Supplement dated July 3, 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
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 will
retain their investment independence, brand names, management and operating
autonomy. The transaction will not affect daily operations of the Funds or the
investment management activities of the Funds' investment advisers and
sub-advisers.
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") serve as investment
adviser or sub-adviser of the above-named funds.
Consummation of the transaction with CDC is subject to a number of
contingencies, including regulatory approvals and approval of the unitholders of
Nvest, L.P. and Nvest Companies L.P. Under the rules for mutual funds the
transaction may result in a change of control for the Nvest Affiliates and,
therefore, an assignment of the Funds' investment advisory and sub-advisory
agreements with the Nvest Affiliates, which generally is not permitted under the
Investment Company Act of 1940. Consequently, it is anticipated that the Nvest
Affiliates will seek approval of new agreements from the Funds' Board of
Trustees and shareholders prior to consummation of the transaction. The
transaction is expected to close in the fourth quarter of 2000.
SP108-0600R
<PAGE>
NVESTFUNDS
WHERE THE BEST MINDS MEET (R)
KOBRICK FUNDS
STOCK FUNDS
ALL-CAP EQUITY
Kobrick Capital Fund
SMALL-CAP EQUITY
Kobrick Emerging Growth Fund
LARGE-CAP EQUITY
Kobrick Growth Fund
Prospectus
November 1, 1999
(as revised July 3, 2000)
What's Inside
Goals, Strategies & Risks
Page 2
Fund Fees & Expenses
Page 8
Management Team
Page 11
Fund Services
Page 12
Fund Performance
Page 24
The Securities and Exchange Commission has not approved any Fund's shares or
determined whether this Prospectus is accurate or complete. Anyone who tells you
otherwise is committing a crime.
For general information on the Funds or any of their services and for
assistance in opening an account, contact your financial representative or
call Nvest Funds.
Nvest Funds
399 Boylston Street, Boston, Massachusetts 02116
800-225-5478
<PAGE>
TABLE OF CONTENTS
GOALS, STRATEGIES & RISKS
Kobrick Capital Fund 2
Kobrick Emerging Growth Fund 4
Kobrick Growth Fund 6
FUND FEES & EXPENSES
Fund Fees & Expenses 8
MORE ABOUT RISK
More About Risk 10
MANAGEMENT TEAM
Meet the Funds' Investment Adviser 11
Meet the Funds' Portfolio Managers 11
FUND SERVICES
Investing in the Funds 12
How Sales Charges are Calculated 13
Ways to Reduce or Eliminate Sales Charges 14
It's Easy to Open an Account 15
Buying Shares 16
Selling Shares 17
Selling Shares in Writing 18
Exchanging Shares 19
Restrictions on Buying, Selling and Exchanging Shares 19
How Fund Shares are Priced 20
Dividends and Distributions 21
Tax Consequences 21
Compensation to Securities Dealers 22
Additional Investor Services 23
FUND PERFORMANCE
Fund Performance 24
GLOSSARY OF TERMS
Glossary of Terms 25
If you have any questions about any of the terms used in this Prospectus, please
refer to the "Glossary of Terms."
To learn more about the possible risks of investing in a Fund, please refer to
the section entitled "More About Risk." This section details the risks of
practices in which the Funds may engage. Please read this section carefully
before you invest.
Fund shares are not bank deposits and are not guaranteed, endorsed or insured by
the Federal Deposit Insurance Corporation or any other government agency, and
are subject to investment risks, including possible loss of the principal
invested.
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK CAPITAL FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Frederick R. Kobrick
CATEGORY: All-Cap Equity
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. | |
--------------------------------
LOW X | X |
TICKER SYMBOL: CLASS A CLASS B CLASS C
-------------------------------
KFCFX KCFBX KCFCX
INVESTMENT GOAL
The Capital Fund seeks maximum capital appreciation by investing primarily in
equity securities of companies with small, medium and large capitalizations.
INVESTMENT STRATEGIES
Under normal market conditions, the Capital Fund will invest substantially all
of its assets in equity securities of companies with small, medium and large
capitalizations, including those that the Adviser believes are undervalued
special situations and emerging growth companies. This approach provides the
Adviser with flexibility to emphasize in the Fund companies with different
capitalizations as market conditions change. The Adviser considers emerging
growth companies to be those companies that are less mature and have the
potential to grow substantially faster than the economy. The Adviser's bottom-up
approach utilizes fundamental and qualitative analysis to select individual
companies, not sectors, with the greatest potential for growth. In selecting
investments for the Fund, the Adviser generally seeks companies in a wide range
of industries and considers a variety of factors, including any one or more of
the following:
* the strength of a company's management team
* relative financial condition
* entrepreneurial character
* expected growth in earnings
* competitive position and business strategy
* new or innovative products, services or processes
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that has the potential to meet its buy disciplines described
below. Many of the companies within this group are special situation
companies which, because of unique circumstances, such as an ability to
fill a particular niche, are attractive investments.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Capital Fund's assets will be
invested in equity securities, the Fund may invest at any time up to 35% of its
total assets in other types of securities (including corporate bonds and
securities of the U.S. government). The Fund may invest more than 35% of its
total assets in cash or certain short-term securities for temporary defensive
purposes. The Fund will only take such defensive action, which is inconsistent
with its investment goal, when, in the opinion of the Adviser, such a position
is more likely to provide protection against adverse market conditions than
adherence to the Fund's other investment policies. Because the Fund's investment
goal provides flexibility to emphasize companies having different
capitalizations as market conditions change, the Fund may engage in frequent
trading of securities. This may produce higher transaction costs and a higher
level of capital gains, which may lower your return. Since the beginning of the
Fund's fiscal year on October 1, 1999, more frequent trading of securities
occurred due to significant market volatility and other factors which produced a
higher-than-normal portfolio turnover rate for the Fund.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES:
Because the Capital Fund invests primarily in equity securities, its major risks
are those commonly associated with investing in stocks. This means that you may
lose money on your investment due to unpredictable drops in a stock's value or
periods of below-average performance in a given stock or in the stock market as
a whole. Growth stocks are generally more sensitive to market movements than
other types of stocks, primarily because their stock prices are based heavily on
future expectations. Small capitalization and emerging growth companies may be
subject to more abrupt price movements, limited markets and less liquidity than
larger, more established companies, which could adversely affect the value of
the portfolio. With special situation companies, the primary risk is that they
may not achieve their expected value because events do not materialize as the
Adviser anticipated. Because the Fund invests in, among other things,
undervalued special situations, emerging growth companies and companies with
small capitalizations, an investment in the Fund involves greater than average
risks. Accordingly, the value of the Fund's shares may fluctuate more widely
than the value of shares of a fund that invests in larger, more established
companies.
2
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
EVALUATING THE FUND'S PAST PERFORMANCE
The bar chart and table shown below give an indication of the risks of investing
in Kobrick Capital Fund. The Fund's past performance does not necessarily
indicate how the Fund will perform in the future.
The bar chart shows the Fund's adjusted total returns for Class A shares for the
two calendar years since the Fund's inception on December 31, 1997. The returns
for the other classes of shares offered by this Prospectus differ from the Class
A returns shown in the bar chart, depending upon the respective expenses of each
class. The chart does not reflect any sales charge that you may be required to
pay when you buy or redeem the Fund's shares. A sales charge will reduce your
return.
[BAR CHART APPEARS HERE]
TOTAL RETURN
------------
1998 50.00%
1999 73.21%
o Highest Quarterly Return: Fourth Quarter 1999, up 51.07%
o Lowest Quarterly Return: Third Quarter 1998, down 13.86%
The table below shows how the Fund's average annual total returns for the
one-year and since Fund inception periods compared to those of the Russell 3000
Index, a market value-weighted, unmanaged index of large company stocks. They
are also compared to the Morningstar Mid Cap Growth Fund Average and Lipper
Multi-Cap Growth Fund Average, each an average of the total returns of all
mutual funds with a current investment style similar to that of the Capital
Fund, as calculated by Morningstar, Inc. and Lipper, Inc., respectively. It is
not possible to invest directly in an index. The Fund's total returns are
adjusted to reflect the Fund's expenses for Class A, B, and C shares and the
maximum sales charge that you may pay when you buy or redeem the Fund's shares.
The Russell 3000 Index returns have not been adjusted for ongoing management,
distribution and operating expenses and sales charges applicable to mutual fund
investments. The Morningstar Mid Cap Growth Fund Average and Lipper Multi-Cap
Growth Fund Average returns have been adjusted for these expenses but do not
reflect any sales charges.
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDED DECEMBER 31, 1999)
<S>
SINCE FUND INCEPTION
PAST 1 YEAR (12/31/97)
--------------------------------------------------------------------------------------------------------
<C> <C> <C>
Kobrick Capital Fund: Class A* (inception 12/31/97) 63.20% 56.49%
Russell 3000 Index 20.90% 22.51%
Morningstar Mid Cap Growth Fund Average 59.70% 36.47%
Lipper Multi-Cap Growth Fund Average 52.34% 40.04%
--------------------------------------------------------------------------------------------------------
Kobrick Capital Fund: Class B* (inception 10/29/99) 67.46% 56.44%
Russell 3000 Index 20.90% 22.51%
Morningstar Mid Cap Growth Fund Average 59.70% 36.47%
Lipper Multi-Cap Growth Fund Average 52.34% 40.04%
--------------------------------------------------------------------------------------------------------
Kobrick Capital Fund: Class C* (inception 10/29/99) 71.46% 60.44%
Russell 3000 Index 20.90% 22.51%
Morningstar Mid Cap Growth Fund Average 59.70% 36.47%
Lipper Multi-Cap Growth Fund Average 52.34% 40.04%
</TABLE>
* Until November 1, 1999, the Fund had only one class of shares and was
offered without a sales charge. These returns have been adjusted to reflect
the expenses and sales loads of the Fund's new multiple class structure.
