<PAGE>
NEW ENGLAND HIGH INCOME FUND
Supplement dated July 15, 1996 to Prospectus dated May 1, 1996
On June 28, 1996, the shareholders of New England High Income Fund (the "Fund")
approved a new Sub-Advisory Agreement relating to the Fund between New England
Funds Management, L.P. ("NEFM"), the Fund's adviser, and Loomis, Sayles &
Company, L.P. ("Loomis Sayles"), which became effective on July 1, 1996.
Accordingly, Loomis Sayles became the Fund's subadviser on that date, succeeding
Back Bay Advisors, L.P., and is responsible for day-to-day management of the
Fund's investment operations under the oversight of NEFM.
In connection with the new sub-advisory arrangements, the management fees
payable by the Fund were reduced from the current annual rate of 0.75% of the
Fund's average daily net assets to the new annual rate of 0.70% of the first
$200 million of the Fund's average daily net assets and 0.65% of any such assets
in excess of $200 million. The sub-advisory fees payable by NEFM to Loomis
Sayles under the new arrangements are at the annual rate of 0.35% of the first
$200 million of the Fund's average daily net assets and 0.30% of any such assets
in excess of $200 million. Also, in connection with the adoption of the new
sub-advisory arrangements, the Rule 12b-1 fees payable by the Fund's Class A
shares were reduced from 0.35% to 0.25% annually of the average daily net assets
of the Class A shares. Furthermore, NEFM has agreed, until further notice to the
Fund, to voluntarily reduce its management fees and, when necessary, bear
certain expenses in order to limit the Fund's expenses to an annual rate of
1.40% of the average daily net assets of the Fund's Class A shares and 2.15% of
the average daily net assets of the Fund's Class B shares. Accordingly, in the
Schedule of Fees section, beginning on page 1 of the prospectus, the information
pertaining to the Fund is replaced with the following:
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
NEW ENGLAND HIGH INCOME FUND*****
---------------------------------
Class A Class B
------- -------
<S> <C> <C>
Management Fees (after voluntary fee waiver and expense reduction) . . . . . . . 0.53%*** 0.53%***
12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25% 1.00%*
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.62% 0.62%
Total Fund Operating Expenses (after voluntary fee waiver and expense reduction) 1.40%*** 2.15%***
<FN>
* 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.
*** Without the voluntary fee waiver and expense reduction by the Fund's adviser, Management Fees would be 0.70%
for both classes and Total Fund Operating Expenses would be 1.57% for Class A shares and 2.32% for Class B
shares. This voluntary limitation can be terminated by the Fund's adviser at any time.
***** The expense information contained in this table and its footnotes for New England Strategic Income Fund, New
England Adjustable Rate U.S. Government Fund and New England High Income Fund has been restated to reflect
fees and expenses currently in effect for those Funds.
</FN>
</TABLE>
EXAMPLE
NEW ENGLAND HIGH INCOME FUND
----------------------------
Class A Class B
------- -------
(1) (2)
1 year . . . . . . . . . . . . . . . . $59 $62 $22
3 years . . . . . . . . . . . . . . . . $87 $97 $67
5 years . . . . . . . . . . . . . . . . $118 $125 $115
10 years* . . . . . . . . . . . . . . . $205 $229 $229
(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.
In connection with the new sub-advisory arrangements, Loomis Sayles has agreed
to waive 50% of the sub-advisory fees payable to Loomis Sayles by NEFM under the
new Sub-Advisory Agreement through June 30, 1997. This waiver by Loomis Sayles
will benefit NEFM, and will not reduce the Fund's expenses.
Gary L. Goodenough and Madeline E. Glick, Vice Presidents of Loomis Sayles, have
served as the Fund's portfolio managers since July 1, 1996. Mr. Goodenough
served as a Managing Director at Bear Stearns and Salomon Brothers prior to
joining Loomis Sayles in 1993. Ms. Glick is the founder of MEG Asset Management
and served as its President prior to joining Loomis Sayles in 1991.
The Fund has the ability to invest without limit in Rule 144A securities that
have been determined to be liquid under guidelines established by the trustees
of New England Funds Trust II.
