New England Zenith Fund
Draycott International Equity Series
Supplement dated January 23, 1997 to Prospectus dated May 1,
1996 as supplemented or revised August 30, 1996 and December
17, 1996 and as supplemented January 23, 1997
On January 22, 1997, the Board of Trustees of New England
Zenith Fund (the "Fund") approved a new Subadvisory
Agreement (the "New Agreement") relating to the Fund's
Draycott International Equity Series (the "Series") between
TNE Advisers, Inc. and Morgan Stanley Asset Management Inc.
("MSAM"). The New Agreement is expected to become effective
on May 1, 1997, subject to shareholder approval, if
required. (Shareholder approval of the New Agreement will
be required unless the Fund obtains an order of exemption
from the Securities and Exchange Commission relieving it of
that requirement.) Under the New Agreement, MSAM would
become the subadviser of the Series, succeeding Draycott
Partners, Ltd., and would be responsible for the day-to-day
management of the Series' investment operations under the
oversight of TNE Advisers, Inc. The name of the Series will
be changed to the "Morgan Stanley International Magnum
Equity Series" at the time the New Agreement takes effect.
The transition from Draycott Partners, Ltd. to MSAM as
subadviser of the Series will involve certain portfolio
transaction costs as MSAM repositions the Series' portfolio
to reflect a change in the Series' investment objective and
strategy, as described below. It is impossible to estimate
with certainty what the amount of these transaction costs
will be, but it is currently not expected that such costs
would exceed 2.00% of the Series' net asset value.
The management fee payable by the Series to TNE Advisers,
Inc. will remain at 0.90% of all the Series' average daily
net assets. The fee payable by TNE Advisers, Inc. to MSAM
under the New Agreement will be at the annual rate of 0.75%
of the first $30,000,000 of the Series' average daily net
assets; 0.60% of the next $40,000,000 of the Series' average
daily net assets; 0.45% of the next $30,000,000 of the
Series' average daily net assets and 0.40% of amounts in
excess of $100,000,000.
The investment objective of the Series is currently to seek
total return from long-term growth of capital and dividend
income, primarily through investment in international equity
securities. When MSAM becomes subadviser of the Series, the
Series will continue to invest primarily in international
equity securities; however, the Series' investment objective
will be long-term capital appreciation. The production of
any current income will be incidental to this objective.
The countries in which the Series may invest are those
represented in the Morgan Stanley Capital International
Index (the "EAFE Index"), which includes Australia, Japan,
New Zealand, most of the nations in Western Europe and
certain developed countries in Asia such as Hong Kong and
Singapore. Under normal circumstances at least 65% of the
total assets of the Series will be invested in equity
securities of issuers in at least three different countries
outside the United States.
In managing the Series' portfolio, MSAM will first determine
what percentage of the Series' assets should be invested in
each region represented in the EAFE Index. This
determination will be based on projections of comparative
interest rates, currencies, corporate profits and economic
growth among the various regions represented in the EAFE
Index. After these regional allocations are determined, the
portfolio manager for each region selects the stocks of
issuers in these respective region.
Francine J. Bovich will act as portfolio manager of the
Series. Ms. Bovich joined MSAM as a Principal in 1993.
Previously, Ms. Bovich was Principal and Executive Vice
President of Westwood Management Corp., a registered
investment adviser.