See "Fund Fees & Expenses."
3
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK EMERGING GROWTH FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Frederick R. Kobrick
CATEGORY: Small-Cap Equity
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. | |
--------------------------------
LOW X | X |
TICKER SYMBOL: CLASS A CLASS B CLASS C
--------------------------------
KFEGX KEGBX pending
INVESTMENT GOAL
The Emerging Growth Fund seeks to provide growth of capital by investing
primarily in equity securities of emerging growth companies, with an emphasis on
companies with small capitalizations.
INVESTMENT STRATEGIES
Under normal market conditions, the Emerging Growth Fund will invest
substantially all of its assets in equity securities of emerging growth
companies in any industry, with emphasis on companies with small
capitalizations. The Adviser considers emerging growth companies to be those
companies which are less mature and have the potential to grow substantially
faster than the economy. The small capitalization companies in which the Fund
invests are generally comparable to the size of companies included in the
Russell 2000 Index, which is a commonly used index of small stock performance.
The median market capitalization in this index as of September 30, 1999 was
approximately $421 million and the largest market capitalization in this index
as of such date was approximately $3 billion. Levels of capitalization and the
companies constituting the Russell 2000 Index could vary over time because of
market conditions and other factors relating to small capitalization companies
generally and investments in such companies. While a company's market
capitalization may be small at the time the Fund first invests in the company,
the Fund may continue to hold and acquire shares of the company after its market
capitalization increases. Small and emerging growth companies that are
identified as good candidates for the Fund can be found in a variety of
industries. In selecting investments for the Fund, the Adviser may consider a
variety of factors, including any one or more of the following:
* the strength of a company's management team
* relative financial condition
* competitive position and business strategy
* new or innovative products, services or processes
* expected growth in earnings
* cash flow
* overall potential as an enterprise
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that has the potential to meet its buy disciplines described
below. Many of the companies within this group are special situation
companies which, because of unique circumstances, such as an ability to
fill a particular niche, are attractive investments.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Emerging Growth Fund's assets will
be invested in equity securities of emerging growth companies, the Fund may
invest at any time up to 35% of its total assets in other types of securities
(including corporate bonds and securities of the U.S. government) and in
securities issued by larger, more mature companies and undervalued special
situation companies. The Fund may invest more than 35% of its total assets in
cash or certain short-term securities for temporary defensive purposes. The Fund
will only take such defensive action, which is inconsistent with its investment
goal, when, in the opinion of the Adviser, such a position is more likely to
provide protection against adverse market conditions than adherence to the
Fund's other investment policies. The Fund may engage in frequent trading of
securities, which may produce higher transaction costs and a higher level of
capital gains. This may lower your return. Since the beginning of the Fund's
fiscal year on October 1, 1999, more frequent trading of securities occurred due
to significant market volatility and other factors which produced a
higher-than-normal portfolio turnover rate for the Fund.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES:
Because the Emerging Growth Fund invests primarily in equity securities, its
major risks are those commonly associated with investing in stocks. This means
that you may lose money on your investment due to unpredictable drops in a
stock's value or periods of below-average performance in a given stock or in the
stock market as a whole. Growth stocks are generally more sensitive to market
movements than other types of stocks, primarily because their stock prices are
based heavily on future expectations. Small capitalization and emerging growth
companies may be subject to more abrupt price movements, limited markets and
less liquidity than larger, more established companies, which could adversely
affect the value of the portfolio. With special situation companies, the primary
risk is that they may not achieve their expected value because events do not
materialize as the Adviser anticipated. Because the Fund invests in, among other
things, undervalued special situations, emerging growth companies and companies
with small capitalizations, an investment in the Fund involves greater than
average risks. Accordingly, the value of the Fund's shares may fluctuate more
widely than the value of shares of a fund that invests in larger, more
established companies.
4
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
EVALUATING THE FUND'S PAST PERFORMANCE
The bar chart and table shown below give an indication of the risks of investing
in Kobrick Emerging Growth Fund. The Fund's past performance does not
necessarily indicate how the Fund will perform in the future.
The bar chart shows the Fund's adjusted total returns for Class A shares for the
two calendar years since the Fund's inception on December 31, 1997. The returns
for the other classes of shares offered by this Prospectus differ from the Class
A returns shown in the bar chart, depending upon the respective expenses of each
class. The chart does not reflect any sales charge that you may be required to
pay when you buy or redeem the Fund's shares. A sales charge will reduce your
return.
[BAR CHART APPEARS HERE]
TOTAL RETURN
------------
1998 39.50%
1999 86.49%
* Highest Quarterly Return: Fourth Quarter 1999, up 57.28%
* Lowest Quarterly Return: Third Quarter 1998, down 19.27%
The table below shows how the Fund's average annual total returns for the
one-year and since Fund inception periods compared to those of the Russell 2000
Index, a market value-weighted, unmanaged index of small company stocks. It is
also compared to the Morningstar Small Cap Growth Fund Average and Lipper
Small-Cap Growth Fund Average, each an average of the total returns of all
mutual funds with a current investment style similar to that of the Emerging
Growth Fund, as calculated by Morningstar Inc. and Lipper, Inc., respectively.
It is not possible to invest directly in an index. The Fund's total returns are
adjusted to reflect the Fund's expenses for Class A, B, and C shares and the
maximum sales charge that you may pay when you buy or redeem the Fund's shares.
The Russell 2000 Index returns have not been adjusted for ongoing management,
distribution and operating expenses and sales charges applicable to mutual fund
investments. The Morningstar Small Cap Growth Fund Average and Lipper Small-Cap
Growth Fund Average returns have been adjusted for these expenses but do not
reflect any sales charges.
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDED DECEMBER 31, 1999)
<S>
SINCE FUND INCEPTION
PAST 1 YEAR (12/31/97)
------------------------------------------------------------------------------------------------------------
<C> <C> <C>
Kobrick Emerging Growth Fund: Class A* (inception 12/31/97) 75.78% 56.59%
Russell 2000 Index 21.26% 8.70%
Morningstar Small Cap Growth Fund Average 61.76% 31.41%
Lipper Small-Cap Growth Fund Average 62.63% 30.10%
------------------------------------------------------------------------------------------------------------
Kobrick Emerging Growth Fund: Class B* (inception 10/29/99) 80.74% 56.54%
Russell 2000 Index 21.26% 8.70%
Morningstar Small Cap Growth Fund Average 61.76% 31.41%
Lipper Small-Cap Growth Fund Average 62.63% 30.10%
------------------------------------------------------------------------------------------------------------
Kobrick Emerging Growth Fund: Class C* (inception 10/29/99) 84.74% 60.54%
Russell 2000 Index 21.26% 8.70%
Morningstar Small Cap Growth Fund Average 61.76% 31.41%
Lipper Small-Cap Growth Fund Average 62.63% 30.10%
</TABLE>
* Until November 1, 1999, the Fund had only one class of shares and was
offered without a sales charge. These returns have been adjusted to reflect
the expenses and sales loads of the Fund's new multiple class structure.
See "Fund Fees & Expenses."
5
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK GROWTH FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Michael E. Nance
CATEGORY: Large-Cap Equity
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. X | |
--------------------------------
LOW | X |
TICKER SYMBOL: CLASS A CLASS B CLASS C
--------------------------------
KFGRX KFGBX pending
INVESTMENT GOAL
The Growth Fund seeks long-term growth of capital by investing primarily in
equity securities of companies with large capitalizations that the Adviser
believes have better than average long-term growth potential.
INVESTMENT STRATEGIES
Under normal market conditions, the Growth Fund will be primarily invested in
equity securities of large capitalization companies that the Adviser expects
will have better than average long-term growth potential. The Adviser's
bottom-up approach utilizes fundamental and qualitative analysis to select
individual companies, not sectors, with the greatest potential for growth. The
Fund invests in a diversified portfolio of securities of larger, more
established companies in a broad range of industries. The Adviser seeks to
invest in companies which offer the greatest potential for profitable expansion
and sustained growth and considers a variety of factors, including any one or
more of the following:
* management that can execute business plans
* expected growth in earnings
* a sound business strategy
* compelling valuations
A company's valuations are based on a variety of measures including
price/earnings to growth rates, price to book value and price to sales.
Potential income is not a major factor in the selection of investments.
