average(5) 66.04 34.24 52.42
Lipper Mid Cap Growth Funds Average(6) 63.86 33.95 49.87
--------------------------------------------------------------------------------

PORTFOLIO AS OF SEPTEMBER 30, 2000
----------------------------------

% OF
YOUR FUND'S COMPOSITION NET ASSETS
--------------------------------------------------
Common Stocks 95.9
Short Term Investments and Other 4.1

% OF
YOUR FUND'S TEN LARGEST HOLDINGS NET ASSETS
--------------------------------------------------
CacheFlow, Inc. 5.3
Priority Healthcare, Inc. 4.2
Excalibur Technologies Corp. 3.8
Mercury Interactive Corp. 3.7
BEA Systems, Inc. 3.5
Pier 1 Imports, Inc. 3.2
Extended Stay America, Inc. 2.9
Emulex Corp. 2.8
Reebok International, Ltd. 2.7
Pegasus Systems, Inc. 2.6

% OF
YOUR FUND'S FIVE LARGEST INDUSTRIES NET ASSETS
--------------------------------------------------
Computer Software 20.5
Services-Commercial & Consumer 11.8
Computer Networking 8.6
Retail-Specialty 8.2
Healthcare-Drugs 6.0

Portfolio holdings and asset allocations will vary.

1 Net Asset Value (NAV) performance assumes reinvestment of all distributions
and does not reflect a sales charge.

2 With Maximum Sales Charge performance assumes reinvestment of all
distributions and reflects the maximum sales charge of 5.75% at the time of
purchase of Class A shares. Until 10/29/99, the Fund had only one class of
shares and was offered without a sales charge. Historical performance has
been recalculated to include a sales charge.

3 With Contingent Deferred Sales Charge (CDSC) performance assumes
reinvestment of all distributions and, for Class B shares, assumes that a
maximum 5.00% sales charge is applied to redemptions. The sales charge will
decrease over time, declining to zero six years after the purchase of
shares. With CDSC performance for Class C shares assumes a maximum 1.00%
sales charge on redemptions within the first year of purchase.

4 Russell 2000 Index is an unmanaged index of 2000 smaller U.S. companies.
You may not invest directly in an index.

5 Morningstar Midcap Growth Funds Average is the average performance without
sales charges of all mutual funds with similar investment objectives as
calculated by Morningstar, Inc. Since inception returns for Class B, C and
Y shares is calculated from 11/1/99.

6 Lipper Mid Cap Growth Funds Average is the average peformance without sales
charges of all mutual funds with similar investment style or objective as
calculated by Lipper Inc.

5
<PAGE>

KOBRICK GROWTH FUND
--------------------------------------------------------------------------------

[PICTURE OF MICHAEL NANCE GOES HERE]
Michael E. Nance
Senior Vice President,
Kobrick Funds LLC, and
Portfolio Manager,
Kobrick Growth Fund

PORTFOLIO PROFILE INTERVIEW WITH YOUR PORTFOLIO MANAGER
--------------------------------------------------------------------------------
KOBRICK GROWTH FUND

OBJECTIVE: Q. HOW DID KOBRICK GROWTH FUND PERFORM
Seeks long-term growth of DURING THE FISCAL YEAR?
capital
------------------------------ Kobrick Growth Fund had a very good year
in a market characterized by significant
STRATEGY: volatility. For the 12 months ended
Invests primarily in equity September 30, 2000, Kobrick Growth Fund
securities of companies with returned 40.62% (Class A shares at net
large capitalizations, that asset value), significantly ahead of the
the adviser believes have 13.28% return of its benchmark, the
better than average long-term Standard & Poor's 500 Stock Index. The
growth potential. Fund's performance was also well above
------------------------------ the average for comparable funds for the
same time period.
INCEPTION DATE:
September 1, 1998 Q. HOW WAS THE FUND ABLE TO DO SO WELL?
------------------------------
Keeping to our investment philosophy is
MANAGER: the reason for the Fund's strong
Michael E. Nance performance. In difficult markets, our
------------------------------ buy and sell disciplines help us avoid
making decisions based on momentum or
SYMBOLS: emotion. We focus on good valuations,
Class A KFGRX strong management and insist on a growth
Class B KFGBX rate of 12% or more.
Class C pending
Class Y pending We're not necessarily looking for
------------------------------ statistically "cheap" stocks, but we buy
companies that we believe are
NET ASSET VALUE undervalued for a wide variety of
PER SHARE: reasons. Other investors might not
(SEPTEMBER 30, 2000) understand a new product being
Class A $21.67 introduced by a company. They may not be
Class B 21.53 looking out far enough to realize the
Class C 21.54 intrinsic value of a company. Because we
Class Y 21.73 dug deeper, we avoided many of the
high-priced stocks that corrected as the
fiscal year ended.

Q. WHAT STEPS DO YOU TAKE TO MINIMIZE
RISK?

We try to balance risk and return
possibilities. We believe people who
take strongly defensive positions during
rough periods in the market may pay too
high a price, in terms of lost
opportunity, when it turns around.
Instead, we control for specific and
non-specific risk. As "bottom-up" stock
pickers, we look at the specific risks
of each company we consider for
investment, including its products and
competitors, its longevity and history,
and its management. We also avoid risks
that are not specific to a particular
company by diversifying the portfolio:
Kobrick Growth Fund generally owns 40 to
50 securities in a wide range of
industries.

Q. HOW IS KOBRICK GROWTH FUND POSITIONED
FOR THE YEAR AHEAD?

The portfolio currently includes some
stocks that would be very expensive if
you had to buy them today, including
optical networking and communications.
We believe that, based on their
prospects one, three, or five years out,
they are still fairly valued. This is,
after all, a growth fund, not a value
fund, but we do limit how much we're
willing to pay for growth.

In addition to typical growth stocks,
such as technology and communications
companies, the portfolio also includes
electric utilities. The utilities
industry is in a transition and some
companies are growing rapidly. I'm also
a huge believer in the Internet, but
most Internet stocks are overpriced, so
I investigated financial services
companies that were using the Internet
to grow their business, as well as other
leading banking firms.

Q. WHAT'S YOUR OUTLOOK FOR THE ECONOMY
AND THE OVERALL MARKET?

Right now, the economy seems to be
slowing, which is good for the long-term
health of the markets. The recent steep
decline in stock prices may also be
healthy in the long run by creating
better value and by revealing
opportunities outside of technology and
in overlooked pockets of the market.
It's easy to get mired in sensational
headlines, but if you look at the
broader picture, there's a lot of
opportunity. While oil prices and the
situation in the Middle East are
disturbing, inflation is low,
productivity is high, and I think the
Internet puts us at a crossroads in
business not unlike the industrial
revolution. I believe we are at the very
beginning of a business transformation
that will reach around the world,
allowing large and small companies alike
to continue to grow.

6
<PAGE>

KOBRICK GROWTH FUND
--------------------------------------------------------------------------------

INVESTMENT RESULTS THROUGH SEPTEMBER 30, 2000
---------------------------------------------

GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES
-------------------------------------------------

SEPTEMBER 1, 1998 (INCEPTION) THROUGH SEPTEMBER 30, 2000

[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]

DATE NAV MSC HIGH YIELD
----------------------------------------------------------------
9/1/98 10000 9425 10000
9/30/98 10320 9727 10641
10/31/98 11130 10490 11506
11/30/98 12100 12971 12203
12/31/98 13762 12970 12907
1/31/99 15763 14856 13446
2/28/99 14572 13735 13029
3/31/99 15473 14583 13550
4/30/99 15713 14809 14075
5/31/99 14742 13895 13742
6/30/99 15463 14574 14505
7/31/99 15153 14281 14052
8/31/99 14983 14121 13983
9/30/99 15413 14526 13599
10/31/99 16212 15281 14460
11/30/99 17773 16751 14754
12/31/99 21274 20050 15623
1/31/00 20283 19117 14838
2/29/00 22544 21248 14557
3/31/00 24074 22690 15981
4/30/00 21582 20342 15500
5/31/00 20678 19483 15182
6/30/00 21440 20208 15557
7/31/00 20870 19670 15314
8/31/00 22920 21602 16265
9/30/00 21671 20425 15406

AVERAGE ANNUAL TOTAL RETURNS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SINCE FUND'S
1 YEAR INCEPTION
CLASS A (Inception 9/1/98)
Net Asset Value(1) 40.62% 44.99%
With Maximum Sales Charge (2) 32.54 40.92
--------------------------------------------------------------------------------
CLASS B (Inception 10/29/99)
Net Asset Value(1) -- 32.82%
With CDSC(3) -- 27.82
--------------------------------------------------------------------------------
CLASS C (Inception 10/29/99)
Net Asset Value(1) -- 32.88%
With CDSC(3) -- 31.88
--------------------------------------------------------------------------------
CLASS Y (Inception 10/29/99)
Net Asset Value(1) -- 34.05%
--------------------------------------------------------------------------------

SINCE FUND'S SINCE FUND'S
CLASS A CLASS B,C & Y
COMPARATIVE PERFORMANCE 1 YEAR INCEPTION INCEPTION
S&P 500 Index(4) 13.28% 23.04% 6.54%
Morningstar Large Cap Growth Funds Average(5) 31.28 37.08 22.90
Lipper Large-Cap Growth Funds Average(6) 30.28 34.78 21.55
--------------------------------------------------------------------------------

PORTFOLIO AS OF SEPTEMBER 30, 2000
----------------------------------

% OF
YOUR FUND'S COMPOSITION NET ASSETS
--------------------------------------------------
Common Stocks 97.8
Short Term Investments and Other 2.2

% OF
YOUR FUND'S TEN LARGEST HOLDINGS NET ASSETS
--------------------------------------------------
Tyco International, Ltd. 6.9
Providian Financial Corp. 4.5
Cisco Systems, Inc. 3.3
Sun Microsystems, Inc. 3.2
Mallinckrodt, Inc. 3.2
Cardinal Health, Inc. 3.1
Anheuser-Busch Companies, Inc. 2.8
Comcast Corp. 2.6
Exxon Mobil Corp. 2.6
Pharmacia Corp. 2.6

% OF
YOUR FUND'S FIVE LARGEST INDUSTRIES NET ASSETS
---------------------------------------------------
Manufacturer-Diversified 8.0
Computer Hardware 8.0
Electric Companies 7.3
Semiconductor-Electronic 7.2
Consumer Finance 6.4

Portfolio holdings and asset allocations will vary.

NOTES

The returns in the Average Annual Total Returns table represent past performance
of the Fund and do not guarantee future results. Share price and return will
vary and you may have a gain or a loss when you sell your shares. Fund
performance also reflects waived fees and expenses. Returns would have been
lower without these waivers, which can be discontinued. (See Note 4.) Periods of
less than one year are not annualized. All index and Fund performance assumes
reinvestment of distributions. Class Y shares are available to certain
institutional investors only.

