<PAGE>
[Logo - GRAPHIC OMITTED]
Where The Best Minds Meet TM
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION, FINANCIAL STATEMENTS AND HIGHLIGHTS
- --------------------------------------------------------------------------------
GROWTH FUND OF ISRAEL
- ---------------------
December 31, 1996
- ---------------------
<PAGE>
GROWTH FUND OF ISRAEL
PORTFOLIO COMPOSITION
Investments as of December 31, 1996
COMMON STOCK--71.9% OF TOTAL NET ASSETS
SHARES DESCRIPTION VALUE (A)
- --------------------------------------------------------------------------------
BANKS--4.5%
13,600 Investment Company of Bank Hapoalim, Ltd. (c) $ 466,485
-----------
BROADCASTING--4.0%
26,500 Matav Cable Systems Media, Ltd. (ADR) (c) (d) 414,062
-----------
CHEMICALS--9.2%
95,100 Israel Petrochemical Enterprises, Ltd. (c) 442,707
81,036 Makhteshim Chemical Works, Ltd. (c) 510,894
-----------
953,601
COMPUTER SOFTWARE & SERVICES--1.5%
8,700 Nice Systems, Ltd. (ADR) (c) (d) 156,600
-----------
DIVERSIFIED CONGLOMERATES--11.8%
30,100 Koor Industries, Ltd. (ADR) (d) 511,700
10,800 Tadiran, Ltd. (ADR) (d) 303,750
52,500 The Blue Square Chain Stores, Ltd. (c) 411,105
-----------
1,226,555
DRUGS & HEALTH CARE--7.9%
28,750 Agis Industries, Ltd. (c) 210,593
12,150 Teva Pharmaceutical Industries, Ltd. (ADR) (d) 610,537
-----------
821,130
-----------
ELECTRIC--4.3%
42,800 Tower Semi Conductor, Ltd. (c) 449,400
-----------
ELECTRONICS--4.3%
30,750 Orbotech, Ltd. (ADR) (c) (d) 442,031
-----------
FOOD & BEVERAGES--5.9%
124,548 Elite Industries, Ltd. (c) 605,903
-----------
MISCELLANEOUS--5.1%
45,117 Elbit Medical Imaging, Ltd 187,771
45,117 Elbit Systems, Ltd 345,222
-----------
532,993
-----------
PAPER--4.3%
10,800 American Israeli Paper Mills 444,060
-----------
TELECOMMUNICATION--9.1%
218,300 Bezeq (c) 529,649
18,500 Tadiran Telecommunications, Ltd. (ADR) (c) (d) 413,937
-----------
943,586
-----------
Total Common Stock (Identified Cost $6,890,230) 7,456,406
-----------
SHORT TERM INVESTMENTS--29.5%
FACE
AMOUNT
- --------------------------------------------------------------------------------
$1,559,000 Repurchase agreement with State Street Bank &
Trust Co., dated 12/31/96 at 5.750% to be
repurchased at $1,559,498 on 1/02/97
collateralized by $1,245,000 U.S. Treasury
Bond due 8/15/17 with a value of $1,595,546 1,559,000
500,000 American Express Credit Corp., 6.300%, 1/02/97 500,000
500,000 Ford Motor Credit Co., 5.800%, 1/03/97 500,000
500,000 General Electric Capital Corp., 5.650%, 1/02/97 500,000
------------
Total Short Term Investments
(Identified Cost $3,059,000) 3,059,000
-------------
Total Investments--101.4% (Identified Cost
$9,949,230) (b) 10,515,406
Other assets less liabilities (148,915)
-------------
Total Net Assets--100% $ 10,366,491
============
See accompanying notes to the financial statements
<PAGE>
GROWTH FUND OF ISRAEL
FOOTNOTES AS OF 12/31/96
(a)See Note 1a.
(b)Federal Tax Information: At December 31, 1996 the net unrealized appreciation
on investments based on cost of $9,949,230 for federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all invesments in
which there is an excess of value over tax cost. $1,045,340
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value. (478,545)
-----------
Net unrealized appreciation. $ 566,795
==========
(c)Non-income producing security.
(d)An American Depository Receipt (ADR) is a certificate issued by a U.S. bank
representing the right to receive securities of the foreign issuer described.
The value of ADRs are significantly influenced by trading on exchanges not
located in the United States or Canada.