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that has the potential to meet its buy disciplines described
below.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Growth Fund's assets will be
invested in equity securities of companies with large capitalizations, the Fund
may invest at any time up to 35% of its total assets in other types of
securities (including corporate bonds and securities of the U.S. government) and
in smaller capitalization and emerging growth companies. The Fund may invest
more than 35% of its total assets in cash or certain short-term securities for
temporary defensive purposes. The Fund will only take such defensive action,
which is inconsistent with its investment goal, when, in the opinion of the
Adviser, such a position is more likely to provide protection against adverse
market conditions than adherence to the Fund's other investment policies. The
Fund may engage in frequent trading of securities, which may produce higher
transaction costs and a higher level of capital gains. This may lower your
return. Since the beginning of the Fund's fiscal year on October 1, 1999, more
frequent trading of securities occurred due to significant market volatility and
other factors which produced a higher-than-normal portfolio turnover rate for
the Fund.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES:
Because the Growth Fund invests primarily in equity securities, its major risks
are those commonly associated with investing in stocks. This means that you may
lose money on your investment due to sudden, unpredictable drops in a stock's
value or periods of below-average performance in a given stock or in the stock
market as a whole. Growth stocks are generally more sensitive to market
movements than other types of stocks, primarily because their stock prices are
based heavily on future expectations. Because of these and other risks, the Fund
may underperform certain other stock funds during periods when large company
growth stocks are generally out of favor.
6
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
EVALUATING THE FUND'S PAST PERFORMANCE
The bar chart and table shown below give an indication of the risks of investing
in Kobrick Growth Fund. The Fund's past performance does not necessarily
indicate how the Fund will perform in the future.
The bar chart shows the Fund's adjusted total return for Class A shares for the
one calendar year since the Fund's inception on September 1, 1998. The returns
for the other classes of shares offered by this Prospectus differ from the Class
A returns shown in the bar chart, depending upon the respective expenses of each
class. The chart does not reflect any sales charge that you may be required to
pay when you buy or redeem the Fund's shares. A sales charge will reduce your
return.
[BAR CHART APPEARS HERE]
TOTAL RETURN
------------
1999 54.58%
o Highest Quarterly Return: Fourth Quarter 1999, up 38.03%
o Lowest Quarterly Return: Third Quarter 1999, down 0.32%
The table below shows how the Fund's average annual total returns for the
one-year and since Fund inception periods compared to those of the S&P Composite
Index of 500 stocks ("S&P 500"), a market value-weighted, unmanaged index of
common stock prices for 500 selected stocks. It is also compared to the
Morningstar Large Cap Growth Fund Average and Lipper Large-Cap Growth Fund
Average, each an average of the total returns of all mutual funds with a current
investment style similar to that of the Growth Fund, as calculated by
Morningstar, Inc. and Lipper, Inc., respectively. It is not possible to invest
directly in an index. The Fund's total returns are adjusted to reflect the
Fund's expenses for Class A, B and C shares and the maximum sales charge that
you may pay when you buy or redeem the Fund's shares. The S&P 500 returns have
not been adjusted for ongoing management, distribution and operating expenses
and sales charges applicable to mutual fund investments. The Morningstar Large
Cap Growth Fund Average and Lipper Large-Cap Growth Fund Average returns have
been adjusted for these expenses but do not reflect any sales charges.
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1999)
<S>
SINCE FUND INCEPTION
PAST 1 YEAR (9/1/98)
----------------------------------------------------------------------------------------------------
<C> <C> <C>
Kobrick Growth Fund: Class A* (inception 9/1/98) 45.68% 68.44%
S&P 500 21.04% 39.83%
Morningstar Large Cap Growth Fund Average 37.72% 59.35%
Lipper Large-Cap Growth Fund Average 38.09% 60.15%**
----------------------------------------------------------------------------------------------------
Kobrick Growth Fund: Class B* (inception 10/29/99) 48.83% 71.33%
S&P 500 21.04% 39.83%
Morningstar Large Cap Growth Fund Average 37.72% 59.35%
Lipper Large-Cap Growth Fund Average 38.09% 60.15%**
----------------------------------------------------------------------------------------------------
Kobrick Growth Fund: Class C* (inception 10/29/99) 52.83% 75.33%
S&P 500 21.04% 39.83%
Morningstar Large Cap Growth Fund Average 37.72% 59.35%
Lipper Large-Cap Growth Fund Average 38.09% 60.15%**
</TABLE>
* Until November 1, 1999, the Fund had only one class of shares and was
offered without a sales charge. These returns have been adjusted to
reflect expenses and sales loads of the Fund's new multiple class
structure. See "Fund Fees & Expenses."
** Calculated from August 31, 1998.
7
<PAGE>
FUND FEES & EXPENSES
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of each Fund.
SHAREHOLDER FEES
(fees paid directly from your investment)
Class A Class B Class C
--------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases (as a
percentage of offering
price)(1)(2) 5.75% None None
---------------------------------------------------------------------------
Maximum deferred sales
charge (load) (as a
percentage of original
purchase price or
redemption proceeds, as
applicable)(2) (3) 5.00% 1.00%
---------------------------------------------------------------------------
Redemption fees None* None* None*
(1) A reduced sales charge on Class A shares applies in some cases. See "Ways
to Reduce or Eliminate Sales Charges."
(2) Does not apply to reinvested distributions.
(3) A 1.00% contingent deferred sales charge applies with respect to certain
purchases of Class A shares greater than $1,000,000 redeemed within 1 year
after purchase, but not to any other purchases or redemptions of Class A
shares. See "How Sales Charges are Calculated."
* Generally, a transaction fee will be charged for expedited payment of
redemption proceeds such as by wire or overnight delivery.
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets, as a percentage of average daily net assets)
<S>
KOBRICK KOBRICK KOBRICK
CAPITAL FUND EMERGING GROWTH FUND GROWTH FUND
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Distribution and/or service (12b-1) fees 0.25% 1.00%* 1.00%* 0.25 1.00%* 1.00%* 0.25% 1.00%* 1.00%*
Other expenses 0.52% 0.52% 0.52% 0.83% 0.83% 0.83% 0.88% 0.88% 0.88%
Total annual fund operating expenses (a) 1.77% 2.52% 2.52% 2.08% 2.83% 2.83% 2.13% 2.88% 2.88%
Fee waiver and/or expense reimbursement (b) -0.27% -0.27% -0.27% -0.58% -0.58% -0.58% -0.73% -0.73% -0.73%
NET EXPENSES 1.50% 2.25% 2.25% 1.50% 2.25% 2.25% 1.40% 2.15% 2.15%
</TABLE>
* Because of the higher 12b-1 fees, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
rules of the National Association of Securities Dealers, Inc.
(a) Until November 1, 1999, the Funds had only one class of shares and were
offered without a sales charge and therefore total expenses have been
restated to account for fees and expenses under the Funds' new multiple
class structure.
(b) The Adviser has agreed to cap the amount of Total Expenses at 1.50%, 2.25%
and 2.25% for the Class A, B and C shares, respectively of the Kobrick
Capital Fund and Kobrick Emerging Growth Fund and 1.40%, 2.15% and 2.15%
for the Class A, B and C shares, respectively of the Kobrick Growth Fund.
Accordingly, to the extent Total Expenses exceed the amount of the
respective cap, the Adviser will reduce its management fees and/or
reimburse the Funds for certain expenses. With respect to each Fund, the
Adviser 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 deferred fees more than one year after the end of the fiscal year in
which the fee was deferred. If the Adviser had not agreed to the cap and if
the reimbursements and waivers were not in effect for a Fund, performance
would be reduced accordingly.
8
<PAGE>
FUND FEES & EXPENSES (CONTINUED)
EXAMPLE
This example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.
The example assumes that:
o You invest $10,000 in a Fund for the time periods indicated;
o Your investment has a 5% return each year; and
o A Fund's operating expenses remain the same.
Although your actual costs and returns may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
KOBRICK CAPITAL FUND KOBRICK EMERGING GROWTH FUND KOBRICK GROWTH FUND
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
(1) (2) (1) (2) (1) (2) (1) (2) (1) (2) (1) (2)
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $ 719 $ 728 $ 228 $ 328 $ 228 $ 719 $ 728 $ 228 $ 328 $ 228 $ 709 $ 718 $ 218 $ 318 $ 218
3 years $1,022 $1,003 $ 703 $ 703 $ 703 $1,022 $1,003 $ 703 $ 703 $ 703 $ 993 $ 973 $ 673 $ 673 $ 673
5 years $1,346 $1,405 $1,205 $1,205 $1,205 $1,346 $1,405 $1,205 $1,205 $1,205 $1,297 $1,354 $1,154 $1,154 $1,154
10 years* $2,263 $2,514 $2,396 $2,585 $2,585 $2,263 $2,514 $2,396 $2,585 $2,585 $2,158 $2,410 $2,292 $2,483 $2,483
</TABLE>
(1) Assumes redemption at end of period
(2) Assumes no redemption at end of period
* Class B shares automatically convert to Class A shares after 8 years;
therefore, Class B amounts are calculated using Class A expenses in years 9
and 10.
9
<PAGE>
MORE ABOUT RISK
The Funds have principal investment strategies that come with inherent risks.
The following is a list of risks to which each Fund may be subject by investing
in various types of securities or engaging in various practices.
MARKET RISK (All Funds) The risk that the market value of a security may move up
and down, sometimes rapidly and unpredictably based upon change in a company's
financial condition as well as overall market and economic conditions.
RISK OF SMALL CAPITALIZATION COMPANIES (Capital and Emerging Growth Funds) These
companies carry special risks, including narrower markets, limited financial and
management resources, less liquidity and greater volatility than large company
stocks.
MANAGEMENT RISK (All Funds) The risk that a strategy used by a Fund's portfolio
management may fail to produce the intended result.