1 Net Asset Value (NAV) performance assumes reinvestment of all distributions
and does not reflect a sales charge.

4 Standard & Poor's Composite Index of 500 Stocks (S&P 500(R)) is an
unmanaged index of U.S. common stock performance. You may not invest
directly in an index. Since inception return is calculated from 8/31/98 for
Class A shares.

5 Morningstar Large Cap Growth Funds Average is the average performance
without sales charges of all mutual funds with similar investment
objectives as calculated by Morningstar, Inc. Since inception return is
calculated from 8/31/98 for Class A shares and from 11/1/99 for Class B, C
and Y shares.

6 Lipper Large-Cap Growth Funds Average is the average performance without
sales charges of all mutual funds with similar investment style or
objective as calculated by Lipper Inc. Since inception return is calculated
from 8/31/98 for Class A shares.

<PAGE>

KOBRICK CAPITAL FUND-- SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
Investments as of September 30, 2000

INVESTMENTS -- 98.5% OF TOTAL NET ASSETS

DESCRIPTION SHARES VALUE (A)
--------------------------------------------------------------------------------
COMMON STOCKS-- 96.2%
BANKS-MAJOR REGIONAL-- 1.5%
Fifth Third Bancorp .................... 48,300 $ 2,602,162
Firstar Corp. .......................... 104,500 2,338,188
----------
4,940,350
----------

BIOTECHNOLOGY-- 4.2%
IDEC Pharmaceuticals Corp. (c) ......... 50,500 8,855,648
Millennium Pharmaceuticals, Inc. (c) ... 33,500 4,893,094
----------
13,748,742
----------

COMMUNICATION-SOFTWARE/SERVICES-- 0.5%
iBasis, Inc. (c) ....................... 106,900 1,697,038
----------

COMPUTER HARDWARE-- 4.6%
Palm, Inc. (c) ......................... 191,300 10,126,944
Sun Microsystems, Inc. (c) ............. 41,300 4,821,775
----------
14,948,719
----------

COMPUTER NETWORKING-- 12.4%
Brocade Communications Systems, Inc. (c) 20,400 4,814,400
Emulex Corp. (c) ....................... 76,500 9,371,250
Extreme Networks, Inc. (c) ............. 98,500 11,278,250
Juniper Networks, Inc. (c) ............. 45,300 9,917,869
McData Corp. (c) ....................... 39,900 4,903,336
----------
40,285,105
----------

COMPUTER SOFTWARE-- 23.3%
BEA Systems, Inc. (c) .................. 94,900 7,390,337
i2 Technologies, Inc. (c) .............. 39,700 7,426,381
Manugistics Group, Inc. (c) ............ 65,500 6,427,187
Mercury Interactive Corp. (c) .......... 41,900 6,567,825
Micromuse, Inc. (c) .................... 26,200 5,264,563
Oracle Corp. (c) ....................... 41,200 3,244,500
Precise Software Solutions, Ltd. (c) ... 6,900 297,563
Rational Software Corp. (c) ............ 49,400 3,427,125
Siebel Systems, Inc. (c) ............... 28,800 3,205,800
Software.com, Inc. (c) ................. 31,000 5,624,563
VA Linux Systems, Inc. (c) ............. 160,100 7,404,625
VeriSign, Inc. (c) ..................... 35,700 7,231,481
VERITAS Software Corp. (c) ............. 55,600 7,895,200
Vitria Technology, Inc. (c) ............ 96,800 4,513,300
----------
75,920,450
----------

COMPUTERS-PERIPHERAL-- 0.2%
StorageNetworks, Inc. (c) .............. 7,100 725,531
----------

CONSUMER FINANCE-- 2.5%
Capital One Financial Corp. ............ 55,700 3,902,481
Providian Financial Corp. .............. 33,400 4,241,800
----------
8,144,281
----------

ELECTRIC COMPANIES-- 5.2%
Calpine Corp. (c) ...................... 104,300 $ 10,886,312
Constellation Energy Group ............. 101,500 5,049,625
Dynegy, Inc. ........................... 8,200 467,400
Southern Energy, Inc. .................. 21,300 668,288
----------
17,071,625
----------

ELECTRONICS-INSTRUMENT-- 2.6%
Celestica, Inc. (c) .................... 52,200 3,614,850
Veeco Instruments, Inc. (c) ............ 44,900 4,771,327
----------
8,386,177
----------

ENTERTAINMENT-- 0.1%
YouthStream Media Networks, Inc. (c) ... 44,100 168,131
----------

HEALTHCARE-DRUGS-- 1.5%
MedImmune, Inc. (c) .................... 61,000 4,712,250
----------

HEALTHCARE-MANAGED CARE-- 1.1%
Tenet Healthcare Corp. (c) ............. 94,700 3,444,712
----------

HEALTHCARE-SPECIALIZED SERVICES-- 1.9%
Cardinal Health, Inc. .................. 52,900 4,665,119
McKesson HBOC, Inc. .................... 44,900 1,372,256
----------
6,037,375
----------

INSURANCE-- 2.2%
American International Group, Inc. ..... 36,750 3,516,516
Hartford Financial Services Group, Inc. 50,800 3,705,225
----------
7,221,741
----------

LODGING-- 1.9%
Hilton Hotels Corp. .................... 301,200 3,482,625
Marriott International, Inc. ........... 75,500 2,751,031
----------
6,233,656
----------

MEDICAL PRODUCTS & SUPPLIES-- 3.9%
Baxter International, Inc. ............. 60,000 4,788,750
Biomet, Inc. ........................... 104,550 3,659,250
PE Corp.-PE Biosystems Group ........... 36,100 4,205,650
----------
12,653,650
----------

OIL & GAS-DRILLING & EQUIPMENT-- 4.8%
Global Marine, Inc. (c) ................ 163,600 5,051,150
Petroleo Brasileiro SA (ADR) (c) ....... 55,600 1,671,475
Schlumberger Ltd. ...................... 43,900 3,613,519
Smith International, Inc. (c) .......... 63,700 5,195,531
----------
15,531,675
----------

OIL & GAS-EXPLORATION & PRODUCTION-- 0.9%
Amerada Hess Corp. ..................... 45,900 3,072,431
----------

See accompanying notes to financial statements.
8
<PAGE>

KOBRICK CAPITAL FUND-- SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
Investments as of September 30, 2000

INVESTMENTS -- CONTINUED

DESCRIPTION SHARES VALUE (A)
--------------------------------------------------------------------------------

OIL & GAS-SERVICES-- 1.7%
Halliburton Co. ........................ 109,800 $ 5,373,337
----------

RETAIL-DEPARTMENT STORES-- 1.4%
Dollar Tree Stores, Inc. (c) ........... 109,900 4,457,819
----------

RETAIL-SPECIALTY-- 2.0%
ANC Rental Corp. (c) ................... 76,287 438,650
AutoNation, Inc. (c) ................... 278,200 1,669,200
Pier 1 Imports, Inc. ................... 331,800 4,500,038
----------
6,607,888
----------

SEMICONDUCTOR-ELECTRONIC-- 6.3%
Flextronics International, Ltd. (c) .... 77,200 6,340,050
PMC-Sierra, Inc. (c) ................... 35,700 7,684,425
Vitesse Semiconductor Corp. (c) ........ 73,900 6,572,481
----------
20,596,956
----------

SEMICONDUCTOR-EQUIPMENT-- 0.0%
Chippac, Inc. (c) ...................... 9,700 115,188
----------

SERVICES-COMMERCIAL & CONSUMER-- 2.4%
CacheFlow, Inc. (c) .................... 47,700 6,821,100
MDC Corp, Inc. (c) ..................... 103,700 946,262
----------
7,767,362
----------

TELECOMMUNICATIONS-CELLULAR-- 0.2%
Research in Motion, Ltd. (c) ........... 7,000 689,938
----------

TELECOMMUNICATIONS-EQUIPMENT-- 6.8%
Applied Micro Circuits Corp. (c) ....... 61,800 12,796,462
CIENA CORP. (C) ........................ 71,600 8,793,375
COSINE COMMUNICATIONS, INC. (C) ........ 11,200 622,300
----------
22,212,137
----------

TELECOMMUNICATIONS-SERVICES-- 0.1%
Intergrated Telecom Express, Inc. (c) .. 16,500 342,375
----------

TOTAL COMMON STOCK
(Identified Cost $282,391,637)......... 313,106,639
-----------

PRINCIPAL
DESCRIPTION AMOUNT VALUE(A)
--------------------------------------------------------------------------------

SHORT TERM INVESTMENT-- 2.3%

Repurchase Agreement with Street Bank & Trust Co.
dated 9/29/2000 at 5.25% to be repurchased
at $7,586,318 on 10/02/2000, collateralized
by $5,785,000 U.S. Treasury Bond 12.750%
due 11/15/2010 with a value of $7,737,438 $ 7,583,000 $ 7,583,000
----------

TOTAL SHORT TERM INVESTMENT
(Identified Cost $7,583,000) .......... 7,583,000
----------

TOTAL INVESTMENTS-- 98.5%
(Identified Cost $289,974,637) (b) .... 320,689,639
Other assets less liabilities .......... 4,820,654
----------

TOTAL NET ASSETS-- 100.0% .............. $ 325,510,293
================

(a) See Note 2 of Notes to Financial Statements.

(b) Federal Tax Information: At
September 30, 2000 the net
unrealized appreciation on
investments based on cost of
$291,135,976 for federal income tax
purposes was as follows:

Aggregate gross unrealized appreciation
for all investments in which there is an
excess of value over tax cost $ 37,640,297
Aggregate gross unrealized depreciation
for all investments in which there is an
excess of tax cost over value (8,086,634)
------------
Net unrealized appreciation $ 29,553,663
===============

ADR American Depositary Receipt (ADR) is a certificate issued by a custodian
bank representing the right to receive securities of the foreign issuer
described. The value of ADRs are significantly influenced by trading on
exchanges not located in the United States.