See accompanying notes to the financial statements
<PAGE>
GROWTH FUND OF ISRAEL
Statement of Assets & Liabilities
December 31, 1996
ASSETS
Investments at value $10,515,406
Cash 142,077
Foreign cash at value (Cost $54,668) 55,289
Receivable for:
Fund shares sold 300
Dividends and interest 496
-----------
LIABILITIES 10,713,568
Payable for:
Fund shares redeemed $ 142,544
Payable to Custodian Bank 141,803
Accrued expenses:
Accounting and administrative 1,965
Other expenses 60,765
------------
347,077
------------
NET ASSETS $10,366,491
============
Net Assets consist of:
Capital paid in $ 9,947,314
Undistributed net investment loss (1,014)
Accumulated net realized losses (146,604)
Unrealized appreciation
on investments and foreign currency 566,795
-----------
NET ASSETS $10,366,491
============
Computation of net asset value and offering price:
Net asset value and redemption price of Class A shares
($8,686,876 divided by 675,634 shares of
beneficial interest) $12.86
======
Offering price per share (100/94.25 of $12.86) $13.64*
======
Net asset value and offering price of Class B shares
($1,510,579 divided by 118,061 shares of
beneficial interest) $12.79**
======
Net asset value and offering price of Class C shares
($150,894 divided by 11,736 shares of
beneficial interest) $12.86
======
Identified cost of investments $ 9,949,230
===========
*Based upon single purchases of less than $50,000.
Reduced sales charges apply for purchases in excess of this amount.
**Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charges.
See accompanying notes to financial statements.
<PAGE>
GROWTH FUND OF ISRAEL
Statement of Operations
For the Period March 15, 1996 (a) through December 31, 1996
INVESTMENT INCOME
Dividends $179,411(b)
Interest 40,977
--------
220,388
Expenses
Management fees $ 91,520
Service fees - Class A 17,697
Service and distribution fees - Class B 11,312
Service and distribution fees - Class C 1,099
Trustees' fees and expenses 8,959
Accounting and administrative 12,570
Custodian 50,361
Transfer agent 55,360
Audit and tax services 25,300
Legal 23,431
Printing 8,991
Registration 42,453
Amortization of organization expenses 83,914
Miscellaneous 4,726
--------
Total expenses 437,693
Less fees waived by the investment adviser
and distributor (91,520) 346,173
-------- ---------
Net investment loss (125,785)
REALIZED and UNREALIZED GAIN (LOSS) on INVESTMENTS
and FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments - net (107,204)
Foreign currency transactions - net (12,280)
---------
Total realized loss on investments
and foreign currency transactions (119,484)
---------
Unrealized appreciation on:
Investments - net 566,176
Foreign currency transactions 619
---------
Total unrealized appreciation
on investments and foreign
currency transactions 566,795
---------
Net gain on investment transactions 447,311
--------
NET INCREASE IN NET ASSETS FROM OPERATIONS $321,526
========
(a) Commencement of operations
(b) Net of foreign taxes of: $49,811
See accompanying notes to financial statements.
<PAGE>
GROWTH FUND OF ISRAEL
Statement of Changes in Net Assets
December 31, 1996
For the period
March 15, 1996 (a)
through
December 31, 1996
------------------
FROM OPERATIONS
Net investment loss $ (125,785)
Net realized loss on investments
and foreign currency transactions (119,484)
Unrealized appreciation on investments
and foreign currency transactions 566,795
-----------
Increase in net assets from operations 321,526
-----------
Increase in net assets
derived from capital share transactions 10,044,965
-----------
Total increase in net assets 10,366,491
NET ASSETS
Beginning of the period 0
-----------
End of the period $10,366,491
===========
UNDISTRIBUTED NET INVESTMENT LOSS
Beginning of the period $ 0
===========
End of the period $ (1,014)
===========
(a) Commencement of operations
See accompanying notes to financial statements.
<PAGE>
GROWTH FUND OF ISRAEL
Financial Highlights
Class A Class B Class C
----------------- ------------------- ------------------
For the period For the period For the period
March 15, 1996 (a) March 15, 1996 (a) March 15, 1996 (a)
through through through
December 31, 1996 December 31, 1996 December 31, 1996
----------------- ------------------- ------------------
Net Asset Value,
Beginning of Period $12.50 $12.50 $12.50
------ ------ -------
Income From Investment
Operations
-----------------------
Net Investment loss (0.13)(f) (0.20)(f) (0.20)(f)
Net Realized and
Unrealized Gain on
Investments 0.49 0.49 0.56
------ ------ -------
Total From Investment
Operations 0.36 0.29 0.36
------ ------ -------
Net Asset Value,
End of Period $12.86 $12.79 $12.86
====== ====== ======
Total Return (%)(b) 3.1 2.4 2.9
Ratio of Operating Expenses
to Average Net Assets (%) 4.05(c) 4.80(c) 4.80(c)
Ratio of Net Investment Loss
to Average Net Assets (%) (1.40)(c) (2.15)(c) (2.15)(c)
Portfolio Turnover Rate (%) 53 53 53
Average Commission Rate(d) $0.0181 $0.0181 $0.0181
Net Assets, End
of Period (000) $8,687 $ 1,511 $ 151
(a)Commencement of operations
(b)A sales charge in the case of Class A Shares and a contingent deferred
sales charge in the case of Class B Shares are not reflected in total
return calculations. Not annualized.