CREDIT RISK (All Funds) The risk that the issuer of a security, or the
counterparty to a contract, will default or otherwise become unable to honor a
financial obligation.
INTEREST RATE RISK (All Funds) The risk of market losses attributable to changes
in interest rates. In general, the prices of fixed-income securities rise when
interest rates fall, and fall when interest rates rise.
INFORMATION RISK (All Funds) The risk that key information about a security is
inaccurate or unavailable.
OPPORTUNITY RISK (All Funds) The risk of missing out on an investment
opportunity because the assets necessary to take advantage of it are invested in
less profitable investments.
LIQUIDITY RISK (All Funds) The risk that certain securities may be difficult or
impossible to sell at the time and at the price that the seller would like.
This may result in a loss or may be costly to a Fund.
VALUATION RISK (All Funds) The risk that a Fund has valued certain securities at
a higher price than it can sell them for.
POLITICAL RISK (All Funds) The risk of losses directly attributable to
government or political actions.
10
<PAGE>
MANAGEMENT TEAM
---------------
MEET THE FUNDS' INVESTMENT ADVISER
The Kobrick Funds family consists of three mutual funds designed to offer
investors a range of growth oriented investment opportunities. Kobrick Funds are
distributed through Nvest Funds Distributor, L.P. (the "Distributor"). This
Prospectus covers Class A, Class B, and Class C shares of Kobrick Capital Fund,
Kobrick Emerging Growth Fund and Kobrick Growth Fund, all of which constitute
the "Kobrick Funds." As a shareholder of one or more of the Kobrick Funds, you
are entitled to the same benefits and privileges as a shareholder of the Nvest
Funds, including the ability to exchange into or out of any fund in the Nvest
Funds family (see "Exchanging Shares"). The Nvest Funds family, which includes
the Kobrick Funds, includes 25 mutual funds with a total of over $8 billion in
assets under management as of December 31, 1999. Nvest Stock Funds, Nvest Bond
Funds, Nvest Star Funds and Nvest State Tax-Free Funds, constitute the "Nvest
Funds." Nvest Cash Management Trust Money Market Series and Nvest Tax Exempt
Money Market Trust constitute the "Money Market Funds."
ADVISER
The Adviser, KOBRICK FUNDS LLC, located at 101 Federal Street, Boston,
Massachusetts 02110, serves as the investment adviser to each of the Funds and
is a subsidiary of Nvest Companies, L.P. ("Nvest Companies"). The Adviser, the
predecessor to which was formed in 1997, focuses primarily on managing
growth-oriented equity funds including each of the Funds. Nvest Companies is
part of an affiliated group including Nvest, L.P., a publicly-traded company
listed on the New York Stock Exchange. Nvest Companies' 14 principal subsidiary
or affiliated asset management firms, collectively, had $127 billion in assets
under management as of September 30, 1999.
In 1998, the Funds paid 1.00% of their respective average daily net assets to
the Adviser in advisory fees.
PORTFOLIO TRADES
In placing portfolio trades, the Adviser may use brokerage firms that market the
Funds' shares or are affiliated with Nvest Companies or the Adviser. In placing
trades, the Adviser will seek to obtain the best combination of price and
execution, which involves a number of judgmental factors. Such portfolio trades
are subject to applicable regulatory restrictions and related procedures adopted
by the Funds' Board of Trustees.
MEET THE FUNDS' PORTFOLIO MANAGERS
FREDERICK R. KOBRICK
Frederick Kobrick has managed Kobrick Capital Fund from its inception and
Kobrick Emerging Growth Fund from its inception until February 1, 1999 and
returned as its portfolio manager on April 9, 1999. Mr. Kobrick previously
managed the Kobrick Growth Fund from its inception until June 30, 1999. He has
been in the investment business for more than 28 years. For the 12 year period
immediately prior to becoming President of the predecessor to Kobrick Funds LLC
in 1997, he was an equity portfolio manager at State Street Research &
Management Company, where he served as Senior Vice President since 1989 and as a
member of the firm's Equity Investment Committee since 1985. He received an
M.B.A. from Harvard Business School and a B.A. from Boston University. Mr.
Kobrick is also a Chartered Financial Analyst. In addition to serving as senior
officer of the Adviser, Mr. Kobrick is also a portfolio manager and a principal
in private investment partnerships and may act in that capacity with respect to
other similar investment partnerships.
MICHAEL E. NANCE
Michael Nance has managed Kobrick Growth Fund since July 1, 1999. Mr. Nance,
Senior Vice President of the Adviser, joined the company in June 1999. Prior to
joining the Adviser, he was a Senior Vice President at Putnam Investments, where
he was a co-manager of the Putnam Voyager Fund, as well as other institutional
accounts. Mr. Nance joined Putnam in 1994 as an Assistant Vice President and
equity analyst in the Global Equity Research Group. Mr. Nance received an M.B.A.
from the University of Chicago Graduate School of Business and a B.S. in
Industrial Engineering from Drexel University. In addition to serving as Senior
Vice President of the Adviser, Mr. Nance is also a portfolio manager in private
investment partnerships and may act in that capacity with respect to other
similar investment partnerships.
11
<PAGE>
FUND SERVICES
-------------
INVESTING IN THE FUNDS
CHOOSING A SHARE CLASS
Each Fund offers Class A, Class B and Class C shares to the public. Each class
has different costs associated with buying, selling and holding Fund shares,
which allows you to choose the class that best meets your needs. Which class you
choose will depend upon the size of your investment and how long you intend to
hold your shares. Class B shares, Class C shares and certain shareholder
features may not be available to you if you hold your shares in a street name
account. Your financial representative can help you decide which class of shares
is most appropriate for you.
CLASS A SHARES
o You pay a sales charge when you buy Fund shares. There are several ways to
reduce this charge. See the section entitled "Ways to Reduce or Eliminate
Sales Charges."
o You pay lower annual expenses than Class B and Class C shares, giving you
the potential for higher returns per share.
o You do not pay a sales charge on orders of $1 million or more, but you may
pay a charge on redemption if you redeem these shares within 1 year of
purchase.
CLASS B SHARES
o You do not pay a sales charge when you buy Fund shares. All of your money
goes to work for you right away.
o You pay higher annual expenses than Class A shares.
o You will pay a charge on redemptions if you sell your shares within 6 years
of purchase, as described in the section "How Sales Charges are
Calculated."
o Your Class B shares will automatically convert into Class A shares after 8
years, which reduces your annual expenses.
o We will not accept an order for $1 million or more of Class B shares. You
may, however, purchase $1 million or more of Class A shares, which will
have no sales charge as well as lower annual expenses. You may pay a charge
on redemption if you redeem these shares within 1 year of purchase.
CLASS C SHARES
o You do not pay a sales charge when you buy Fund shares. All of your money
goes to work for you right away.
o You pay higher annual expenses than Class A shares.
o You will pay a charge on redemptions if you sell your shares within 1 year
of purchase.
o Your Class C shares will not automatically convert into Class A shares. If
you hold your shares for longer than 8 years, you'll pay higher expenses
than other classes.
o We will not accept an order for $1 million or more of Class C shares. You
may, however, purchase $1 million or more of Class A shares, which will
have no sales charge as well as lower annual expenses. You may pay a charge
on redemption if you redeem these shares within 1 year of purchase.
For expenses associated with Class A, B and C shares, see the section entitled
"Fund Fees & Expenses" in this Prospectus.
CERTIFICATES
Certificates will not be automatically issued for any class of shares. Upon
written request, you may receive certificates for Class A shares only.
12
<PAGE>
FUND SERVICES
-------------
HOW SALES CHARGES ARE CALCULATED
CLASS A SHARES
The price that you pay when you buy Class A shares ("offering price") is their
net asset value plus a sales charge (sometimes called a "front-end sales
charge") which varies depending upon the size of your purchase.
CLASS A SALES CHARGES
YOUR INVESTMENT AS A % OF OFFERING PRICE AS A % OF YOUR INVESTMENT
--------------------------------------------------------------------------------
Less than $ 50,000 5.75% 6.10%
$ 50,000 - $ 99,999 4.50% 4.71%
$100,000 - $249,999 3.50% 3.63%
$250,000 - $499,999 2.50% 2.56%
$500,000 - $999,999 2.00% 2.04%
$1,000,000 or more* 0.00% 0.00%
* For purchases of Class A shares of the Funds of $1 million or more or
purchases by Retirement Plans (Plans under Sections 401(a) or 401(k) of the
Internal Revenue Code with investments of $1 million or more or that have
100 or more eligible employees), there is no front-end sales charge, but a
contingent deferred sales charge of 1.00% may apply to redemptions of your
shares within one year of the date of purchase. See the section entitled
"Ways to Reduce or Eliminate Sales Charges."