See accompanying notes to financial statements.
9
<PAGE>

KOBRICK EMERGING GROWTH FUND-- SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
Investments as of September 30, 2000

INVESTMENTS -- 97.4% OF TOTAL NET ASSETS

DESCRIPTION SHARES VALUE(A)
-------------------------------------------------------------------------------

COMMON STOCKS-- 95.9%
AIRLINES-- 1.0%
SkyWest, Inc. .......................... 31,900 $ 1,634,875
----------

APPAREL & TEXTILES-- 2.7%
Reebok International, Ltd. (c) ......... 242,800 4,567,675
----------

BANKS-MAJOR REGIONAL-- 1.2%
Comerica, Inc. ......................... 33,100 1,934,281
----------

BROADCAST MEDIA-- 2.3%
Insight Communications Co., Inc. (c) ... 238,200 3,781,425
----------

COMMUNICATION-SOFTWARE/SERVICES-- 1.3%
iBasis, Inc. (c) ....................... 89,300 1,417,638
Maxxcom Corp. (c) ...................... 100,000 683,341
----------
2,100,979
----------

COMPUTER NETWORKING-- 8.6%
Emulex Corp. (c) ....................... 37,600 4,606,000
Extreme Networks, Inc. (c) ............. 36,400 4,167,800
McData Corp. (c) ....................... 11,400 1,400,953
Network Appliance, Inc. (c) ............ 33,100 4,216,113
----------
14,390,866
----------

COMPUTER SOFTWARE-- 20.5%
Actuate Corp. (c) ...................... 64,600 2,231,728
BEA Systems, Inc.(c) ................... 74,200 5,778,325
Excalibur Technologies Corp.(c) ........ 94,600 6,355,937
Manugistics Group, Inc. (c) ............ 33,500 3,287,188
Mercury Interactive Corp. (c) .......... 39,500 6,191,625
Micromuse, Inc.(c) ..................... 13,400 2,692,563
Precise Software Solutions, Ltd.(c) .... 3,600 155,250
Quintus Corp.(c) ....................... 117,700 1,007,806
Software.com, Inc. (c) ................. 15,300 2,775,994
VA Linux Systems, Inc.(c) .............. 81,900 3,787,875
----------
34,264,291
----------

COMPUTERS-PERIPHERAL-- 0.2%
StorageNetworks, Inc.(c) ............... 3,700 378,094
----------

CONSUMER PRODUCTS-- 1.1%
Blyth, Inc. ............................ 80,900 1,896,094
----------

ELECTRONICS-INSTRUMENT-- 2.1%
PerkinElmer, Inc. ...................... 34,300 3,580,062
----------

ENTERTAINMENT-- 0.1%
YouthStream Media Networks, Inc. (c) ... 37,100 $ 141,444
----------

HEALTHCARE-DRUGS-- 6.0%
MedImmune, Inc. (c) .................... 21,900 1,691,775
NeoRx Corp. ............................ 52,800 1,293,600
Priority Healthcare Corp. (c) .......... 91,800 6,999,750
----------
9,985,125
----------

HEALTHCARE-MANAGED CARE-- 5.4%
Sunrise Assisted Living, Inc. (c) ...... 171,700 3,723,744
Tenet Healthcare Corp.(c) .............. 47,500 1,727,812
Wellpoint Health Networks, Inc.(c) ..... 36,800 3,532,800
----------
8,984,356
----------

HEALTHCARE-MEDICAL PRODUCTS & SUPPLY-- 2.3%
Biomet, Inc. ........................... 110,100 3,853,500
----------

INSURANCE-- 2.0%
Radian Group, Inc. ..................... 49,400 3,334,500
----------

INTERNET-- 0.2%
ITXC Corp.(c) .......................... 27,300 399,263
----------

LODGING-- 4.6%
Extended Stay America, Inc. (c) ........ 371,100 4,917,075
Hilton Hotels Corp. .................... 236,000 2,728,750
----------
7,645,825
----------

OIL & GAS-DRILLING & EQUIPMENT-- 2.7%
R&B Falcon Corp. (c) ................... 71,400 1,990,275
Smith International, Inc. (c) .......... 31,700 2,585,531
----------
4,575,806
----------

OIL & GAS-EXPLORATION & PRODUCTION-- 1.9%
Noble Affiliates, Inc. ................. 87,200 3,237,300
----------

OIL & GAS-REFINING & MARKETING-- 0.5%
Valero Energy Corp. .................... 21,800 767,087
----------

RESTAURANTS-- 1.7%
Rare Hospitality International, Inc. (c) 142,500 2,903,437
----------

RETAIL-DEPARTMENT STORE-- 1.9%
Dollar Tree Stores, Inc. ............... 77,100 3,127,369
----------

See accompanying notes to financial statements.

10
<PAGE>

KOBRICK EMERGING GROWTH FUND-- SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
Investments as of September 30, 2000

INVESTMENTS -- CONTINUED

DESCRIPTION SHARES VALUE(A)
-------------------------------------------------------------------------------

RETAIL-SPECIALTY-- 8.2%
ANC Rental Corp.(c) .................... 62,462 $ 359,157
AutoNation, Inc. (c) ................... 361,900 2,171,400
Pier 1 Imports, Inc. ................... 394,600 5,351,762
Williams-Sonoma, Inc.(c) ............... 85,800 2,981,550
Yankee Candle, Inc.(c) ................. 137,000 2,757,125
----------
13,620,994
----------

SEMICONDUCTOR-EQUIPMENT-- 0.0%
Chippac, Inc.(c) ....................... 4,700 55,813
----------

SERVICES-COMMERCIAL & CONSUMER-- 11.8%
AnswerThink Consulting Group, Inc. (c) . 10,000 162,500
CacheFlow, Inc.(c) ..................... 61,900 8,851,700
Dendrite International, Inc(c) ......... 111,600 2,992,275
Heidrick & Struggles International, Inc. (c) 43,400 2,229,675
MDC Corp, Inc. (c) ..................... 124,700 1,137,887
Pegasus Systems, Inc.(c) ............... 224,800 4,397,650
----------
19,771,687
----------

TELEPHONE-- 0.5%
CTC Communications Group, Inc. (c) ..... 37,550 760,387
----------

TELECOMMUNICATIONS-CELLULAR-- 1.6%
Research in Motion, Ltd.(c) ............ 3,500 344,969
SBA Communcations Corp.(c) ............. 55,000 2,306,562
----------
2,651,531
----------

TELECOMMUNICATIONS-EQUIPMENT-- 3.3%
Cosine Communications, Inc.(c) ......... 5,700 316,706
Razorfish, Inc., Class A(c) ............ 238,000 2,458,094
Tekelec, Inc.(c) ....................... 86,000 2,827,250
----------
5,602,050
----------

TELECOMMUNICATIONS-SERVICES-- 0.2%
CapRock Communications Corp. (c) ....... 25,600 130,400
Intergrated Telecom Express, Inc. ...... 8,100 168,075
----------
298,475
----------

TOTAL COMMON STOCK
(Identified Cost $140,143,063) 160,244,591
-----------

PRINCIPAL
DESCRIPTION AMOUNT VALUE(A)
-------------------------------------------------------------------------------

SHORT TERM INVESTMENT-- 1.5%

Repurchase Agreement with State Street Bank & Trust Co.
dated 9/29/2000 at 5.25% to be repurchased at
$2,438,066 on 10/02/2000, collateralized by
$2,450,000 U.S. Treasury Note, 4.875%,
due 3/31/2001 with a value of $2,489,813 $2,437,000 $ 2,437,000
----------

TOTAL SHORT TERM INVESTMENT
(Identified Cost $2,437,000) ................ 2,437,000
----------

TOTAL INVESTMENTS-- 97.4%
(Identified Cost $142,580,063) (b) .......... 162,681,591
Other assets less liabilities ................ 4,325,768
----------

TOTAL NET ASSETS-- 100.0% .................... $ 167,007,359
=================

(a) See Note 2 of Notes to Financial Statements.

(b) Federal Tax Information: At
September 30, 2000 the net
unrealized appreciation on
investments based on cost of
$142,876,648 for federal income tax
purposes was as follows:

Aggregate gross unrealized appreciation
for all investments in which there is
an excess of value over tax cost. $ 31,999,687
Aggregate gross unrealized depreciation
for all investments in which there is
an excess of tax cost over value (12,194,744)
------------
Net unrealized appreciation $ 19,804,943
================

See accompanying notes to financial statements.

11
<PAGE>
KOBRICK GROWTH FUND - SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
Investments as of September 30, 2000

INVESTMENTS -- 101.9% OF TOTAL NET ASSETS

DESCRIPTION SHARES VALUE(A)
-------------------------------------------------------------------------------

COMMON STOCKS-- 97.8%
BANKS-MAJOR REGIONAL--5.3%
First Union Corp. ...................... 48,800 $ 1,570,750
Firstar Corp. .......................... 127,700 2,857,287
PNC Bank Corp. ......................... 25,100 1,631,500
Washington Mutual, Inc. ................ 45,000 1,791,563
----------
7,851,100
----------

BEVERAGES-ALCOHOLIC--2.8%
Anheuser-Busch Companies, Inc. ......... 98,700 4,176,244
----------

BIOTECHNOLOGY--0.5%
Human Genome Sciences, Inc.(c) ......... 4,600 796,375
----------

BROADCAST MEDIA--4.2%
AT&T Corp., Liberty Media Group, Class A (c) 123,800 2,228,400
Comcast Corp., Special Class A(c) ...... 95,100 3,893,156
----------
6,121,556
----------

COMPUTER HARDWARE--8.0%
EMC Corp. (c) .......................... 29,700 2,944,012
Hewlett-Packard Co. .................... 12,500 1,212,500
International Business Machines Corp. .. 25,200 2,835,000
Sun Microsystems, Inc.(c) .............. 40,600 4,740,050
----------
11,731,562
----------

COMPUTER NETWORKING--3.6%
Cisco Systems, Inc. (c) ................ 87,400 4,828,850
McData Corp.(c) ........................ 4,200 516,141
----------
5,344,991
----------

COMPUTER SOFTWARE--1.2%
Software.com, Inc. (c) ................. 9,500 1,723,656
----------

CONSUMER FINANCE--6.4%
Capital One Financial Corp. ............ 39,400 2,760,462
Providian Financial Corp. .............. 51,800 6,578,600
----------
9,339,062
----------

ELECTRIC COMPANIES--7.3%
AES Corp. (c) .......................... 38,300 2,623,550
Calpine Corp.(c) ....................... 18,400 1,920,500
Constellation Energy Group ............. 54,700 2,721,325
Dynegy, Inc. ........................... 26,000 1,482,000
Pacific Gas & Electric Corp. ........... 72,600 1,756,012
Southern Energy, Inc. .................. 9,600 301,200
----------
10,804,587
----------

ELECTRONICS-INSTRUMENT--3.0%
Celestica, Inc. ........................ 37,900 $ 2,624,575
Tektronix, Inc.(c) ..................... 23,100 1,774,369
----------
4,398,944
----------

ENTERTAINMENT--2.5%
Viacom, Inc. (c) ....................... 38,000 2,223,000
Walt Disney Co. ........................ 38,200 1,461,150
----------
3,684,150
----------

FINANCIAL-DIVERSIFIED--2.0%
Citigroup, Inc. ........................ 54,266 2,933,756
----------

HEALTHCARE-DRUGS--6.1%
Pfizer, Inc. ........................... 54,500 2,449,094
Pharmacia Corp. ........................ 62,600 3,767,737
Priority Healthcare Corp. (c) .......... 35,300 2,691,625
----------
8,908,456
----------

HEALTHCARE-LONG TERM CARE--1.4%
Healthsouth Corp. (c) .................. 250,200 2,032,875
----------

HEALTHCARE-SPECIALIZED SERVICES--4.1%
Cardinal Health, Inc. .................. 51,400 4,532,837
McKesson HBOC, Inc. .................... 49,800 1,522,013
----------
6,054,850
----------

INSURANCE--1.5%
Marsh & McLennan Co., Inc. ............. 16,000 2,124,000
----------

INTERNET--0.0%
Quokka Sports, Inc. (c) ................ 14,700 58,341
----------

INVESTMENT BANKING/BROKERAGE--1.6%
Morgan Stanley Dean Witter & Co. ....... 25,000 2,285,938
----------

MANUFACTURER-DIVERSIFIED--8.0%
Tyco International, Ltd. ............... 196,000 10,167,500
Tycom, Ltd.(c) ......................... 40,900 1,569,537
----------
11,737,037
----------

MEDICAL PRODUCTS & SUPPLIES--3.2%
Mallinckrodt, Inc. ..................... 102,700 4,685,688
----------

OIL & GAS-DRILLING & EQUIPMENT--1.2%
R&B Falcon Corp. (c) ................... 62,600 1,744,975
----------

See accompanying notes to financial statements.