(c)Computed on an annualized basis.
(d)For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate generally does not reflect
mark-ups, mark-downs, or spreads on shares traded on a principal basis.
(e)The ratio of operating expenses to
average net assets without giving effect
to the waiver of management fee described
in Note 3a to the Financial Statements would
have been (%) ............ 5.15(c) 5.90(c) 5.90(c)
(f) Per Share net investment income / loss has been calculated using the average
shares outstanding during the year.
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
1. The Fund is a series of New England Funds Trust II, a Massachusetts business
trust (the "Trust"), and is registered under the Investment Company Act of 1940,
as amended, (the "1940 Act") as an open-end management investment company. The
Declaration of Trust permits the Trustees to issue an unlimited number of shares
of the Trust in multiple series (each such series of shares a "Fund").
The Fund offers Class A, Class B and Class C shares. The Fund commenced its
public offering of Class A, Class B and Class C shares on March 15, 1996. Class
A shares are sold with a maximum front end sales charge of 5.75%. Class B shares
do not pay a front end sales charge, but pay a higher ongoing distribution fee
than Class A shares for eight years (at which point they automatically convert
to Class A shares), and are subject to a contingent deferred sales charge if
those shares are redeemed within five years of purchase. Class C shares do not
pay front end or contingent deferred sales charges and do not convert to any
other class of shares, but they do pay a higher ongoing distribution fee than
Class A shares. Expenses of the Fund are borne pro-rata by the holders of each
class of shares, except that each class bears expenses unique to that class
(including the Rule 12b-1 service and distribution fees applicable to such
class), and votes as a class only with respect to its own Rule 12b-1 plan.
Shares of each class would receive their pro-rata share of the net assets of the
Fund, if the Fund were liquidated. In addition, the Trustees approve separate
dividends on each class of shares.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles for investment companies.
a. SECURITY VALUATION. Equity securities are valued on the basis of valuations
furnished by a pricing service, authorized by the Board of Trustees, which
provides the last reported sale price for securities listed on an applicable
securities exchange or on the NASDAQ national market system, or, if no sale was
reported and in the case of over-the-counter securities not so listed, the last
reported bid price. Short-term obligations with a remaining maturity of less
than sixty days are stated at amortized cost, which approximates market value.
All other securities and assets are valued at their fair value as determined in
good faith by Harris Associates, L.P., the Fund's subadviser, under the
supervision of the Fund's trustees.
b. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME. Security transactions
are accounted for on the trade date (the date the buy or sell is executed).
Dividend income is recorded on the ex-dividend date or when the Fund learns of
the dividend, and interest income is recorded on the accrual basis. In
determining net gain or loss on securities sold, the cost of securities has been
determined on the identified cost basis.
c. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are
maintained in U.S. dollars. The value of securities, currencies and other assets
and liabilities denominated in currencies other than U.S. dollars are translated
into U.S. dollars based upon foreign exchange rates prevailing at the end of the
period. Purchases and sales of investment securities, income and expenses are
translated on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from: sales of
foreign currency, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities at period end, resulting from changes in the exchange
rate.
FORWARD FOREIGN CURRENCY CONTRACTS. The Fund may use foreign currency contracts
to facilitate transactions in foreign securities and to manage the Fund's
currency exposure. Contracts to buy generally are used to acquire exposure to
foreign currencies, while contracts to sell are used to hedge the Fund's
investments against currency fluctuation. Also, a contract to buy or sell can
offset a previous contract. These contracts involve market risk in excess of the
unrealized gain or loss reflected in the Fund's Statement of Assets and
Liabilities. The U.S. dollar value of the currencies the Fund has committed to
buy or sell (if any) is shown in the portfolio composition under the caption
"Forward Currency Contracts Outstanding." This amount represents the aggregate
exposure to each currency the Fund has acquired or hedged through currency
contracts outstanding at period end. Losses may arise from changes in the value
of the foreign currency or if the counterparties do not perform under the
contracts' terms.
