New England Funds Trust I
New England Balanced Fund, New England Capital Growth Fund, New England
Growth Fund, New England International Equity Fund, New England Star Advisers
Fund and New England Value Fund
New England Fund Trust II
New England Growth Opportunities Fund
Supplement dated January 5, 1996 to the Prospectuses dated May 1, 1995 of
New England Star Advisers Fund and New England Stock Funds and to the
Prospectus dated May 1, 1995 as Revised August 21, 1995 of New England
Stock Funds, each as previously supplemented by the other Supplements
attached hereto
Effective January 2, 1996, the investment adviser of each Fund (other
than New England Growth Fund) is New England Funds Management, L.P.
("NEFM"). Loomis, Sayles & Company, L.P. ("Loomis Sayles") serves as
subadviser to New England Balanced Fund, New England Capital Growth Fund,
New England Strategic Income Fund and New England Value Fund. Loomis
Sayles will continue to serve as subadviser to New England Star Advisers
Fund and the other three subadvisers of New England Star Advisers Fund also
remain the same. Draycott Partners, Ltd. ("Draycott") serves as subadviser
to New England International Equity Fund and Westpeak Investment Advisors,
L.P. ("Westpeak") serves as subadviser to New England Growth Opportunities
Fund.
The advisory fee rates payable by each Fund to NEFM under the new
advisory arrangements described above are unchanged from the advisory fee
rates previously in effect, except that the fee rates for New England
International Equity Fund is 0.90% of the first $200 million of the Fund's
average net assets, 0.85% of the next $300 million of such assets and 0.80%
of such assets in excess of $500 million.
The New England International Equity Fund is no longer subject to the
administrative services fee referred to in its Prospectus. The "Annual
operating expenses" table relating to New England International Equity Fund
is restated as follows, based on the new fee arrangements, assuming they
had been in effect during the year ended December 31, 1994:
<TABLE>
Expense Type Annual Fund Operating
Expenses
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Advisory Fees 0.80%* 0.80%* 0.80%* 0.80%*
12b-1 Fees 0.25% 1.00% 1.00% None
Administrative
Services Fees None None None None
Other Expenses 0.70% 0.70% 0.60% 0.20%
Total Fund Operating
Expenses 1.75%* 2.50 * 2.50%* 1.00%*
</TABLE>
* After voluntary fee waiver and expense reduction by NEFM and/or the
Distributor. Without the voluntary limitations, Advisory Fees would be
0.90% for all Classes and Total Fund Operating Expenses would be 1.85%
for Class A shares, 2.60% for Class B and Class C shares and 1.10% for
Class Y shares. These voluntary limitations can be terminated by NEFM
or the Distributor at any time.
The following paragraphs are deleted from the section of the Prospectus
captioned "Buying Fund Shares -- Reduced Sales Charges (Class A Shares
Only)":
Shares of the Fund(s) may be purchased at net asset value with no
sales charge or CDSC by advisory accounts through investment advisers
that are registered under the Investment Advisers Act of 1940 and
affiliated with broker-dealers.
There is no sales charge or CDSC on investments by 401(a), 401(k),
457 or 403(b) plans that have total investment assets equal to or in
excess of $5 million.
The two paragraphs above are replaced by the following paragraphs:
Shares of the Fund(s) may be purchased at net asset value by
investment advisers, financial planners or other intermediaries who
place trades for their own accounts or the accounts of their clients
and who charge a management, consulting or other fee for their
services; clients of such investment advisers, financial planners or
other intermediaries who place trades for their own accounts if the
accounts are linked to the master account of such investment adviser,
financial planner or other intermediary on the books and records of
the broker or agent; and retirement and deferred compensation plans
and trusts used to fund those plans, including, but not limited to,
those defined in Section 401(a), 403(b) or 457 of the Internal
Revenue Code and rabbi trusts. Investors may be charged a fee if
they effect transactions through a broker or agent.
Shares of the Fund(s) also may be purchased at net asset value
through certain broker-dealers and/or financial services
organizations without any transaction fee. Such organizations may
receive compensation, in an amount of up to 0.35% annually of the
average value of the Fund shares held by their customers. This
compensation may be paid by NEFM and/or a Fund's subadviser out of
their own assets, or may be paid indirectly by the Fund(s) in the
form of servicing, distribution or transfer agent fees.