12
<PAGE>

KOBRICK GROWTH FUND - SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
Investments as of September 30, 2000

INVESTMENTS - CONTINUED

DESCRIPTION SHARES VALUE(A)
--------------------------------------------------------------------------------

Oil & GAS-EXPLORATION & PRODUCTION--4.9%
Anadarko Petroleum Corp. ............... 51,300 $ 3,409,398
Exxon Mobil Corp. ...................... 42,900 3,823,463
----------
7,232,861
----------

OIL & GAS-SERVICES--0.9%
Halliburton Co. ........................ 26,400 1,291,950
----------

RETAIL-FOOD CHAINS--1.9%
Kroger Co. (c) ......................... 124,100 2,800,006
----------

RETAIL-GENERAL MERCHANDISE--1.8%
Wal-Mart Stores, Inc. .................. 56,200 2,704,625
----------

RETAIL-SPECIALTY--1.8%
CVS Corp. .............................. 58,100 2,690,756
----------

SEMICONDUCTOR-ELECTRONIC--7.2%
Conexant Systems, Inc(c) ............... 62,000 2,596,250
Flextronics International, Ltd. (c) .... 36,500 2,997,562
Maxim Integrated Products, Inc. (c) .... 18,000 1,447,875
SDL, Inc. (c) .......................... 11,500 3,557,094
----------
10,598,781
----------

TELEPHONE--0.6%
CTC Communications Group, Inc. (c) ..... 46,250 936,563
----------

TELECOMMUNICATIONS-EQUIPMENT--3.3%
Cosine Communications, Inc(c) .......... 5,000 277,813
Next Level Communications,Inc. (c) ..... 27,500 1,818,437
Nortel Networks Corp. .................. 46,100 2,745,831
----------
4,842,081
----------

TELECOMMUNICATIONS-LONG DISTANCE--1.5%
Qwest Communications International, Inc. (c) 46,600 2,239,713
----------

TOTAL COMMON STOCK
(Identified Cost $131,021,799) 143,875,479
-----------

PRINCIPAL
DESCRIPTION AMOUNT VALUE(A)
-------------------------------------------------------------------------------

SHORT TERM INVESTMENT--4.1%

Repurchase Agreement with State Street
Bank & Trust Co. dated 9/29/2000 at 5.25% to
be repurchased at $5,966,609 on 10/02/2000,
collateralized by $5,625,000 U.S. Treasury
Bond, 6.625%, due 2/15/2027 with a value
of $6,086,289 ...............................$ 5,964,000 $ 5,964,000
----------------

TOTAL SHORT TERM INVESTMENT
(Identified Cost $5,964,000) ................ 5,964,000
----------------

TOTAL INVESTMENTS--101.9%
(Identified Cost $136,985,799) (b) .......... 149,839,479
Other assets less liabilities (2,779,648)
----------------

TOTAL NET ASSETS--100.0% $ 147,059,831
================

(a) See Note 2 of Notes to Financial Statements.

(b) Federal Tax Information: At
September 30, 2000 the net
unrealized appreciation on
investments based on cost of
$138,138,581 for federal income tax
purposes was as follows:

Aggregate gross unrealized appreciation
for all investments in which there is
an excess of value over tax cost $ 15,201,086
Aggregate gross unrealized depreciation
for all investments in which there is
an excess of tax cost over value (3,500,188)
----------------
Net unrealized appreciation $ 11,700,898
================

See accompanying notes to financial statements.

13
<PAGE>

STATEMENTS OF ASSETS & LIABILITIES
--------------------------------------------------------------------------------
SEPTEMBER 30, 2000

KOBRICK KOBRICK KOBRICK
CAPITAL EMERGING GROWTH GROWTH
FUND FUND FUND
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at value
Securities (cost $282,391,637, $140,143,063
and $131,021,799, respectively) $ 313,106,639 $ 160,244,591 $ 143,875,479
Repurchase Agreements 7,583,000 2,437,000 5,964,000
Cash .................................................. 830 395 493
Investments held as collateral for loaned securities .. 30,241,974 32,147,255 3,789,899
Dividends and interest receivable ..................... 55,961 15,227 73,412
Receivable for securities sold ........................ 30,538,517 6,199,229 3,340,206
Receivable for Fund shares sold ....................... 622,197 261,685 311,482
Securities lending income receivable .................. 29,167 29,167 8,334
Deferred organizational costs ......................... 18,302 18,300 --
------------- ------------- --------------
TOTAL ASSETS 382,196,587 201,352,849 157,363,305

LIABILITIES
Payable for securities purchased ...................... 25,446,627 1,859,743 6,183,392
Collateral on securities loaned, at value ............. 30,241,974 32,147,255 3,789,899
Payable for Fund shares redeemed ...................... 634,343 150,200 153,661
Investment advisory fee payable ....................... 200,132 81,933 90,495
Deferred Trustees' fees ............................... 3,534 1,691 1,525
Accounts payable and accrued expenses ................. 159,684 104,668 84,502
------------- ------------- --------------
TOTAL LIABILITIES 56,686,294 34,345,490 10,303,474
------------- ------------- --------------
NET ASSETS $ 325,510,293 $ 167,007,359 $ 147,059,831
============== ============= =============

NET ASSETS CONSIST OF:
Paid in capital ....................................... $ 325,381,579 $ 153,128,526 $ 126,183,440
Undistributed net investment income (loss) ............ (3,534) (1,691) (1,525)
Accumulated net realized gain (loss) on investments ... (30,582,754) (6,221,004) 8,024,236
Net unrealized appreciation (depreciation) of
investments 30,715,002 20,101,528 12,853,680
------------- ------------- --------------

NET ASSETS $ 325,510,293 $ 167,007,359 $ 147,059,831
============== ============= =============

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE:
CLASS A SHARES:
Net assets ............................................ $ 193,897,180 $ 111,658,333 $ 103,087,425
============== ============= =============
Shares of beneficial interest ......................... 10,179,775 5,741,288 4,757,367
============== ============= =============
Net asset value and redemption price per share ........ $ 19.05 $ 19.45 $ 21.67
============== ============= =============

Offering price per share (100/94.25 of net asset
value, based on single purchases of less than $50,000;
reduced sales charges apply for purchases in excess
of this amount) ....................................... $ 20.21 $ 20.64 $ 22.99
============== ============= =============
CLASS B SHARES: (redemption price is equal to net
asset value less any applicable contingent
deferred sales charges)
Net assets ............................................ $ 89,645,073 $ 41,601,090 $ 35,680,196
============== ============= =============
Shares of beneficial interest ......................... 4,736,916 2,150,637 1,656,897
============== ============= =============
Net asset value and offering price per share .......... $ 18.92 $ 19.34 $ 21.53
============== ============= =============

CLASS C SHARES: (redemption price is equal to net
asset value less any applicable contingent
deferred sales charges)
Net assets ............................................ $ 16,247,285 $ 9,804,149 $ 6,546,445
============== ============= =============
Shares of beneficial interest ......................... 858,495 506,981 303,921
============== ============= =============
Net asset value and offering price per share .......... $ 18.93 $ 19.34 $ 21.54
============== ============= =============
CLASS Y SHARES:
Net assets ............................................ $ 25,720,755 $ 3,943,787 $ 1,745,765
============== ============= =============
Shares of beneficial interest ......................... 1,347,251 202,358 80,342
============== ============= =============
Net asset value, offering and redemption price per share $ 19.09 $ 19.49 $ 21.73
============== ============= =============

</TABLE>

See accompanying notes to financial statements.

14
<PAGE>

STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 2000

KOBRICK KOBRICK KOBRICK
CAPITAL EMERGING GROWTH GROWTH
FUND FUND FUND
------------- ----------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes
of $552, $3,185, and $2,485, respectively)............. $ 668,060 $ 215,028 $ 431,826
Interest .............................................. 1,643,007 811,221 269,022
Securities lending income ............................. 58,334 58,334 16,668
------------- ------------- ---------------
2,369,401 1,084,583 717,516

EXPENSES
Investment advisery fees .............................. 2,851,423 1,354,763 1,068,635
Service fees - Class A ................................ 480,043 253,062 210,646
Service and distribution fees - Class B ............... 550,051 245,432 177,121
Service and distribution fees - Class C ............... 101,034 60,549 41,538
Trustees' fees and expenses ........................... 21,748 15,103 14,397
Accounting and administrative fees .................... 144,067 78,780 66,948
Custodian fees ........................................ 133,158 101,702 99,432
Transfer agent fees - Class A, Class B, Class C ....... 530,727 285,372 203,390
Transfer agent fees - Class Y ......................... 28,025 3,676 752
Audit and tax services ................................ 29,000 29,000 29,000
Legal fees ............................................ 37,397 17,269 15,089
Printing .............................................. 19,407 8,623 6,735
Registration fees ..................................... 92,778 81,702 69,001
Amortization of organizational costs .................. 9,586 9,588 --
Other ................................................. 14,392 6,451 6,995
------------- ------------- ---------------
Total expenses before reductions 5,042,836 2,551,072 2,009,679
------------- ------------- ---------------

Less fees waived/deferred by investment adviser ....... (325,567) (287,633) (351,481)
Less other reductions ................................. (93,170) (5,734) (129,338)
------------- ------------- ---------------
Net expenses .......................................... 4,624,099 2,257,705 1,528,860
------------- ------------- ---------------
Net investment income (loss) .......................... (2,254,698) (1,173,122) (811,344)
------------- ------------- ---------------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) on investments - net ............. (30,206,023) (5,944,321) 9,912,487
Change in unrealized appreciation (depreciation)
of investments - net .................................. 25,849,085 15,361,939 11,832,995
------------- ------------- ---------------
Net realized and unrealized gain (loss) on investments (4,356,938) 9,417,618 21,745,482
------------- ------------- ---------------

NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (6,611,636) $ 8,244,496 $ 20,934,138
============== ============= ===============

</TABLE>

See accompanying notes to financial statements.