All contracts are "marked-to-market" daily at the applicable translation rates
and any gains or losses are recorded for financial statement purposes as
unrealized until settlement date. Risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
d. FEDERAL INCOME TAXES. The Fund intends to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies, and to
distribute to its shareholders all of its income and any net realized capital
gains, at least annually. Accordingly, no provision for federal income tax has
been made.
e. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are
recorded on the ex-dividend date. The timing and characterization of certain
income and capital gains distributions are determined in accordance with federal
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for organization
costs, foreign currency transactions and net operating losses for book and tax
purposes. Permanent book and tax basis differences will result in
reclassification to capital accounts.
f. REPURCHASE AGREEMENTS. The Fund, through its custodian, receives delivery of
the underlying securities collateralizing repurchase agreements. It is the
Fund's policy that the market value of the collateral be at least equal to 100%
of the repurchase price. Harris Associates, L.P. is responsible for determining
that the value of the collateral is at all times at least equal to the
repurchase price. Repurchase agreements could involve certain risks in the event
of default or insolvency of the other party including possible delays or
restrictions upon the portfolio's ability to dispose of the underlying
securities.
g. ORGANIZATION EXPENSE. Costs incurred in fiscal 1996 in connection with the
Fund's organization and registration, amounting to approximately $83,914 in the
aggregate, were paid by the Fund and are being amortized by the Fund over 60
months.
2. PURCHASES AND SALES OF SECURITIES (excluding short-term investments) for the
Fund for the period December 31, 1996 were $12,000,028 and $5,002,594
respectively.
3a. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES. The Fund pays
management fees to its investment adviser, New England Funds Management L.P.
("NEFM") at the annual rate of 1.10% of the Fund's average daily net assets.
NEFM pays the Fund's investment subadviser, Harris Associates, L.P. ("Harris
Associates"), a fee at the annual rate of 0.70% of the first $50 million of the
Fund's average daily net assets, and 0.60% of such assets in excess of $50
million. NEFM pays the Fund's special economic and market subadviser, Batchua
Securities and Investments, Ltd. ("Batchua Securities"), a fee at the annual
rate of 0.10% of the Fund's average daily assets. Certain officers and directors
of NEFM are also officers or trustees of the Fund. NEFM and Harris Associates
are wholly owned subsidiaries of New England Investment Companies, L.P. which is
a subsidiary of Metropolitan Life Insurance Company ("Met Life"). Fees earned by
NEFM and those paid by NEFM to Harris Associates and Batchua Securities during
the period ended December 31, 1996, are as follows:
FEES EARNED FEES PAID
BY NEFM BY NEFM
- ----------- ---------
$ 91,520 (a) -- NEFM
-- $ 58,240 Harris Associates
-- 2,775 Batchua Securities
- -------- --------
$ 91,520 (a) $ 61,015
======== ========
(a) NEFM has agreed to waive its management fees from the commencement of
operations of the Fund until further notice.
b. ACCOUNTING AND ADMINISTRATIVE EXPENSE. New England Funds, L.P. ("New England
Funds"), the Fund's distributor, is a wholly owned subsidiary of New England
Investment Companies, L.P. and performs certain accounting and administrative
services for the Fund. The Fund reimburses New England Funds for all or part of
New England Funds' expenses of providing these services which include the
following: (i) expenses for personnel performing bookkeeping, accounting,
internal auditing and financial reporting functions and clerical functions
relating to the Fund, (ii) expenses for services required in connection with the
preparation of registration statements and prospectuses, shareholder reports and
notices, proxy solicitation material furnished to shareholders of the Fund or
regulatory authorities and reports and questionnaires for SEC compliance, and
(iii) registration, filing and other fees in connection with requirements of
regulatory authorities. For the period ended December 31, 1996, these expenses
amounted to $12,570 and are shown separately in the financial statements as
accounting and administrative.
c. TRANSFER AGENT FEES. New England Funds is the transfer and shareholder
servicing agent for the Fund. For the period ended December 31, 1996, the Fund
paid New England Funds $44,999 as compensation for its services in that
capacity.
d. SERVICE AND DISTRIBUTION FEES. Pursuant to Rule 12b-1 under the 1940 Act, the
Trust has adopted a Service Plan relating to the Fund's Class A shares (the
"Class A Plan") and Service and Distribution Plans relating to the Fund's Class
B and Class C shares (the "Class B and Class C Plans").