The following paragraph is added to the section of the Prospectus
captioned "Fund Details -- Additional Facts About the Fund(s)":
Summit Cash Reserves Fund (the "Cash Fund"), a series of Financial
Institutions Series Trust, is related to the Fund(s) for purposes of
investment and investor services. Shares of all classes of the
Fund(s) may be exchanged for shares of the Cash Fund at net asset
value. If shares of the Fund(s) that are exchanged for shares of the
Cash Fund are subject to a CDSC, the holding period for purposes of
determining the expiration of the CDSC will stop and resume only when
an exchange is made back into shares of the Fund(s). If Fund shares
subject to a CDSC are exchanged for Cash Fund shares and the Cash
Fund shares are later redeemed rather than being exchanged back into
shares of any of the Funds, then a CDSC will apply at the same rate
as if the Fund shares were redeemed at the time of the exchange.
The following item relating to New England International Equity Fund
supplements the Stock Funds Prospectuses:
The following paragraph is added to the section of the Prospectuses
captioned "Fund Management":
On December 29, 1995, NEIC, the parent company of Draycott, sold
Draycott to Cursitor Holdings, Limited ("Cursitor"). Cursitor,
headquartered at 66 Buckingham Gate, London, England SW1E 6AU, is an
international investment management group that had approximately $9.4
billion in assets under management at September 30, 1995. Alliance
Capital Management L.P. ("Alliance Capital") is expected to acquire
the business of Cursitor in 1996. As a result of this transaction,
Draycott will become a wholly-owned subsidiary of a new entity,
Cursitor Alliance LLC, in which Alliance Capital will directly and
indirectly own a 93% interest. Alliance Capital Management
Corporation ("ACMC") is the sole general partner of, and the owner of
a 1% general partnership interest in, Alliance Capital. ACMC is an
indirectly wholly owned subsidiary of The Equitable Life Assurance
Society of the United States, which is a wholly-owned subsidiary of
The Equitable Companies Incorporated, a holding company controlled by
AXA, a French insurance holding company. Effective December 29,
1995, short-term U.S. cash management services for New England
International Equity Fund are provided by Draycott (rather than by
Back Bay Advisors).
The following item supplements the New England Star Advisers Fund
Prospectus and the Stock Funds Prospectuses:
The paragraph which discusses the bonus program for New England Star
Advisers Fund under the section captioned "Fund Management" is deleted
and replaced by the following:
The Distributor in its discretion may, but is not obligated to, pay a
bonus to the subadviser whose segment of the Fund's portfolio has the
highest relative return for the prior year versus that segment's
investment peer group as tracked by a major independent mutual fund
reporting service.
Supplement dated October 26, 1995 to the Prospectuses dated May 1, 1995 of
New England Star Advisers Fund and Supplement dated October 31, 1995 to New
England Stock Funds Prospectuses dated May 1, 1995 and as Revised August 21,
1995
The following paragraphs are added to the section of the Prospectuses
captioned "Buying 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.)
New England Growth Fund
Supplement dated October 31, 1995 to New England Stock Funds Prospectuses
dated May 1, 1995 and as Revised August 21, 1995
The following sentence is added to the section of the Prospectuses
captioned "Buying Fund Shares--Growth Fund Eligibility":
Shares of New England Growth Fund are available for purchase by 401(k)
retirement plans.
New England Star Advisers Fund
Supplement dated July 13, 1995 to New England Star Advisers Fund Prospectus
dated May 1, 1995 and New England Stock Funds Prospectus dated May 1, 1995
The following information reflects changes in the investment management and
policies of the Loomis, Sayles & Company, L.P. ("Loomis Sayles") segment of
New England Star Advisers Fund (the "Fund"):
Jeffrey C. Petherick, Vice President of Loomis Sayles and New England
Funds Trust I, and Mary Champagne, Vice President of Loomis Sayles, have
day-to-day management responsibility for the segment of the Fund that is
allocated to Loomis Sayles. Mr. Petherick has co-managed the Loomis
Sayles segment of the Fund since the Fund's inception. Mr. Petherick
was an investment manager at Masco Corporation prior to joining Loomis
Sayles in 1990. Ms. Champagne has co-managed the Loomis Sayles segment of
the Fund since July 1995. Prior to joining Loomis Sayles in 1993, Ms.
Champagne served as a portfolio manager at NBD Bank for 10 years.
Loomis Sayles manages its segment of the portfolio by investing
primarily in stocks of small cap companies with good earnings growth
potential, that Loomis Sayles believes are undervalued by the market.
Typically such companies range in size from $100 million to $500 million
in market capitalization, have better than average growth rates at below
average price/earnings ratios and have strong balance sheets and cash
flow. Loomis Sayles seeks to build a core small cap portfolio of solid
growth companies' stock, with a smaller emphasis on special situations
and turnarounds (companies that have experienced significant business
problems but which Loomis Sayles believes have favorable prospects for
recovery), as well as unrecognized stocks.