15
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

KOBRICK KOBRICK KOBRICK
CAPITAL EMERGING GROWTH GROWTH
FUND FUND FUND
------------------------- ------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
------------------------- ------------------------- -------------------------
2000 1999 2000 1999 2000 1999
---------- ---------- ----------- ------------ ----------- -----------

<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) ...... $(2,254,698) $(852,881) $(1,173,122) $(472,282) $(811,344) $(161,123)
Net realized gain (loss)
on investments .................. (30,206,023) 16,177,706 (5,944,321) 10,214,647 9,912,487 (1,064,205)
Change in unrealized appreciation
(depreciation) on investments ... 25,849,085 1,627,744 15,361,939 4,046,441 11,832,995 975,250
------------ ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets
resulting from operations ....... (6,611,636) 16,952,569 8,244,496 13,788,806 20,934,138 (250,078)
------------ ----------- ----------- ----------- ----------- -----------

FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ......................... -- -- -- -- -- (273)
Net realized capital gains
Class A ......................... (15,058,424) -- (8,538,224) -- -- --
------------ ----------- ----------- ----------- ----------- -----------
(15,058,424) -- (8,538,224) -- -- (273)
------------ ----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM CAPITAL SHARE
TRANSACTIONS ...................... 244,301,318 58,463,760 115,126,397 20,055,647 79,298,613 46,022,992
------------ ----------- ------------ ----------- ----------- -----------
Total increase (decrease) in
net assets ....................... 222,631,258 75,416,329 114,832,669 33,844,453 100,232,751 45,772,641
----------- ----------- ------------ ---------- ----------- -----------

NET ASSETS
Beginning of year ................. 102,879,035 27,462,706 52,174,690 18,330,237 46,827,080 1,054,439
------------ ----------- ----------- ----------- ----------- -----------
End of year ....................... $325,510,293 $102,879,035 $167,007,359 $ 52,174,690 $ 147,059,831 $ 46,827,080
============ =========== ============ =========== =========== ===========

UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) .................... $ (3,534) $ -- $ (1,691) $ -- $ (1,525) $ --
============ =========== =========== =========== =========== ===========

</TABLE>

See accompanying notes to financial statements.

16
<PAGE>

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
KOBRICK CAPITAL FUND

For a share outstanding throughout each period.

FOR THE
PERIOD
YEAR ENDED 1997(A) THROUGH
SEPTEMBER 30, DECEMBER 31, FOR THE PERIOD
----------------- SEPTEMBER 30, OCTOBER 29, 1999(A) THROUGH
2000 1999 1998 SEPTEMBER 30, 2000
--------------------- ------- ----------------------------
CLASS A CLASS B CLASS C CLASS Y
------------------------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of the period ...... $ 17.21 $ 10.71 $ 10.00 $ 15.64 $ 15.64 $ 15.64
------- ------- ------- ------- ------- -------

Income (loss) from investment operations
Net investment income (loss) (c) ........... (0.14) (0.18) (0.13) (0.24) (0.25) (0.08)
Net realized and unrealized
gain (loss) on investments ................ 4.35(g) 6.68 0.84 3.52(g) 3.54(g) 3.53(g)
---- ---- ---- ---- ---- ----

Total from investment operations .............. 4.21 6.50 0.71 3.28 3.29 3.45
---- ---- ---- ---- ---- ----

Less distributions
Distributions from net realized
capital gains ............................ (2.37) -- -- -- -- --
---- ---- ---- ---- ---- ----
Total distributions ........................... (2.37) -- -- -- -- --
---- ---- ---- ---- ---- ----

Net asset value, end of the period ............ $ 19.05 $ 17.21 $ 10.71 $ 18.92 $ 18.93 $ 19.09
======= ======= ======= ======= ======= =======

Total return (%) (b) ......................... 27.99 60.69 7.10 20.97 21.04 22.06

Net assets, end of the period (000) ........... $ 193,897 $ 102,879 $ 27,463 $ 89,645 $16,247 $25,721

Ratios to average net assets:
Expenses (%) (d)(e) ....................... 1.51 1.75 1.75 2.25 2.25 1.25
Expenses after expense reductions (%) (d)(e) 1.48(f) 1.75 1.75 2.21(f) 2.21(f) 1.22(f)
Net investment income (loss) (%)(d) ....... (0.67) (1.09) (1.38) (1.29) (1.32) (0.43)

Portfolio turnover rate (%) ................... 1,320 778 350 1,320 1,320 1,320

</TABLE>

(a) Commencement of operations.

(b) A sales charge for Class A shares or contingent deferred sales charge for
Class B and Class C shares is not reflected in total return calculations.
Had certain expenses not been reduced during the periods shown, total
returns would have been lower. Periods less than one year are not
annualized.

(d) Computed on an annualized basis for periods less than one year.

(e) Kobrick Funds LLC agreed to reimburse a portion of the Fund's expenses
during the periods shown. Without these reimbursements, expense ratios
would have been higher.

(f) The Fund has entered into agreements with certain brokers whereby the
brokers rebate a portion of brokerage commissions. The rebated commissions
are used to reduce operating expenses of the Fund.

(g) Amount shown for a share outstanding does not correspond with the net
realized and unrealized gain (loss) on investments due to the timing of
sales and repurchases of Fund shares in relation to fluctuating market
values of the investments of the Fund.

See accompanying notes to financial statements.

17
<PAGE>

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

KOBRICK EMERGING GROWTH FUND
For a share outstanding throughout each period.

<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of the period ....... $ 16.54 $10.14 $ 10.00 $ 15.19 $ 15.19 $ 15.19
------- ------ ------- -------- -------- --------
Income from investment operations
Net investment income (loss) (c) ............... (0.15) (0.18) (0.11) (0.25) (0.26) (0.07)
Net realized and unrealized gain
(loss) on investments ........................ 5.77 6.58 0.25(g) 4.40 4.41 4.37
---- ---- ---- ---- ---- ----
Total from investment operations ............... 5.62 6.40 0.14 4.15 4.15 4.30
---- ---- ---- ---- ---- ----

Less distributions
Distributions from net realized capital gains .. (2.71) -- -- -- -- --
---- ---- ---- ---- ---- ----
Total distributions ............................ (2.71) -- -- -- -- --
---- ---- ---- ---- ---- ----

Net asset value, end of the period ............. $ 19.45 $16.54 $10.14 $ 19.34 $ 19.34 $ 19.49
======= ====== ====== ======== ======== ========

Total return (%)(b) ............................ 39.24 63.12 1.40 27.32 27.32 28.31

Net assets, end of the period (000) ............ $ 111,658 $ 52,175 $ 18,330 $ 41,601 $ 9,804 $ 3,944

Ratios to average net assets:
Expenses (%) (d)(e) ............................ 1.51 1.75 1.75 2.25 2.25 1.25
Expenses after expense reductions (%) (d)(e) ... 1.51(f) 1.75 1.75 2.25(f) 2.25(f) 1.25(f)
Net investment income (loss) (%)(d) ............ (0.73) (1.24) (1.16) (1.37) (1.38) (0.37)

Portfolio turnover rate (%) .................... 678 442 287 678 678 678

</TABLE>

(a) Commencement of operations.

(d) Computed on an annualized basis for periods less than one year.

(e) Kobrick Funds LLC agreed to reimburse a portion of the Fund's expenses
during the periods shown. Without these reimbursements, expense ratios
would have been higher.

(f) The Fund has entered into agreements with certain brokers whereby the
brokers rebate a portion of brokerage commissions. The rebated commissions
are used to reduce operating expenses of the Fund.

See accompanying notes to financial statements.

18
<PAGE>

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

KOBRICK GROWTH FUND
For a share outstanding throughout each period.

FOR THE
PERIOD
YEAR ENDED 1997(A) THROUGH
SEPTEMBER 30, DECEMBER 31, FOR THE PERIOD
----------------- SEPTEMBER 30, OCTOBER 29, 1999(A) THROUGH
2000 1999 1998 SEPTEMBER 30, 2000
--------------------- ------- ----------------------------
CLASS A CLASS B CLASS C CLASS Y
------------------------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of the period ....... $ 15.41 $ 10.32 $10.00 $ 16.21 $ 16.21 $ 16.21
-------- ------- ------ -------- -------- --------

Income from investment operations
Net investment income (loss) (c) ............... (0.13) (0.08) 0.00(h) (0.26) (0.26) (0.06)
Net realized and unrealized gain (loss)
on investments ............................... 6.39 5.17(g) 0.32 5.58 5.59 5.58
---- ---- ---- ---- ---- ----

Total from investment operations ............... 6.26 5.09 0.32 5.32 5.33 5.52
---- ---- ---- ---- ---- ----

Less distributions
Dividends from net investment income ........... -- 0.00(h) -- -- -- --
---- ---- ---- ---- ---- ----
Total distributions ............................ -- 0.00 -- -- -- --
---- ---- ---- ---- ---- ----

Net asset value, end of the period ............. $ 21.67 $ 15.41 $10.32 $ 21.53 $ 21.54 $ 21.73
======== ======= ====== ======== ======== ========

Total return (%)(b) ............................ 40.62 49.35 3.20 32.82 32.88 34.05

Net assets, end of the period (000) ............ $103,087 $46,827 $1,054 $ 35,680 $ 6,546 $ 1,746

Ratios to average net assets:
Expenses (%) (d)(e) ............................ 1.40 1.40 1.40 2.15 2.15 1.15
Expenses after expense reductions (%) (d) ...... 1.29(f) 1.40 1.40 1.99 2.01 0.95
Net investment income (loss) (%) (d) ........... (0.62) (0.55) 0.32 (1.30) (1.32) (0.28)

Portfolio turnover rate (%) .................... 826 632 11 826 826 826

</TABLE>

(a) Commencement of operations.

(d) Computed on an annualized basis for periods less than one year.

(e) Kobrick Funds LLC agreed to reimburse a portion of the Fund's expenses
during the periods shown. Without these reimbursements, expense ratios
would have been higher.

(f) The Fund has entered into agreements with certain brokers whereby the
brokers rebate a portion of brokerage commissions. The rebated commissions
are used to reduce operating expenses of the Fund.

(h) Amount is less than $0.01.

See accompanying notes to financial statements.
19
<PAGE>

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

For the Year Ended September 30, 2000

NOTE 1-- ORGANIZATION

The Nvest Kobrick Investment Trust, a Massachusetts business trust (the
"Trust"), was organized on October 10, 1997, and is registered under the
Investment Company Act of 1940, as amended, (the "1940 Act") as a diversified
open-end management investment company. The Declaration of Trust permits the
Trustees to issue an unlimited number of shares of beneficial interest of the
Trust in multiple series. The Trust consists presently of three separate series:
Kobrick Capital Fund, Kobrick Emerging Growth Fund and Kobrick Growth Fund
(individually, a "Fund" and, collectively, the "Funds"). The investment
objective of the Kobrick Capital Fund is to seek maximum capital appreciation by
investing primarily in equity securities of companies with small, medium and
large capitalizations. The investment objective of the Kobrick Emerging Growth
Fund is to seek to provide growth of capital by investing primarily in equity
securities of emerging growth companies, with an emphasis on companies with
small capitalizations. The investment objective of the Kobrick Growth Fund is to
seek long-term growth of capital by investing primarily in equity securities of
companies with large capitalizations that the Fund's investment adviser believes
have better than average long-term growth potential.