CLASS B SHARES
The offering price of Class B shares is their net asset value, without a
front-end sales charge. However, there is a contingent deferred sales charge
("CDSC") on shares that you sell within 6 years of buying them. The amount of
the CDSC, if any, declines each year that you own your shares. The holding
period for purposes of timing the conversion to Class A shares and determining
the CDSC will continue to run after an exchange to Class B shares of another
Kobrick Fund or Nvest Fund. The CDSC equals the following percentages of the
dollar amounts subject to the charge:
CLASS B CONTINGENT DEFERRED SALES CHARGES
YEAR SINCE PURCHASE CDSC ON SHARES BEING SOLD
----------------------------------------------------------------
1st 5.00%
2nd 4.00%
3rd 3.00%
4th 3.00%
5th 2.00%
6th 1.00%
Thereafter 0.00%
CLASS C SHARES
The offering price of Class C shares is their net asset value, without a
front-end sales charge. However, Class C shares are subject to a CDSC of 1.00%
on redemptions made within one year of the date of purchase. The holding period
for determining the CDSC will continue to run after an exchange to Class C
shares of another Kobrick Fund or Nvest Fund.
CLASS C CONTINGENT DEFERRED SALES CHARGES
YEAR SINCE PURCHASE CDSC ON SHARES BEING SOLD
----------------------------------------------------------------
1st 1.00%
Thereafter 0.00%
HOW THE CDSC IS APPLIED TO YOUR SHARES
The CDSC is a sales charge you pay when you redeem certain Fund shares.
The CDSC:
o is calculated based on the number of shares you are selling;
o is based on either your original purchase price or the current net asset
value of the shares being sold, whichever is lower;
o is deducted from the proceeds of the redemption, not from the amount
remaining in your account; and
o for year one applies to redemptions through the day one year after the date
on which your purchase was accepted, and so on for subsequent years.
A CDSC WILL NOT BE CHARGED ON:
o increases in net asset value above the purchase price; or
o shares you acquired by reinvesting your dividends or capital gains
distributions.
To keep your CDSC as low as possible, each time that you place a request to sell
shares we will first sell any shares in your account that carry no CDSC. If
there are not enough of these shares available to meet your request, we will
sell the shares with the lowest CDSC.
EXCHANGES INTO SHARES OF ANY
NVEST MONEY MARKET FUND
If you exchange shares of a Fund into shares of the Nvest Money Market Funds,
the holding period for purposes of determining the CDSC and conversion to Class
A shares stops until you exchange back into shares of another Kobrick Fund or
Nvest Fund. If you choose to redeem those Nvest Money Market Fund shares, a CDSC
may apply.
13
<PAGE>
FUND SERVICES
-------------
WAYS TO REDUCE OR ELIMINATE SALES CHARGES
CLASS A SHARES
REDUCING SALES CHARGES
There are several ways you can lower your sales charge, including:
o LETTER OF INTENT -- allows you to purchase Class A shares of any Kobrick
Fund or Nvest Fund over a 13-month period but pay sales charges as if you
had purchased all shares at once. This program can save you money if you
plan to invest $50,000 or more over 13 months. Purchases in Class B and
Class C shares may be used toward meeting the letter of intent.
o COMBINING ACCOUNTS -- allows you to combine shares of multiple Kobrick
Funds and other Nvest Funds and classes for purposes of calculating your
sales charge. You may combine your purchases with those of qualified
accounts of a spouse, parents, children, siblings, grandparents,
grandchildren, in-laws, individual fiduciary accounts, sole
proprietorships, single trust estates and any other group of individuals
acceptable to the Distributor.
These privileges do not apply to the Nvest Money Market Funds unless shares are
purchased through an exchange from another Kobrick Fund or Nvest Fund.
ELIMINATING SALES CHARGES AND CDSC
Class A shares may be offered without front-end sales charges or a CDSC to the
following individuals and institutions:
o Any government entity that is prohibited from paying a sales charge or
commission to purchase mutual fund shares;
o Selling brokers, sales representatives or other intermediaries;
o Fund Trustees and other individuals who are affiliated with any Kobrick
Fund, Nvest Fund or Money Market Fund (this also applies to any spouse,
parents, children, siblings, grandparents, grandchildren and in-laws of
those mentioned);
o Participants in certain Retirement Plans with at least 100 members
(one-year CDSC may apply);
o Non-discretionary and non-retirement accounts of bank trust departments or
trust companies only if they principally engage in banking or trust
activities;
o Investments of $25,000 or more in Kobrick Funds, Nvest Funds or Money
Market Funds by clients of an adviser or subadviser to any Kobrick Fund,
Nvest Fund or Money Market Fund; and
o Accounts open as of October 31, 1999 that became Class A shareholders of
the relevant Fund, are not subject to applicable sales charges and may
exchange into Class A shares of another Kobrick Fund or Nvest Fund without
the imposition of a sales charge.
REPURCHASING FUND SHARES
You may apply proceeds from redeeming Class A shares of the Funds WITHOUT PAYING
A SALES CHARGE to repurchase Class A shares of any Kobrick Fund or Nvest Fund.
To qualify, you must reinvest some or all of the proceeds within 120 days after
your redemption and notify Nvest Funds or your financial representative at the
time of reinvestment that you are taking advantage of this privilege. You may
reinvest your proceeds either by returning the redemption check or by sending a
new check for some or all of the redemption amount. Please note: For federal
income tax purposes, A REDEMPTION IS A SALE THAT INVOLVES TAX CONSEQUENCES, EVEN
IF THE PROCEEDS ARE LATER REINVESTED. Please consult your tax adviser for how a
redemption would affect you.
If you repurchase Class A shares of $1 million or more within 30 days after you
redeem such shares, the Distributor will rebate the amount of the CDSC charged
on the redemption.
CLASS A, B OR C SHARES
ELIMINATING THE CDSC
As long as we are notified at the time you sell, the CDSC for any share class
will generally be eliminated in the following cases:
o to make distributions from a retirement plan (a plan termination or total
plan redemption may incur a CDSC);
o to make payments through a systematic withdrawal plan; or
o due to shareholder death or disability.
If you think you may be eligible for a sales charge elimination or
reduction, contact your financial representative or Nvest Funds.
14
<PAGE>
FUND SERVICES
-------------
IT'S EASY TO OPEN AN ACCOUNT
TO OPEN AN ACCOUNT WITH NVEST FUNDS:
1. Read this Prospectus carefully.
2. Determine how much you wish to invest. The following chart shows the
investment minimums for various types of accounts:
<TABLE>
<S>
MINIMUM TO OPEN AN
MINIMUM TO ACCOUNT USING MINIMUM FOR
TYPE OF ACCOUNT OPEN AN ACCOUNT INVESTMENT BUILDER EXISTING ACCOUNTS
-------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
Any account other than those listed below $2,500 $100 $100
Accounts registered under the Uniform Gifts
to Minors Act or the Uniform Transfers to
Minors Act $2,500 $100 $100
Individual Retirement Accounts (IRAs) $500 $100 $100
Retirement plans with tax benefits such as
corporate pension, profit sharing and Keogh
plans $250 $100 $100
Payroll Deduction Investment Programs for
SARSEP, SEP, SIMPLE, 403(b)(7)
and certain other retirement plans $25 N/A N/A
</TABLE>
3. Complete the appropriate parts of the account application, carefully
following the instructions. If you have any questions, please call your
financial representative or Nvest Funds at 800-225-5478. For more
information on Nvest Funds' investment programs, refer to the section
entitled "Additional Investor Services" in this Prospectus.
4. Use the following sections as your guide for purchasing shares.
SELF-SERVICING YOUR ACCOUNT
Buying or selling shares is easy with the services described below:
NVEST FUNDS PERSONAL ACCESS LINE(R)
800-225-5478, PRESS 1
NVEST FUNDS WEB SITE
WWW.NVESTFUNDS.COM
You have access to your account 24 hours a day by calling Personal Access
Line(R) from a touch-tone telephone or by visiting us online. By using these
customer service options, you may:
o purchase, exchange or redeem shares in your existing accounts (certain
restrictions may apply);
o review your account balance, recent transactions, Fund prices and recent
performance;
o order duplicate account statements; and
o obtain tax information.
Please see the following pages for other ways to buy, exchange or sell your
shares.
15
<PAGE>
FUND SERVICES
-------------
BUYING SHARES
OPENING AN ACCOUNT
------------------
THROUGH YOUR INVESTMENT DEALER
o Call your investment dealer for information.
BY MAIL
o Make out a check in U.S. dollars for the investment amount, payable to
"Nvest Funds." Third party checks will generally not be accepted.
o Mail the check with your completed application to Nvest Funds, P.O. Box
8551, Boston, MA 02266-8551.
BY EXCHANGE
o The exchange must be for a minimum of $1,000 or for all of your shares.
o Obtain a current prospectus for the Fund into which you are exchanging by
calling your investment dealer or Nvest Funds at 800-225-5478.
o Call your investment dealer or Nvest Funds to request an exchange.
o See the section entitled "Exchanging Shares."
BY WIRE
o Call Nvest Funds at 800-225-5478 to obtain an account number and wire
transfer instructions. Your bank may charge you for such a transfer.
AUTOMATIC INVESTING THROUGH INVESTMENT BUILDER
o Indicate on your application that you would like to begin an automatic
investment plan through Investment Builder and the amount of the monthly
investment ($100 minimum).
o Send a check marked "Void" or a deposit slip from your bank account along
with your application.
THROUGH AUTOMATED CLEARING HOUSE ("ACH")
o Ask your bank or credit union whether it is a member of the ACH system.
o Complete the "Telephone Withdrawal and Exchange" and "Bank Information"
sections on your account application.
o Mail your completed application to Nvest Funds, P.O. Box 8551, Boston, MA
02266-8551.
