NEW ENGLAND FUNDS TRUST I
NEW ENGLAND FUNDS TRUST II
Supplement dated November 17, 1995 to New England Bond Funds Class Y
Prospectus
dated May 1, 1995 as Revised October 2, 1995
The following paragraphs are added to the section of the Prospectus
captioned "Fund Management" for New England Government Securities Fund, New
England Limited Term U.S. Government Fund, New England Adjustable Rate U.S.
Government Fund, New England Strategic Income Fund and New England Bond
Income Fund (the "Funds"):
The investment adviser of each Fund and the subadviser of New England
Strategic Income Fund are wholly-owned subsidiaries of New England
Investment Companies, L.P. ("NEIC"). New England Mutual Life Insurance
Company ("The New England") owns NEIC's sole general partner and a
majority of the limited partnership interest in NEIC. The New England
and Metropolitan Life Insurance Company ("MetLife") have entered into an
agreement to merge, with MetLife to be the survivor of the merger. The
merger is conditioned upon, among other things, approval by the
policyholders of The New England and MetLife and receipt of certain
regulatory approvals. The merger is not expected to occur until after
December 31, 1995.
The merger of The New England into MetLife is being treated, for
purposes of the Investment Company Act of 1940 (the "Act"), as an
"assignment" of the existing investment advisory agreements relating to
the Funds and the subadvisory agreement relating to New England
Strategic Income Fund. Under the Act, such an "assignment" will result
in the automatic termination of the investment advisory agreements and
the New England Strategic Income Fund subadvisory agreement, effective
at the time of the merger. Prior to the merger, shareholders of the
Funds will be asked to approve new investment advisory agreements and
subadvisory agreements, intended to take effect at the time of the
merger. A proxy statement describing the new agreements will be sent to
shareholders of the Funds prior to their being asked to vote on the new
agreements.
The following paragraphs are added to the section of the Prospectus
captioned "Ways to Buy Fund Shares" for each of the Funds:
Investment checks should be made payable to New England Funds.
New England Funds will accept second-party checks (up to $10,000) for
investments into existing accounts only. (A second-party check is a
check made payable to a New England Funds shareholder which the
shareholder has endorsed to New England Funds for deposit into an
account registered to the shareholder.)
New England Funds will NOT accept third-party checks, except certain
third-party checks issued by other mutual fund companies, broker dealers
or banks representing the transfer of retirement assets. (A third-party
check is a check made payable to a party which is not a New England
Funds shareholder, but which has been ultimately endorsed to New
England Funds for deposit into an account.)
The following financial information is added to the section of the Prospectus
captioned "Financial Highlights" for New England Strategic Income Fund:
The Financial Highlights presented below are for a Class A, B and C
share of New England Strategic Income Fund outstanding throughout the
indicated period.
May 1, 1995(a) through
September 30, 1995
Class A Class B Class C
Shares Shares Shares
Net asset value, beginning of $12.50 $12.50 $12.50
period
Income from investment operations
Net investment income 0.46 0.42 0.41
Net gains or losses on investments
(both realized and unrealized) 0.04 0.04 0.04
Total income from investment 0.50 0.46 0.45
operations
Less distributions
Distributions (from net investment (0.48) (0.44) (0.43)
income)
Total distributions (0.48) (0.44) (0.43)
Net asset value, end of period $12.52 $12.52 $12.52
Total return (%) 4.08(b) 3.76(b) 3.69(b)
Ratios/Supplemental data
Net assets, end of period (000) $29,417 $28,428 $10,575
Ratio of operating expenses to 1.04(c) 1.79(c) 1.79(c)
average net assets (%) (d)
Ratio of net investment income to 7.87(c) 7.12(c) 7.12(c)
average net assets (%)
Portfolio turnover rate (%) 16(c) 16(c) 16(c)
(a) Commencement of operations.
(b) Not computed on an annualized basis.
(c) Computed on an annualized basis.
(d) The ratio of operating expenses to average net assets (computed on an
annualized basis) without giving effect to the voluntary expense
limitations in effect from May 1, 1995 through September 30, 1995 would
have been 1.69%, 2.44% and 2.44% for Class A, B and C shares, respectively.