The Funds' investment adviser is Kobrick Funds LLC ("Kobrick"), a wholly owned
subsidiary of Nvest Companies, L.P. ("Nvest"), which is a subsidiary of
Metropolitan Life Insurance Company. (See Note 9.) Kobrick was formed in May
1999 and on July 7, 1999 the business carried on by its predecessor ("former
adviser") was contributed to Kobrick.

At a meeting of the Funds' Board of Trustees held on October 5, 1999, the Board
authorized the Funds to issue multiple classes of shares. Effective November 1,
1999, the Funds publicly offer Class A, Class B, Class C and Class Y shares.
Class A shares purchased after October 29, 1999 are sold with a maximum front
end sales charge of 5.75%. All shareholders invested in any of the Funds before
the new share classes became effective were automatically converted to Class A
"load waived" shares and were allowed to continue to invest without paying any
commissions. Class B shares do not pay a front end sales charge, but pay a
higher ongoing distribution fee than Class A shares for eight years (at which
point they automatically convert to Class A shares), and are subject to a
contingent deferred sales charge if those shares are redeemed within six years
of purchase. Class C shares do not pay a front end sales charge and do not
convert to any class of shares, but they do pay a higher ongoing distribution
fee than Class A shares and may be subject to a contingent deferred sales charge
if those shares are redeemed within one year. Class Y shares do not pay a front
end sales charge, a contingent deferred sales charge or distribution fees. They
are intended for institutional investors and impose certain eligibility and
investment requirements. Expenses of a Fund are borne pro rata by the holders of
each class of shares, except that each class bears expenses unique to that class
(including the Rule 12b-1 service and distribution fees and transfer agent fees
applicable to such class), and votes as a class with respect to its own Rule
12b-1 Plan. Shares of each class would receive their pro rata share of the net
assets of the Fund, if the Fund were liquidated.

NOTE 2-- SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States for investment companies. The preparation of financial statements
in accordance with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those
estimates.

SECURITY VALUATION: Each Fund's investment securities which are traded on
stock exchanges or are quoted by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") are valued at the last
reported sale prices as of the close of the regular session of trading on
the New York Stock Exchange ("NYSE") on the day the securities are valued,
or if not traded on a particular day, at the closing bid prices. Securities
traded in the over-the-counter market, and which are not quoted by NASDAQ,
are valued at the last sale prices (or, if the last sale prices are not
readily available, at the last bid prices as quoted by the brokers that
make markets in the securities) as of the close of the regular session of
trading on the NYSE on the day the securities are being valued. Securities
which are traded both in the over-the-counter market and on a stock
exchange are valued according to the broadest and most representative
market. Short-term investments with maturities less than 60 days are valued
at amortized cost which approximates market value. Options, interest rate
futures and options thereon that are tracked on exchanges are valued at
their last sale price as of the close of such exchanges. Securities for
which current market quotations are not readily available are valued at
their fair value as determined in good faith in accordance with procedures
approved by the Board of Trustees.

REPURCHASE AGREEMENTS: Each Fund may enter into repurchase agreements with
institutions that Kobrick has determined are creditworthy. The repurchase
agreements are collateralized by U.S. Government securities. The Funds'
custodian takes possession of the underlying collateral on behalf of the
Funds. It is the policy of the Funds to value the underlying collateral
daily on a mark-to-market basis to determine that the value of the
collateral held, including accrued interest, is at least equal to 102% of
the repurchase price. In the event of default of the obligation to
repurchase, the Funds have the right to liquidate the collateral and apply
the proceeds in satisfaction of the obligation. Under certain
circumstances, in the event of default or bankruptcy by the other party to
the agreement, realization and/or retention of the collateral or proceeds
may be subject to delay due to legal proceedings and the Fund may suffer a
loss.

SECURITY TRANSACTIONS AND INVESTMENT INCOME: Investment security
transactions are recorded on trade date. Realized gains and losses on
investments sold are recorded based on the specific identification method.
Dividend income on investment securities, less foreign taxes withheld, if
any, is recorded on ex-dividend date. Interest income on investment
securities is recorded on an accrual basis.

EXPENSES: Certain of the Trust's expenses are allocated equally to those
Funds which make up the Trust. Other expenses of the Trust are allocated to
the respective Funds based upon the relative net assets of each Fund.
Operating expenses directly attributable to a Fund are charged to that
Fund's operations.

20
<PAGE>

NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------

FOR THE YEAR ENDED SEPTEMBER 30, 2000

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Trustees approve separate
dividends on each class of shares. It is the policy of each Fund to declare
and pay dividends from net investment income at least annually. Each Fund
will distribute net realized capital gains (including net short-term
capital gains) unless offset by any available capital loss carryforward at
least annually. Income distributions and capital gain distributions are
determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These differences are
due primarily to differing treatments of income and gain on various
investment securities held by the Funds, timing differences and differing
characterizations of distributions made by the Funds. Permanent book and
tax differences will result in reclassifications to capital accounts.

FEDERAL INCOME TAXES: Each Fund intends to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), by complying with the provisions available to
regulated investment companies, as defined in applicable sections of the
Code, and to make distributions of taxable income to shareholders
sufficient to relieve each Fund from all or substantially all federal
income taxes. Accordingly, no provision for federal income tax has been
made. At September 30, 2000, the Kobrick Capital Fund had a capital loss
carryforward of $1,117,558 and the Kobrick Emerging Growth Fund had a
capital loss carryforward of $1,500,588, all of which will expire on
September 30, 2008. The Kobrick Capital Fund, Kobrick Emerging Growth Fund
and Kobrick Growth Fund elected to defer losses of $28,303,857, $4,423,831
and $143,783, respectively, to their fiscal years ending September 30,
2001.

ORGANIZATION COSTS: Costs and expenses of the Trust in connection with the
organization of the Trust and the initial offering of shares of each Fund,
excluding the Kobrick Growth Fund, have been deferred by the Trust and are
being amortized on a straight-line basis from the date operations commenced
over a period that a benefit is expected to be realized, not to exceed
sixty months. If any of the initial shares of the Kobrick Capital Fund and
Kobrick Emerging Growth Fund are redeemed during the amortization period of
these organizational costs by any holder thereof, the redemption proceeds
will be reduced by a pro rata portion of the unamortized organizational
costs. Organizational costs associated with the Kobrick Growth Fund have
been borne by Kobrick.

LINE OF CREDIT: The Trust has entered into a $7,500,000 committed line of
credit with State Street Bank and Trust Company ("State Street").
Borrowings under this line of credit agreement may not exceed 5% of each
Fund's total assets and may not exceed prospectus limitations. Interest on
borrowings is payable at the State Street's Cost of Funds plus 0.75% per
annum. Under this Agreement, the Trust has agreed to pay a 0.10% per annum
fee on the unused portion of the commitment, payable quarterly in arrears.
For the year ended September 30, 2000, the Trust had no borrowings against
the line of credit.

NOTE 3-- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEES: The Trust has entered into an investment advisory
agreement (the "Advisory Agreement") with Kobrick. Under the agreement, Kobrick
provides investment management services to the Trust, and is entitled to receive
a fee, computed daily and paid monthly, at the annual rate of 1.00% based on
average daily net assets of each Fund.

ACCOUNTING AND ADMINISTRATIVE EXPENSE: Nvest Services Company, Inc. ("NSC") is a
subsidiary of Nvest and performs certain accounting and administrative services
for the Funds including : (i) performing bookkeeping, accounting and financial
reporting functions and clerical functions relating to the Funds and (ii)
services required in connection with the preparation of registration statements
and prospectuses, registration of shares in various states, shareholder reports
and notices, proxy solicitation material furnished to shareholders of the Funds
or regulatory authorities and reports and questionnaires for SEC compliance. For
the services provided, each Fund pays NSC the greater of the following: (i) an
annual fee payable in equal monthly installments equal to $70,000 per Fund; or
(ii) a monthly fee at the annual rate of 0.07% of the first $100 million of the
Fund's average daily net assets, 0.05% of the next $300 million of the Fund's
average daily net assets and 0.03% of such assets in excess of $400 million. For
the year ended September 30, 2000, the Kobrick Capital Fund, Kobrick Emerging
Growth Fund and Kobrick Growth Fund paid NSC $139,067, $73,780 and $61,948,
respectively. Prior to October 1, 1999, State Street provided the accounting and
administrative services.

TRANSFER AGENT FEES: NSC is the transfer and shareholder servicing agent and
Boston Financial Data Services, Inc. ("BFDS") serves as the sub-transfer agent
for the Funds. NSC receives account fees for Class A, Class B and Class C
shareholder accounts. NSC and BFDS are also reimbursed by the Funds for
out-of-pocket expenses. Class Y shares bear a transfer agent fee of 0.10% of
average daily net assets. For the year ended September 30, 2000, the Kobrick
Capital Fund, Kobrick Emerging Growth Fund and Kobrick Growth Fund paid
$364,791, $195,497 and $135,754, respectively, to NSC as compensation for its
services in that capacity. Prior to October 1, 1999, BFDS provided transfer
agent and shareholder services.

SERVICE AND DISTRIBUTION FEES: Pursuant to Rule 12b-1 under the 1940 Act, the
Trust has adopted a Service Plan relating to the Funds' Class A shares (the
"Class A Plan") and Service and Distribution Plans relating to the Funds' Class
B and Class C shares (the "Class B and Class C Plans").

Under the Class A Plan, each Fund pays Nvest Funds Distributor, L.P. ("Nvest
Distributor"), the Funds' distributor, (a wholly owned subsidiary of Nvest) a
monthly service fee at the annual rate of 0.25% of the average daily net assets
attributable to each Fund's Class A shares, as reimbursement for expenses
(including certain payments to securities dealers, who may be affiliated with
Nvest Distributor) incurred by Nvest Distributor in providing personal services
to investors owning Class A shares and/or the maintenance of shareholder
accounts. For the year ended September 30, 2000, the Kobrick Capital Fund,
Kobrick Emerging Growth Fund and Kobrick Growth Fund paid Nvest Distributor
$480,043, $253,062 and $210,646, respectively under the Class A Plan.