ADDING TO AN ACCOUNT
--------------------
THROUGH YOUR INVESTMENT DEALER
o Call your investment dealer for information.
BY MAIL
o Make out a check in U.S. dollars for the investment amount, payable to
"Nvest Funds." Third party checks will generally not be accepted.
o Fill out the detachable investment slip from an account statement. If no
slip is available, include with the check a letter specifying the Fund
name, your class of shares, your account number and the registered account
name(s). To make investing even easier, you can order more investment slips
by calling 800-225-5478.
BY EXCHANGE
o The exchange must be for a minimum of $1,000 or for all of your shares.
o Call your investment dealer or Nvest Funds at 800-225-5478 to request an
exchange.
o See the section entitled "Exchanging Shares."
BY WIRE
o Instruct your bank to transfer funds to State Street Bank & Trust Company,
ABA# 011000028, DDA# 99011538.
o Specify the Fund name, your class of shares, your account number and the
registered account name(s). Your bank may charge you for such a transfer.
AUTOMATIC INVESTING THROUGH INVESTMENT BUILDER
o Please call Nvest Funds at 800-225-5478 for a Service Options Form. A
signature guarantee may be required to add this privilege.
o See the section entitled "Additional Investor Services."
THROUGH AUTOMATED CLEARING HOUSE ("ACH")
o Call Nvest Funds at 800-225-5478 to add shares to your account through
ACH.
o If you have not signed up for the ACH system, please call Nvest Funds for a
Service Options Form. A signature guarantee may be required to add this
privilege.
16
<PAGE>
FUND SERVICES
-------------
SELLING SHARES
TO SELL SOME OR ALL OF YOUR SHARES
Certain restrictions may apply. See section entitled "Restrictions on Buying,
Selling and Exchanging Shares."
THROUGH YOUR INVESTMENT DEALER
o Call your investment dealer for information.
BY MAIL
o Write a letter to request a redemption specifying the name of the Fund, the
class of shares, your account number, the exact registered account name(s),
the number of shares or the dollar amount to be redeemed and the method by
which you wish to receive your proceeds. Additional materials may be
required. See the section entitled "Selling Shares in Writing."
o The request must be signed by all of the owners of the shares including the
capacity in which they are signing, if appropriate.
o Mail your request to Nvest Funds, P.O. Box 8551, Boston, MA 02266-8551.
o Your proceeds (less any applicable CDSC) will be delivered by the method
chosen in your letter. If you choose to have your proceeds delivered by
mail, they will generally be mailed to you on the business day after the
request is received. You may also choose to redeem by wire or through ACH
(see below).
BY EXCHANGE
o Obtain a current prospectus for the Fund into which you are exchanging by
calling your investment dealer or Nvest Funds at 800-225-5478.
o Call Nvest Funds to request an exchange.
o See the section entitled "Exchanging Shares" for more details.
By Wire
o Fill out the "Telephone Withdrawal and Exchange" and "Bank Information"
sections on your account application.
o Call Nvest Funds at 800-225-5478 or indicate in your redemption request
letter (see above) that you wish to have your proceeds wired to your bank.
o Proceeds (less any applicable CDSC) will generally be wired on the next
business day. A wire fee (currently $5.00) will be deducted from the
proceeds.
THROUGH AUTOMATED CLEARING HOUSE ("ACH")
o Ask your bank or credit union whether it is a member of the ACH system.
o Complete the "Telephone Withdrawal and Exchange" and "Bank Information"
sections on your account application.
o If you have not signed up for the ACH system on your application, please
call Nvest Funds at 800-225-5478 for a Service Options Form.
o Call Nvest Funds to request a redemption through this system.
o Proceeds (less any applicable CDSC) will generally arrive at your bank
within three business days.
BY SYSTEMATIC WITHDRAWAL PLAN
o Please refer to the section entitled "Additional Investor Services" or call
Nvest Funds at 800-225-5478 or your financial representative for
information.
o Because withdrawal payments may have tax consequences, you should consult
your tax adviser before establishing such a plan.
BY TELEPHONE
o You may receive your proceeds by mail, by wire or through ACH (see above).
o Call Nvest Funds at 800-225-5478 to choose the method you wish to use to
redeem your shares.
17
<PAGE>
FUND SERVICES
--------------
SELLING SHARES IN WRITING
If you wish to redeem your shares in writing, all owners of the shares must sign
the redemption request in the exact names in which the shares are registered and
indicate any special capacity in which they are signing. In certain situations,
you will be required to make your request to sell shares in writing. In these
instances, a letter of instruction signed by the authorized owner is necessary.
In certain situations we also may require a signature guarantee or additional
documentation.
A signature guarantee protects you against fraudulent orders and is necessary
if:
o your address of record has been changed within the past 30 days;
o you are selling more than $100,000 worth of shares and you are requesting
the proceeds by check; or
o a proceeds check for any amount is mailed to an address other than the
address of record or not payable to the registered owner(s).
A notary public cannot provide a signature guarantee. A signature guarantee can
be obtained from one of the following sources:
o a financial representative or securities dealer;
o a federal savings bank, cooperative or other type of bank;
o a savings and loan or other thrift institution;
o a credit union; or
o a securities exchange or clearing agency.
<TABLE>
<S>
SELLER (ACCOUNT TYPE) REQUIREMENTS FOR WRITTEN REQUESTS
--------------------------------------------------------------------------------------------------------------------------------
<C> <C>
INDIVIDUAL, JOINT, SOLE PROPRIETORSHIP, UGMA/UTMA (MINOR ACCOUNTS)
o The signatures on the letter must include all persons
authorized to sign, including title, if applicable.
o Signature guarantee, if applicable (see above).
CORPORATE OR ASSOCIATION ACCOUNTS
o The signatures on the letter must include all persons
authorized to sign, including title.
OWNERS OR TRUSTEES OF TRUST ACCOUNTS
o The signature on the letter must include all trustees
authorized to sign, including title.
o If the names of the trustees are not registered on the
account, please provide a copy of the trust document
certified within the past 60 days.
o Signature guarantee, if applicable (see above).
JOINT TENANCY WHOSE CO-TENANTS ARE DECEASED
o The signatures on the letter must include all surviving
tenants of the account.
o Copy of the death certificate.
o Signature guarantee if proceeds check is issued to
other than the surviving tenants.
POWER OF ATTORNEY (POA)
o The signatures on the letter must include the
attorney-in-fact, indicating such title.
o A signature guarantee.
o Certified copy of the POA document stating it is still
in full force and effect, specifying the exact Fund and
account number, and certified within 30 days of receipt
of instructions. *
QUALIFIED RETIREMENT BENEFIT PLANS
(EXCEPT - NVEST FUNDS PROTOTYPE DOCUMENTS)
o The signature on the letter must include all signatures
of those authorized to sign, including title.
o Signature guarantee, if applicable (see above).
EXECUTORS OF ESTATES, ADMINISTRATORS, GUARDIANS, CONSERVATORS
o The signature on the letter must include those
authorized to sign, including capacity.
o A signature guarantee.
o Certified copy of court document where signer derives
authority, e.g.: Letters of Administration,
Conservatorship, Letters Testamentary.*
INDIVIDUAL RETIREMENT ACCOUNTS (IRAs)
o Additional documentation and distribution forms are
required.
</TABLE>
* Certification may be made on court documents by the court, usually certified
by the clerk of the court. POA certification may be made by a commercial bank,
broker/member of a domestic stock exchange or a practicing attorney.
18
<PAGE>
FUND SERVICES
-------------
EXCHANGING SHARES
In general, you may exchange shares of your Fund for shares of the same class of
another Kobrick Fund or other Nvest Fund without paying a sales charge or a CDSC
(see the sections entitled "Buying Shares" and "Selling Shares"). The exchange
must be for a minimum of $1,000 (or the total net asset value of your account,
whichever is less), or $100 if made under the Automatic Exchange Plan (see the
section entitled "Additional Investor Services"). All exchanges are subject to
the eligibility requirements of the Kobrick Fund, Nvest Fund or Money Market
Fund into which you are exchanging. The exchange privilege may be exercised only
in those states where shares of the Kobrick Funds, Nvest Funds or Money Market
Funds may be legally sold. For federal income tax purposes, an exchange of Fund
shares for shares of another Kobrick Fund, Nvest Fund or Money Market Fund is
generally treated as a sale on which gain or loss may be recognized. Please
refer to the Statement of Additional Information (the "SAI") for more detailed
information on exchanging Fund shares.
RESTRICTIONS ON BUYING, SELLING AND EXCHANGING SHARES
PURCHASE AND EXCHANGE RESTRICTIONS
Although the Funds do not anticipate doing so, they reserve the right to suspend
or change the terms of purchasing or exchanging shares. Each Fund and the
Distributor reserve the right to refuse or limit any purchase or exchange order
by a particular purchaser (or group of related purchasers) if the transaction is
deemed harmful to the best interest of the Fund's other shareholders or would
disrupt the management of the Fund. The Funds and the Distributor reserve the
right to restrict purchases and exchanges for the accounts of "market timers" by
limiting the transaction to a maximum dollar amount. An account will be deemed
to be one of a market timer if: (i) more than two exchange purchases of a given
Fund are made for the account in a calendar quarter or (ii) the account makes
one or more exchange purchases of a given Fund in a calendar quarter in an
aggregate amount in excess of 1% of the Fund's total net assets.