Under the Class A Plan, the Fund pays New England Funds a monthly service fee at
the annual rate of up to 0.25% of the average daily net assets attributable to
the Fund's Class A shares, as reimbursement for expenses (including certain
payments to securities dealers, who may be affiliated with New England Funds)
incurred by the New England Funds in providing personal services to investors in
Class A shares and/or the maintenance of shareholder accounts. For the period
ended December 31, 1996, the Fund paid New England Funds $17,697 in fees under
the Class A Plan.
Under the Class B and Class C Plans, the Fund pays New England Funds monthly
service fees at the annual rate of up to 0.25% of the average daily net assets
attributable to the Fund's Class B and Class C shares, as compensation for
services provided and expenses (including certain payments to securities
dealers, who may be affiliated with New England Funds) incurred by New England
Funds in providing personal services to investors in Class B shares and/or the
maintenance of shareholder accounts. For the period ended December 31, 1996 the
Fund paid New England Funds $2,828 and $275 in service fees under the Class B
and Class C Plans, respectively.
Also under the Class B and Class C Plan, the Fund pays New England Funds monthly
distribution fees at the annual rate of up to 0.75% of the average daily net
assets attributable to the Fund's Class B and Class C shares, as compensation
for services provided and expenses (including certain payments to securities
dealers, who may be affiliated with New England Funds) incurred by New England
Funds in connection with the marketing or sale of Class B and Class C shares.
For the period ended December 31, 1996, the Fund paid New England Funds $8,484
and $824 in distribution fees under the Class B and Class C plans, respectively.
Commissions (including contingent deferred sales charges) on Fund shares paid to
New England Funds by investors in shares of the Fund during the period ended
December 31, 1996 amounted to $135,588.
e. TRUSTEES FEES AND EXPENSES. The Fund does not pay any compensation directly
to its officers or trustees who are directors, officers or employees of NEFM,
New England Funds, New England Investment Companies or their affiliates, other
than registered investment companies. Each other trustee is compensated by the
Fund as follows:
Annual Retainer $714
Meeting Fee $114/meeting
Committee Meeting Fee $68/meeting
A deferred compensation plan is available to the trustees on a voluntary basis.
Each participating trustee will receive an amount equal to the value that such
deferred compensation would have been, had it been invested in the Fund on the
normal payment date.
4. CAPITAL SHARE TRANSACTIONS. At December 31, 1996 there was an unlimited
number of shares of beneficial interest authorized, divided into three classes,
Class A, Class B and Class C capital stock. Transactions in capital shares were
as follows:
FOR THE PERIOD MARCH 15, 1996 (A)
THROUGH DECEMBER 31, 1996
---------------------------------
CLASS A SHARES AMOUNT
- ------- -------- --------
Shares sold............................... 780,662 $ 9,777,405
Shares repurchased........................ (105,028) (1,331,150)
-------- -----------
Net increase.............................. 675,634 $ 8,446,255
-------- -----------
FOR THE PERIOD MARCH 15, 1996 (A)
THROUGH DECEMBER 31, 1996
---------------------------------
CLASS B SHARES AMOUNT
- ------- -------- --------
Shares sold............................... 165,732 $ 2,064,825
Shares repurchased........................ (47,672) (609,844)
------- -----------
Net increase.............................. 118,060 $ 1,454,981
------- -----------
FOR THE PERIOD MARCH 15, 1996 (A)
THROUGH DECEMBER 31, 1996
---------------------------------
CLASS C SHARES AMOUNT
- ------- -------- --------
Shares sold............................... 17,212 $ 213,730
Shares repurchased........................ (5,476) (70,001)
------- -----------
Net increase.............................. 11,736 $ 143,729
------- -----------
Increase derived from capital
share transactions....................... 805,430 $10,044,965
------- -----------
(a) Commencement of operations.
5. SUBSEQUENT EVENTS. On December 10, 1996, the Board of Trustees approved a
proposal to liquidate the Fund effective January 31, 1997. The Fund's
liquidation represented a taxable disposition of assets to shareholders and
shareholders elected one of three action plans to take with the proceeds of
their Fund shares: an automatic exchange for shares of New England Star
Worldwide Fund if no action was taken, an exchange for shares of any other New
England Fund they selected, or shares could be exchanged for cash.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of GROWTH FUND OF ISRAEL
In our opinion, the accompanying statement of assets & liabilities, including
the portfolio composition, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects , the financial position of Growth Fund of Israel ("the Fund")
at December 31, 1996, and the results of its operations, the changes in its net
assets and the financial highlights for the period March 15, 1996 (Commence of
operations) through December 31, 1996, in conformity with generally accepted
accounting principles. These financial statements and the financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities owned at December 31, 1996 by correspondence with the
custodian provides a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
February 17, 1997