21
<PAGE>

NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------

FOR THE YEAR ENDED SEPTEMBER 30, 2000

Under the Class B and Class C Plans, each Fund pays Nvest Distributor a monthly
service fee at the annual rate of 0.25% of the average daily net assets
attributable to each Fund's Class B and Class C shares, as compensation for
services provided and expenses (including certain payments to securities
dealers, who may be affiliated with Nvest Distributor) incurred by Nvest
Distributor in providing personal services to investors in Class B and Class C
shares or the maintenance of shareholder accounts. For the year ended September
30, 2000, the Kobrick Capital Fund, Kobrick Emerging Growth Fund and Kobrick
Growth Fund paid Nvest Funds $137,513, $61,358 and $44,280 respectively under
the Class B Plan and $25,259, $15,137 and $10,385, respectively under the Class
C Plan.

Also under the Class B and Class C Plans, each Fund pays Nvest Distributor a
monthly distribution fee at the annual rate of 0.75% of the average daily net
assets attributable to the Fund's Class B and Class C shares, as compensation
for services provided and expenses (including certain payments to securities
dealers, who may be affiliated with Nvest Distributor) incurred by Nvest
Distributor in connection with the marketing or sale of Class B and Class C
shares. For the year ended September 30, 2000, the Kobrick Capital Fund, Kobrick
Emerging Growth Fund and Kobrick Growth Fund paid Nvest Distributor $412,538,
$184,074 and $132,841, respectively under the Class B Plan and $75,775, $45,412
and $31,153, respectively under the Class C Plan.

Commissions (including contingent deferred sales charges) on Fund shares paid to
Nvest Distributor by investors in shares of the Kobrick Capital Fund, Kobrick
Emerging Growth Fund and Kobrick Growth Fund during the year ended September 30,
2000, amounted to $2,304,229, $1,013,269 and $719,799, respectively.

TRUSTEES FEES AND EXPENSES: No officer, director or employee of Kobrick, or any
affiliate thereof, receives any compensation from the Trust for serving as
Trustee or officer of the Trust. Each Trustee who is not an "affiliated person"
receives an annual retainer fee from the Trust of $4,000 and, effective June 5,
2000, meeting attendance fees of $2,000 for each meeting of the Board of
Trustees attended. Effective June 5, 2000, each audit and operations committee
member receives a fee of $2,000 for each audit and operations committee meeting
attended. The Trust also reimburses out-of-pocket expenses incurred by each
Trustee for attending such meetings.

A deferred compensation plan is available to the Trustees on a voluntary basis.
Upon distribution, each participating Trustee will receive an amount equal to
the value of such deferred compensation, had it been invested in the Funds
selected by each Trustee on the normal payment date. Deferred amounts remain in
the Funds until distributed in accordance with the Plan.

NOTE 4-- EXPENSE REDUCTIONS AND CONTINGENT EXPENSE OBLIGATION
Effective November 1, 1999, Kobrick has given a binding undertaking to the
Funds, through at least January 31, 2001, to limit the amount of total expenses,
excluding certain expenses, to 1.50%, 2.25%, 2.25% and 1.25% of the average
daily net assets for the Class A, B, C and Y shares, respectively of the Kobrick
Capital Fund and Kobrick Emerging Growth Fund and 1.40%, 2.15%, 2.15% and 1.15%
for the Class A, B, C and Y shares, respectively of the Kobrick Growth Fund.
Accordingly, to the extent total expenses exceed the amount of the respective
limit, Kobrick will reduce its management fees and/or reimburse the Funds for
certain expenses. With respect to each Fund, Kobrick shall be permitted to
recover expenses it has borne after November 1, 1999 (whether through reduction
of its management fee or otherwise) in later periods to the extent that a Fund's
expenses fall below the rates set forth above; provided however, that a Fund is
not obligated to pay any such amounts more than one year after the end of the
fiscal year in which the fee was deferred. For the year ended September 30,
2000, Kobrick deferred $298,436, $263,664 and $322,191 of its management fees
for the Kobrick Capital Fund, Kobrick Emerging Growth Fund and Kobrick Growth
Fund, respectively.

Until October 29, 1999, the Funds had only one class of shares and Kobrick
agreed to limit expenses to the annual rates of 1.75%, 1.75% and 1.40% of
average daily net assets for the Kobrick Capital Fund, Kobrick Emerging Growth
Fund and Kobrick Growth Fund, respectively. For the year ended September 30,
2000, Kobrick waived $27,131, $23,969 and $29,290 of its management fees for the
Kobrick Capital Fund, Kobrick Emerging Growth Fund and Kobrick Growth Fund,
respectively.

Commencing in March, 2000, the Funds entered into agreements with certain
brokers whereby the brokers will rebate a portion of brokerage commissions.
Amounts earned by the Funds under such agreements are presented as reductions of
expenses in the Statements of Operations. For the year ended September 30, 2000,
expenses were reduced by $93,170, $5,734 and $129,338 for the Kobrick Capital
Fund, Kobrick Emerging Growth Fund and Kobrick Growth Fund, respectively.

NOTE 5--PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate amounts of purchases and sales of investment securities, excluding
short-term investments, for the year ended September 30, 2000, were as follows:

PURCHASES SALES
---------------- ----------------
Kobrick Capital Fund .......... $ 3,517,289,558 $ 3,297,365,089
---------------- ----------------
Kobrick Emerging Growth Fund .. $ 918,350,236 $ 815,842,293
---------------- ----------------
Kobrick Growth Fund ........... $ 914,203,335 $ 835,686,518
---------------- ----------------

<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------

FOR THE YEAR ENDED SEPTEMBER 30, 2000

NOTE 6--CAPITAL SHARES

At September 30, 2000, Cendant Corporation ("Cendant") owned 17.0%, 27.0%, and
36.0% of the Kobrick Capital Fund, Kobrick Emerging Growth Fund, and Kobrick
Growth Fund, respectively. Cendant no longer maintains an interest in the Funds'
investment adviser as a result of the contribution of business to Kobrick
described in Note 1. In conjunction with this contribution, the former adviser
has entered into an agreement with Cendant whereby certain restrictions have
been placed on Cendant's ability to redeem shares in the Funds through December
31, 2000. Partial redemptions, however, are permitted through December 31, 2000
and such redemptions could have a material impact on the net assets of the
Funds.

At September 30, 2000, there was an unlimited number of shares of beneficial
interest authorized, divided into four classes, Class A, Class B, Class C and
Class Y. Transactions in capital shares were as follows:

YEAR ENDED SEPTEMBER 30,
------------------------
2000 1999
----------------------------- ---------------------------------
KOBRICK CAPITAL FUND SHARES AMOUNT SHARES AMOUNT
-------------------- ------------ --------------- ------------ ---------------
CLASS A*
--------
<S> <C> <C> <C> <C>
Shares sold ...................................... 16,030,226 $ 350,740,448 11,084,151 $196,225,287
Shares issued in connection with the reinvestment of:
Distributions from net realized gain ............. 986,268 14,981,407 -- --
------- ---------- ---------- ------------

17,016,494 365,721,855 11,084,151 196,225,287
Shares repurchased ............................... (12,814,231) (270,607,983 (7,670,163) (137,761,527)
----------- ------------ ---------- ------------
Net increase (decrease) .......................... 4,202,263 $ 95,113,872 3,413,988 $ 58,463,760
--------- --------------- --------- ------------

FOR THE PERIOD
OCTOBER 29, 1999(A)
THROUGH
SEPTEMBER 30, 2000
------------------------------
SHARES AMOUNT
------------ -------------
CLASS B
-------
Shares sold ...................................... 5,110,363 $ 114,737,919
Shares repurchased ............................... (373,447) (7,751,507)
-------- ----------
Net increase (decrease) .......................... 4,736,916 $ 106,986,412
--------- ---------------

CLASS C
-------
Shares sold ...................................... 989,657 $ 21,547,422
Shares repurchased ............................... (131,162) (2,701,111)
-------- ----------
Net increase (decrease) .......................... 858,495 $ 18,846,311
------- ---------------

CLASS Y
-------
Shares sold ...................................... 2,492,072 $ 47,638,730
Shares repurchased ............................... (1,144,821) (24,284,007)
---------- -----------
Net increase (decrease) .......................... 1,347,251 $ 23,354,723
--------- ---------------

Increase (decrease) derived from
capital share transacions ........................ 11,144,925 $ 244,301,318 3,413,988 $ 58,463,760
========== =============== ========= ============

YEAR ENDED SEPTEMBER 30,
------------------------
2000 1999
----------------------------- ---------------------------------
KOBRICK EMERGING GROWTH FUND SHARES AMOUNT SHARES AMOUNT
-------------------- ------------ --------------- ------------ ---------------
CLASS A*

Shares sold ...................................... 17,002,298 $ 340,733,729 9,037,310 $149,214,081
Shares issued in connection with the reinvestment of:
Distributions from net realized gain ............. 577,486 8,506,362 -- --
------- ---------- ---------- ------------
17,579,784 349,240,091 9,037,310 149,214,081
Shares repurchased ............................... (14,992,359) (296,810,672) (7,690,691) (129,158,434)
----------- ------------ ---------- ------------
Net increase (decrease) .......................... 2,587,425 $ 52,429,419 1,346,619 $ 20,055,647
--------- --------------- --------- ------------

23
<PAGE>

NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------

For the Year Ended September 30, 2000

FOR THE PERIOD
OCTOBER 29, 1999(A)
THROUGH YEAR ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------------------ --------------------
SHARES AMOUNT
----------- ----------------
CLASS B
-------
Shares sold ...................................... 2,351,882 $ 50,947,821
Shares repurchased ............................... (201,245) (4,103,739)
-------- ----------
Net increase (decrease) .......................... 2,150,637 $ 46,844,082
--------- ---------------

SHARES AMOUNT
------------ -----------------
CLASS C
-------
Shares sold ...................................... 548,320 $ 11,811,166
Shares repurchased ............................... (41,339) (810,265)
------- --------
Net increase (decrease) .......................... 506,981 $ 11,000,901
------- ---------------

CLASS Y
-------
Shares sold ...................................... 360,190 $ 7,829,212
Shares repurchased ............................... (157,832) (2,977,217)
-------- ----------
Net increase (decrease) .......................... 202,358 $ 4,851,995
------- ---------------
Net increase (decrease) derived from capital
share transactions ............................... 5,447,401 $ 115,126,397 1,346,619 $ 20,055,647
========= =============== ========= ============

YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------------
2000 1999
----------------------------- ---------------------------
KOBRICK GROWTH FUND SHARES AMOUNT SHARES AMOUNT
------------------- ----------- -------------- ----------- -------------
Class A*
--------
Shares sold ...................................... 19,651,948 $ 371,992,961 3,281,085 $ 51,206,741
Shares issued in connection with the reinvestment of:
Dividends from net investment income ............. -- -- 21 273
---------- ------------- --------- ------------
19,651,948 371,992,961 3,281,106 51,207,014
Shares repurchased ............................... (17,933,965) (335,964,185 (343,911) (5,184,022)
----------- ------------ -------- ----------
Net increase (decrease) .......................... 1,717,983 $ 36,028,776 2,937,195 $ 46,022,992
--------- --------------- --------- ------------