SELLING RESTRICTIONS
The table below describes restrictions placed on selling shares of any Fund
described in this Prospectus:
<TABLE>
<S>
RESTRICTION SITUATION
------------------------------------------------------------------------------------------------------------------------------------
<C> <C>
The Fund may suspend the right of redemption or postpone
payment for more than 7 days:
o When the New York Stock Exchange is closed (other than
a weekend/holiday)
o During an emergency
o Any other period permitted by the SEC
The Fund reserves the right to suspend account services or
refuse transaction requests:
o With a notice of a dispute between registered owners
o With suspicion/evidence of a fraudulent act
The Fund may pay the redemption price in whole or part by a
distribution in kind of readily marketable securities in
lieu of cash or may take up to 7 days to pay a redemption
request in order to raise capital:
o When it is detrimental for the Fund to make cash
payments as determined in the sole discretion of the
adviser
The Fund may close your account and send you the proceeds.
You will have 60 days after being notified of the Fund's
intention to close your account to increase the account to
the set minimum. This does not apply to certain qualified
retirement plans, automatic investment plans or accounts
that have fallen below the minimum solely because of
fluctuations in the Fund's net asset value per share:
o When the Fund account falls below a set minimum
(currently $1,000 as set by the Fund's Board of
Trustees)
The Fund may withhold redemption proceeds until the check or
funds have cleared:
o When redemptions are made within 10 calendar days of
purchase by check or ACH of the shares being redeemed
</TABLE>
Telephone redemptions are not accepted for tax-qualified retirement accounts.
If you hold certificates representing your shares, they must be sent with your
request for it to be honored. The Fund recommends that certificates be sent by
registered mail.
19
<PAGE>
FUND SERVICES
-------------
HOW FUND SHARES ARE PRICED
"Net asset value" is the price of one share of a Fund without a sales charge,
and is calculated each business day using this formula:
TOTAL MARKET VALUE OF SECURITIES + CASH
AND OTHER ASSETS - LIABILITIES
NET ASSET VALUE = ------------------------------------------------
NUMBER OF OUTSTANDING SHARES
The net asset value of Fund shares is determined according to this schedule:
o A share's net asset value is determined at the close of regular trading on
the New York Stock Exchange (the "Exchange") on the days the Exchange is
open for trading. This is normally 4:00 p.m. Eastern time.
o The price you pay for purchasing, redeeming or exchanging a share will be
based upon the net asset value next calculated after your order is received
"in good order" by State Street Bank and Trust Company, the Fund's
custodian (plus or minus applicable sales charges as described earlier in
this Prospectus).
o Requests received by the Distributor after the Exchange closes will be
processed based upon the net asset value determined at the close of regular
trading on the next day that the Exchange is open, with the exception that
those orders received by your investment dealer before the close of the
Exchange and received by the Distributor before 5:00 p.m. Eastern time* on
the same day will be based on the net asset value determined on that day.
o A Fund heavily invested in foreign securities may have net asset value
changes on days when you cannot buy or sell its shares.
*Under limited circumstances, the Distributor may enter into a contractual
agreement where it may accept orders after 5:00 p.m., but not later than 8:00
p.m.
Generally, during times of substantial economic or market change, it may be
difficult to place your order by phone. During these times, you may deliver your
order in person to the Distributor or send your order by mail as described in
"Buying Shares" and "Selling Shares."
Generally, Fund securities are valued as follows:
o EQUITY SECURITIES -- most recent sales or quoted bid price as provided by a
pricing service.
o DEBT SECURITIES (OTHER THAN SHORT-TERM OBLIGATIONS) -- based upon pricing
service valuations.
o SHORT-TERM OBLIGATIONS (REMAINING MATURITY OF LESS THAN 60 DAYS)--
amortized cost (which approximates market value).
o SECURITIES TRADED ON FOREIGN EXCHANGES -- most recent sale/bid price on the
non-U.S. exchange, unless an occurrence after the close of the exchange
will materially affect its value. In that case, it is given fair value as
determined by or under the direction of the Funds' Board of Trustees at the
close of regular trading on the Exchange.
o OPTIONS -- last sale price, or if not available, last offering price.
o FUTURES -- unrealized gain or loss on the contract using current settlement
price. When a settlement price is not used, futures contracts will be
valued at their fair value as determined by or under the direction of the
Funds' Board of Trustees.
o ALL OTHER SECURITIES -- fair market value as determined by the Adviser
under the direction of the Funds' Board of Trustees.
The effect of fair value pricing as described above for "Securities traded
on foreign exchanges" and "All other securities" is that securities may not be
priced on the basis of quotations from the primary market in which they are
traded but rather, may be priced by another method that the Funds' Board of
Trustees believes actually reflects fair value.
20
<PAGE>
FUND SERVICES
-------------
DIVIDENDS AND DISTRIBUTIONS
The Funds generally distribute most or all of their net investment income
annually (other than capital gains) in the form of dividends. Each Fund
distributes all net realized long- and short-term capital gains annually, after
applying any available capital loss carryovers. The Funds' Board of Trustees may
adopt a different schedule as long as payments are made at least annually.
Depending on your investment goals and priorities, you may choose to:
o participate in the Dividend Diversification Program, which allows you to
have all dividends and distributions automatically invested at net asset
value in shares of the same class of another Kobrick Fund or other Nvest
Fund registered in your name. Certain investment minimums and restrictions
may apply. For more information about this program, see the section
entitled "Additional Investor Services."
o receive distributions from dividends and interest in cash while reinvesting
distributions from capital gains in additional shares of the same class of
the Fund or in the same class of another Kobrick Fund or Nvest Fund.
o receive all distributions in cash.
Unless you select one of the options set forth above, distributions will
automatically be reinvested in shares of the same class of the Fund at net asset
value.
For more information or to change your distribution option, contact Nvest Funds
in writing or call 800-225-5478.
If you earn more than $10 annually in taxable income from a non-retirement plan
Fund, you will receive a Form 1099 to help you report the prior calendar year's
distributions on your federal income tax return. Be sure to keep the Form 1099
as a permanent record. A fee may be charged for any duplicate information
requested.
TAX CONSEQUENCES
Each Fund intends to meet all requirements of the Internal Revenue Code
necessary to qualify as a "regulated investment company" and thus does not
expect to pay any federal income tax on income and capital gains distributed to
shareholders.
Fund distributions paid to you either in cash or reinvested in additional shares
are generally taxable to you either as ordinary income or as capital gains.
Distributions derived from short-term capital gains or investment income are
generally taxable at ordinary income rates. If you are a corporation investing
in a Fund, a portion of these dividends may qualify for the dividends-received
deduction provided that you meet certain holding period requirements.
Distributions of gains from investments that a Fund owned for more than one year
that are designated by a Fund as capital gain dividends will generally be
taxable to a shareholder receiving such distributions as long-term capital gain,
regardless of how long the shareholder has held Fund shares.
An exchange of shares for shares of another Kobrick Fund, or other Nvest Fund or
Money Market Fund is generally treated as a sale, and any resulting gain or loss
may be subject to federal income tax. If you purchase shares of a Fund shortly
before it declares a capital gain distribution or a dividend, a portion of the
purchase price may be returned to you as a taxable distribution.
You should consult your tax adviser about any federal, state and local taxes
that may apply to the distributions you receive.
As of the date of this Prospectus, a single investor owns a significant portion
of the shares of each Fund. Redemption by this investor of all or a substantial
part of its investment in a Fund could require the Adviser to sell a large
amount of portfolio securities. Such sales could result in the realization of
capital gains, which would be required to be distributed to shareholders of the
affected Fund.
21
<PAGE>
FUND SERVICES
-------------
COMPENSATION TO SECURITIES DEALERS
As part of their business strategies, the Funds pay securities dealers that sell
their shares. This compensation originates from two sources: sales charges
(front-end or deferred) and 12b-1 fees (comprising the annual service and/or
distribution fees of a plan adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940). The sales charges are detailed in the section entitled
"How Sales Charges are Calculated." Each class of Fund shares pays an annual
service fee of 0.25% of its average daily net assets. In addition to this
service fee, Class B shares pay an annual distribution fee of 0.75% of their
average daily net assets for 8 years (at which time they automatically convert
into Class A shares). Class C shares are subject to a distribution fee of 0.75%
of their average daily net assets. Generally, the 12b-1 fees are paid to
securities dealers on a quarterly basis. The Distributor retains the first year
of such fees for Class C shares. Because these distribution fees are paid out of
the Fund's assets on an ongoing basis, over time these fees for Class B and
Class C shares will increase the cost of your investment and may cost you more
than paying the front-end sales charge on Class A shares.
The Distributor may, at its expense, pay concessions in addition to the payments
described above to dealers which satisfy certain criteria established from time
to time by the Distributor relating to increasing net sales of shares of the
Kobrick Funds or other Nvest Funds over prior periods, and certain other
factors. See the SAI for more details.
22
<PAGE>
FUND SERVICES
-------------
ADDITIONAL INVESTOR SERVICES
RETIREMENT PLANS
Nvest Funds offers a range of retirement plans, including IRAs, SEPs, SARSEPs,
SIMPLEs, 403(b) plans and other pension and profit sharing plans. Refer to the
section entitled "It's Easy to Open an Account" for investment minimums. For
more information about our Retirement Plans, call us at 800-225-5478.