FOR THE PERIOD
OCTOBER 29, 1999(A)
THROUGH YEAR ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
----------------------------- ---------------------
CLASS B
-------
Shares sold ...................................... 1,765,474 $ 37,723,733
Shares repurchased ............................... (108,577) (2,358,591)
-------- -----------
Net increase (decrease) .......................... 1,656,897 $ 35,365,142
--------- ---------------
CLASS C
-------
Shares sold ...................................... 325,023 $ 6,644,269
Shares repurchased ............................... (21,102) (447,028)
------- --------
Net increase (decrease) .......................... 303,921 $ 6,197,241
------- ---------------

CLASS Y
-------
Shares sold ...................................... 96,501 $ 2,045,140
Shares repurchased ............................... (16,159) (337,686)
------- --------
Net increase (decrease) .......................... 80,342 $ 1,707,454
------ ---------------

Net increase (decrease) derived from capital
share transactions ............................... 3,759,143 $ 79,298,613 2,937,195 $ 46,022,992
========= =============== ========= ============

</TABLE>

(a) Commencement of operations

* Purchases (including reinvestment of dividends) and sales of capital shares
of the Kobrick Capital Fund, Kobrick Emerging Growth Fund and Kobrick
Growth Fund by Cendant for the year ended September 30, 2000, were
purchases of 8,970,966 shares with a cost of $195,861,622, 13,722,873
shares with a cost of $269,589,903 and 17,082,451 shares with a cost of
$319,391,004, respectively; sales of 8,582,715 shares with a value of
$189,964,091, 13,365,459 shares with a value of $264,325,191 and 17,082,451
shares with a value of

24
<PAGE>

NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------

FOR THE YEAR ENDED SEPTEMBER 30, 2000

$319,391,004, respectively. Purchases (including reinvestment of dividends) and
sales of capital shares of the Kobrick Capital Fund, Kobrick Emerging Growth
Fund and Kobrick Growth Fund by Cendant for the year ended September 30, 1999,
were purchases of 5,360,968 shares with a cost of $102,259,435, 6,251,014 shares
with a cost of $105,436,604 and 2,348,936 shares with a cost of $37,044,805,
respectively; sales of 4,948,434 shares with a value of $90,259,435, 5,793,797
shares with a value of $98,436,604, and 0 shares with a value of $0,
respectively.

NOTE 7-- TRANSACTIONS WITH AFFILIATED COMPANIES
As a result of Cendant's ownership of shares of the Funds (see Note 6), it is
considered an affiliate of the Funds. Certain Funds made purchases and sales of
Cendant's common stock during the period. The transactions were as follows:

BALANCE AS OF
PURCHASES SALES SEPTEMBER 30, 2000
----------------------- ------------------------ ------------------
AFFILIATES COST SHARES COST SHARES VALUE SHARES
---------- ---- ------ ---- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Kobrick Capital Fund Cendant Corp. $ 14,458,727 756,000 $ 14,458,727 756,000 $ -- --
Kobrick Growth Fund Cendant Corp. $ 6,203,821 333,700 $ 6,677,798 355,800 $ -- --

</TABLE>

NOTE 8-- SECURITIES LENDING
The Funds have entered into an agreement with a third party to lend their
securities in order to earn additional income. Each Fund receives collateral in
the form of U.S. Treasury obligations or cash against the loaned securities and
maintains collateral in an amount not less than 102% of the market value of the
loaned securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the Funds and any
additional required collateral is delivered to the Funds on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, a Fund could experience delays and costs
in recovering the securities loaned or in gaining access to the collateral. At
September 30, 2000, the market value of loaned securities and U.S. Treasury
Bonds held as collateral were as follows:

SECURITIES LOANED COLLATERAL
------------------ --------------
Kobrick Capital Fund............. $ 29,648,994 $ 30,241,974
------------ ------------
Kobrick Emerging Growth Fund..... $ 31,516,916 $ 32,147,255
------------ ------------
Kobrick Growth Fund.............. $ 3,715,588 $ 3,789,899
------------ ------------

NOTE 9-- SUBSEQUENT EVENT
Nvest, L.P., and its affiliated operating partnership, Nvest Companies, L.P.,
have entered into an agreement for CDC Asset Management to acquire all of their
outstanding partnership units. CDC Asset Management is the investment management
arm of France's Caisse des Depots Group, which is a major diversified financial
institution. Nvest will be renamed CDC Asset Management-North America and it
will continue to use the holding company structure. Nvest affiliates,which
includes Kobrick Funds LLC, Nvest Funds Distributor, L.P. and Nvest Services
Company, will retain their investment independence, brand names, management and
operating autonomy. The transaction will not affect daily operations of the
Kobrick Funds or the investment management activities of the Funds' investment
adviser.

Consummation of the transaction with CDC Asset Management occurred on October
30, 2000. Approval of the unitholders of Nvest, L.P. and Nvest Companies L.P.
was obtained on September 19, 2000. Under the rules for mutual funds the
transaction may be viewed as a change of control for the Nvest affiliates.
Consequently, the Nvest affiliates obtained approval of new agreements from the
Board of Trustees of the Trust on August 21, 2000 and shareholders of each Fund
on October 13, 2000.

NOTE 10 - DISTRIBUTIONS (UNAUDITED)

Pursuant to Section 852 of the Internal Revenue Code, the Kobrick Capital Fund
and Kobrick Emerging Growth Fund designated $2,365,179 and $893,663,
respectively as capital gain dividends paid during the year ended September 30,
2000.

25
<PAGE>

To the Trustees of Nvest Kobrick Investment Trust and the Shareholders of
Kobrick Capital Fund, Kobrick Emerging Growth Fund and Kobrick Growth Fund

In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Kobrick Capital Fund, Kobrick
Emerging Growth Fund and Kobrick Growth Fund (funds of the Nvest Kobrick
Investment Trust, hereafter referred to as the "Trust") at September 30, 2000,
the results of their operations, the changes in their net assets and the
financial highlights for the periods indicated, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 2000 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Boston, Massachusetts
November 9, 2000

26
<PAGE>

Supplement dated October 30, 2000 to the currently effective Prospectus and
Statement of Additional Information of each of the funds listed below

STOCK FUNDS
-----------
Kobrick Capital Fund
Kobrick Emerging Growth Fund
Kobrick Growth Fund
Nvest Balanced Fund
Nvest Bullseye Fund
Nvest Capital Growth Fund
Nvest Equity Income Fund
Nvest Growth and Income Fund
Nvest Growth Fund
Nvest International Equity Fund
Nvest Star Advisers Fund
Nvest Star Small Cap Fund
Nvest Star Value Fund
Nvest Star Worldwide Fund

BOND FUNDS
----------
Nvest Bond Income Fund
Nvest Government Securities Fund
Nvest High Income Fund
Nvest Intermediate Term Tax Free Fund
of California
Nvest Limited Term U.S. Government Fund
Nvest Massachusetts Tax Free Income Fund
Nvest Municipal Income Fund
Nvest Short Term Corporate Income Fund
Nvest Strategic Income Fund

MONEY MARKET FUNDS
------------------
Nvest Cash Management Trust --
Money Market Series
Nvest Tax Exempt Money Market Trust

CDC Asset Management, the investment management arm of France's Caisse des
Depots Group, has completed its acquisition of Nvest, L.P. and Nvest Companies,
L.P. As a result CDC Asset Management owns, directly or indirectly, a
controlling interest in certain Nvest affiliates, namely, Nvest Funds
Management, L.P.; Back Bay Advisors, L.P.; Capital Growth Management Limited
Partnership; Harris Associates L.P.; Jurika & Voyles, L.P.; Kobrick Funds LLC;
Loomis, Sayles & Company, L.P.; Vaughan, Nelson, Scarborough & McCullough, L.P.;
and Westpeak Investment Advisors, L.P. (collectively, the "Nvest Affiliates"),
each of which serves as investment adviser or sub-adviser to one or more of the
above-named funds.

The Nvest-CDC Asset Management transaction involved a change of ownership
of Nvest which may be deemed to have caused a "change of control" of the Nvest
Affiliates, even though the Nvest Affiliates' operations did not change as a
result. As required by the Investment Company Act of 1940, which regulates
investment companies such as your Fund, each Fund's shareholders approved new
investment advisory and/or sub-advisory agreement(s) for the Fund to assure that
there is no interruption in the services the Nvest Affiliates provide to the
Fund. Each new investment advisory and sub-advisory agreement is effective as of
October 30, 2000.

27
<PAGE>

NOTES--

28
<PAGE>

LARGE-CAP EQUITY FUNDS GLOBAL/INTERNATIONAL EQUITY FUNDS
Capital Growth Fund Star Worldwide Fund
Kobrick Growth Fund International Equity Fund
Growth Fund
Growth and Income Fund CORPORATE INCOME FUNDS
Balanced Fund Short Term Corporate Income Fund
Star Value Fund Bond Income Fund
High Income Fund
ALL-CAP EQUITY FUNDS Strategic Income Fund
Star Advisers Fund
Kobrick Capital Fund GOVERNMENT INCOME FUNDS
Bullseye Fund Limited Term U.S. Government Fund
Equity Income Fund Government Securities Fund

SMALL-CAP EQUITY FUNDS MONEY MARKET FUNDS*
Star Small Cap Fund Cash Management Trust -- Money Market Series
Kobrick Emerging Growth Fund Tax Exempt Money Market Trust
* Investments in money market
funds are not insured or
guaranteed by the FDIC or any
government agency.

TAX-FREE INCOME FUNDS
Municipal Income Fund
Intermediate Term Tax Free
Fund of California
Massachusetts Tax Free Income Fund

To learn more, and for a free prospectus, contact your financial representative.

VISIT OUR WEB SITE AT WWW.NVESTFUNDS.COM

Nvest Funds Distributor, L.P.
399 Boylston Street
Boston, MA 02116
Toll Free 800-225-5478

This material is authorized for distribution to prospective investors when it is
preceded or accompanied by the Fund's current prospectus, which contains
information about distribution charges, management and other items of interest.
Investors are advised to read the prospectus carefully before investing.

Nvest Funds Distributor, L.P., is a member of the National Association of
Securities Dealers, Inc. (NASD). As a service to investors, the NASD has asked
that we inform you of the availability of a brochure on
its Public Disclosure Program. The program provides access to information about
securities firms and their representatives. Investors may obtain a copy by
contacting the NASD at 800-289-9999 or by visiting their
Web site at www.NASDR.com.

<PAGE>

[NVEST FUNDS LOGO GOES HERE]

399 Boylston Street
Boston, Massachusetts
02116
To the household of:
KB56-1100

TO THE HOUSEHOLD OF

Bulk Rate
U.S. Postage
Paid
Brockton, MA
Permit No. 770

KB56-1100