INVESTMENT BUILDER PROGRAM
This is Nvest Funds' automatic investment plan. You may authorize automatic
monthly transfers of $100 or more from your bank checking or savings account to
purchase shares of one or more Kobrick Funds or Nvest Funds. To join the
Investment Builder Program, please refer to the section entitled "Buying
Shares."
DIVIDEND DIVERSIFICATION PROGRAM
This program allows you to have all dividends and any other distributions
automatically invested in shares of the same class of another Kobrick Fund,
Nvest Fund or Money Market Fund, subject to the eligibility requirements of that
other Fund and to state securities law requirements. Shares will be purchased at
the selected Fund's net asset value without a front-end sales charge or CDSC on
the dividend record date. Before establishing a Dividend Diversification Program
into any other Kobrick Fund, Nvest Fund or Money Market Fund, please read its
prospectus carefully.
AUTOMATIC EXCHANGE PLAN
Nvest Funds has an automatic exchange plan under which shares of a class of a
Fund are automatically exchanged each month for shares of the same class of
other Kobrick Funds or Nvest Funds or Money Market Funds. There is no fee for
exchanges made under this plan, but there may be a sales charge in certain
circumstances. Please refer to the SAI for more information on the Automatic
Exchange Plan.
SYSTEMATIC WITHDRAWAL PLAN
This plan allows you to redeem shares and receive payments from your Fund on a
regular schedule. Redemption of shares that are part of the Systematic
Withdrawal Plan are not subject to a CDSC. However, the amount or percentage
that you specify in the plan may not exceed, on an annualized basis, 10% of the
value of your Fund account based upon the value of your Fund account on the day
you establish your plan. To establish a Systematic Withdrawal Plan, please refer
to the section entitled "Selling Shares."
NVEST FUNDS PERSONAL ACCESS LINE(R)
This automated customer service system allows you to have access to your account
24 hours a day by calling 800-225-5478, press 1. With a touch-tone telephone,
you can obtain information about your current account balance, recent
transactions, Fund prices and recent performance. You may also use Personal
Access Line(R) to purchase, exchange or redeem shares in any of your existing
accounts. Certain restrictions may apply.
NVEST FUNDS WEB SITE
Visit us at www.nvestfunds.com to review your account balance and recent
transactions, to view daily prices and performance information or to order
duplicate account statements and tax information. You may also go online to
purchase, exchange or redeem shares in any of your existing accounts. Certain
restrictions may apply.
ELECTRONIC MAIL DELIVERY
This delivery option allows you to receive important fund documents via the
Internet instead of in paper form through regular U.S. mail. Eligible documents
include confirmation statements, quarterly statements, prospectuses, annual and
semiannual reports and proxies. Electronic Delivery will cut down on the amount
of paper you will receive; speed up the availability of your documents; and
lower expenses to your fund. To establish this option on your account(s),
complete the appropriate section of your new account application or visit us at
www.nvestfunds.com.
23
<PAGE>
FUND PERFORMANCE
----------------
The financial highlights table is intended to help you understand each Fund's
financial performance since the Fund's commencement of operations. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the return that an investor would have earned on
an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with each Fund's financial
statements, are included in the Statement of Additional Information, which is
available upon request.
KOBRICK FUNDS
<TABLE>
<S>
KOBRICK CAPITAL FUND KOBRICK EMERGING GROWTH FUND KOBRICK GROWTH FUND
CLASS A CLASS A CLASS A
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
DECEMBER 31, DECEMBER 31, SEPTEMBER 1,
YEAR ENDED 1997* THROUGH YEAR ENDED 1997* THROUGH YEAR ENDED 1997* THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998 1999 1998
<C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period........ $ 10.71 $ 10.00 $ 10.14 $ 10.00 $ 10.32 $ 10.00
Income (Loss) from investment operations:
Net investment income (loss) (c)........ (0.18) (0.13) (0.18) (0.11) (0.08) 0.00
Net realized and unrealized gain
(loss) on investments 6.68 0.84 6.58 0.25(d) 5.17(d) 0.32
Total from investment operations........... 6.50 0.71 6.40 0.14 5.09 0.32
Net asset value, end of period............. $ 17.21 $ 10.71 $ 16.54 $ 10.14 $ 15.41 $ 10.32
Total Return (a) 60.69% 7.10% 63.12% 1.40% 49.35% 3.20%
Ratios and Supplemental Data
Net Assets, end of period (000s)........... $102,879 $27,463 $52,175 $ 18,330 $46,827 $ 1,054
Ratios to average net assets:
Net expenses (b) 1.75% 1.75% 1.75% 1.75% 1.40% 1.40%
Expenses before fee waiver (b) 1.77% 2.21% 2.08% 2.24% 2.13% 11.11%
Net investment income (loss)(b) (1.09)% (1.38)% (1.24)% (1.16)% (0.55)% 0.32%
Portfolio turnover rate 778% 350% 442% 287% 632% 11%
</TABLE>
* Commencement of Operations
(a) Total Returns are historical and assume changes in share price and
reinvestments of dividends. Had certain expenses not been reduced during
the periods shown, total returns would have been lower. Periods of less
than one year are not annualized.
(b) Annualized for periods less than one year.
(c) Computed using the average shares method.
(d) 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.
24
<PAGE>
GLOSSARY OF TERMS
BID PRICE -- The price a prospective buyer is ready to pay. This term is used by
traders who maintain firm bid and offer prices in a given security by standing
ready to buy or sell security units at publicly quoted prices.
BOTTOM-UP APPROACH -- The search for outstanding performance by first
considering individual companies before considering the impact of industry and
economic trends.
CAPITAL GAIN DISTRIBUTIONS -- Payments to a Fund's shareholders of profits
earned from selling securities in a Fund's portfolio. Capital gain distributions
are usually paid once a year.
DERIVATIVE -- A financial instrument whose value and performance are based on
the value and performance of another security or financial instrument.
DIVERSIFICATION -- The strategy of investing in a wide range of companies or
industries to reduce the risk if an individual company or sector of the market
suffers losses.
EARNINGS GROWTH -- A pattern of increasing rate of growth in earnings per share
from one period to another, which usually causes a stock's price to rise.
FUNDAMENTAL ANALYSIS -- An analysis of the balance sheet and income statements
of a company in order to forecast its future stock price movements. Fundamental
analysis considers records of assets, earnings, sales, products, research and
development and markets in predicting future trends in these indicators of a
company's success or failure.
GROWTH INVESTING -- An investment style that emphasizes companies with strong
earnings growth. Growth investing is generally considered more aggressive than
"value" investing.
INCOME DISTRIBUTIONS -- Payments to a Fund's shareholders resulting from the net
interest or dividend income earned by a Fund's portfolio.
MARKET CAPITALIZATION -- Market price multiplied by number of shares
outstanding. The figures used to distinguish small, medium and large market
capitalizations may vary depending upon the index being used and/or the
guidelines set by the portfolio manager.
NET ASSET VALUE (NAV) -- The market value of one share of the Fund on any given
day without a front-end sales charge or CDSC. It is determined by dividing the
Fund's total net assets by the number of shares outstanding.
QUALITATIVE ANALYSIS -- An analysis of the qualities possessed by a company,
including its management, products and competitive positions, to help determine
if the company can execute its strategy.
TARGET PRICE -- Price that an investor is hoping a stock he or she has just
bought will rise to within a specified period of time. An investor may buy XYZ
at $20, with a target price of $40 in one year's time, for instance.
TOTAL RETURN -- The change in value of an investment in the Fund over a specific
time period expressed as a percentage. Total returns assume all earnings are
reinvested in additional shares of the Fund.
VOLATILITY -- The general variability of a portfolio's value resulting from
price fluctuations of its investments. In most cases, the more diversified a
portfolio is, the less volatile it will be.
25
<PAGE>
<PAGE>
KOBRICK FUNDS
-------------
KOBRICK CAPITAL FUND
KOBRICK EMERGING GROWTH FUND
KOBRICK GROWTH FUND
IF YOU WOULD LIKE MORE INFORMATION ABOUT THE KOBRICK FUNDS, THE FOLLOWING
DOCUMENTS ARE AVAILABLE FREE UPON REQUEST:
ANNUAL AND SEMIANNUAL REPORTS -- Provide additional information about each
Fund's investments. Each report includes a discussion of the market conditions
and investment strategies that significantly affected the Fund's performance
during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI) -- Provides more detailed information
about the Funds and their investment limitations and policies, has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference.
To order a free copy of the Fund's annual or semiannual report or its SAI,
contact your financial representative, or the Funds at:
Nvest Funds Distributor, L.P.
399 Boylston Street
Boston, Massachusetts 02116
Telephone: 800-225-5478
Internet: www.nvestfunds.com
Your financial representative or Nvest Funds will also be happy to answer your
questions or to provide any additional information that you may require.
You can review the Funds' reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. Text-only copies are available free from
the Commission's Web site at: www.sec.gov.
Copies of these publications are also available for a fee by writing or
calling the Public Reference Room of the SEC, Washington, D.C.
20549-6009 Telephone: 800-SEC-0330
Nvest Funds Distributor, L.P., and other firms selling shares of Kobrick Funds
and Nvest Funds are members 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.
Investment Company Act File No. 811-8435
XK51-0600
