Via Edgar
May 3, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: New England Funds Trust I
File Nos. 2-98326 and 811-4323
Dear Sir or Madam:
Pursuant to Rule 497(e) of the Securities Act of 1933, as amended,
transmitted for filing on behalf of New England Funds Trust I is a form of
the prospectus dated May 1, 1995 for New England Strategic Income Fund (the
"Fund"). In addition a supplement dated May 1, 1995 to that propsectus is
also transmitted for filing. This form of the prospectus dated May 1, 1995
varies from the form of the Fund's prospectus filed pursuant to Rule 485(a)
on February 15, 1995 which became effective on May 1, 1995.
Acknowledgment of this filing will be confirmed through the Compuserve
System. If you have any questions regarding this filing, please do not
hesitate to call me at (617) 578-1669.
Very truly yours,
[SIGNATURE]
Sheila M. Barry
SMB/eac
Enclosures
CC: R. Connolly
NEW ENGLAND FUNDS TRUST I
NEW ENGLAND STRATEGIC INCOME FUND
Supplement dated May 1, 1995
to New England Strategic Income Fund Prospectus dated May 1, 1995
and New England Bond Funds Prospectus dated May 1, 1995
On the first $25 million in commissionable sales of New England Strategic
Income Fund (the "Fund"), the Distributor will pay additional concessions
to participating investment dealers. Specifically, the Distributor will
pay participating investment dealers 5.00% on commissionable sales of Class
A shares of up to $100,000, which includes a 1.00% additional concession.
On commissionable sales of Class A shares in excess of $100,000, the
Distributor will pay 1.00% in addition to the amount of the dealer's
concession set forth in the Fund's prospectus. During the same period, the
Distributor will pay a total of 5.00% and 2.00%, respectively, on
commissionable sales of Class B and Class C shares, which includes a 1.00%
additional concession.
[LOGO]
NEW ENDLGNAD FUNDS
NEW ENGLAND STRATEGIC INCOME FUND
Prospectus and Application
May 1, 1995
New England Strategic Income Fund (the OFundO), a newly-organized,
diversified mutual fund, is a series of New England Funds Trust I (the
OTrustO), a registered open-end management investment company. Other series
of the Trust are described in separate prospectuses.
The Fund seeks high current income with a secondary objective of capital
growth. There can be no assurance the Fund will achieve its objectives,
which may be changed without shareholder approval.
The Fund offers three classes of shares to the general public (Classes A, B
and C). The offering price is based on the net asset value per share next
determined after an order is received. Class A share purchases generally
involve a sales charge at the time of purchase. No initial sales charge
applies to Class B share purchases. A contingent deferred sales charge
(OCDSCO), however, is imposed upon certain redemptions of Class B shares.
Class B shares automatically convert to Class A shares eight years after
purchase. No initial sales charge or CDSC applies to purchases or
redemptions of Class C shares which do not have a conversion feature. Class
B and Class C shares bear higher 12b-1 fees than Class A shares. See
OBuying Fund Shares -- Sales Charges.O Through a separate prospectus, the
Fund also offers Class Y shares to certain institutional investors.
This prospectus sets forth information you should know before investing in
the Fund. Please read it carefully and keep it for future reference. A
statement of additional information in two parts (the OStatementO) about
the Fund dated May 1, 1995 has been filed with the Securities and Exchange
Commission (the OSECO) and is available free of charge. Write to New
England Funds, L.P. (the ODistributorO), SAI Fulfillment Desk, 399 Boylston
Street, Boston, MA 02116 or call toll free at 1-800-225-5478. The Statement
contains more detailed information about the Fund and is incorporated into
this prospectus by reference.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY AND INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
For general information on the Fund or any of its services and for
assistance in opening an account, contact your investment dealer or call
the Distributor toll free: 1-800-225-5478.
TABLE OF CONTENTS
Page
03 NEW ENGLAND INVESTMENT COMPANIES AND THE FUNDOS ADVISER AND SUBADVISER
03 SCHEDULE OF FEES
Sales charges, yearly operating expenses.
INVESTMENT STRATEGY
05 How the Fund Pursues Its Objectives
07 INVESTMENT RISKS
It is important to understand the risks inherent in the Fund before
you invest.
11 FUND MANAGEMENT
BUYING FUND SHARES
12 Minimum Investment
Everything you need to know to open and add to a New England Strategic
Income Fund account.
12 6 Ways to Buy Fund Shares
- Through your investment dealer
- By mail
- By wire transfer of Federal Funds
- By Investment Builder
- By electronic purchase through ACH
- By exchange from another New England Fund
13 Sales Charges
15 Reduced Sales Charges
(Class A Shares Only)
OWNING FUND SHARES
17 Exchanging Among New England Funds
New England Funds offers three convenient ways to exchange Fund
shares.
17 Fund Dividend Payments
SELLING FUND SHARES
19 4 Ways to Sell Fund Shares
How to withdraw money or close your account.
- Through your investment dealer
- By telephone
- By mail
- By Systematic Withdrawal Plan
20 Repurchase Option
(Class A Shares Only)
An opportunity to reinvest your redemption proceeds within 120 days
for no sales charge.
FUND DETAILS
21 How Fund Share Price is Determined
Additional information you may find important.
21 Income Tax Considerations
22 The FundOs Expenses
23 Performance Criteria
23 Additional Facts About the Fund
25 Appendix A
26 Glossary of Terms
Ratings of Securities
NEW ENGLAND INVESTMENT COMPANIES AND THE FUNDOS ADVISER AND SUBADVISER
The investment adviser and subadviser of the Fund are independently-
operated subsidiaries of New England Investment Companies, L.P. (ONEICO),
the fifth-largest publicly traded investment management firm in the United
States. NEIC is listed on the New York Stock Exchange and through its
subsidiaries or an affiliate manages over $60 billion in assets for
individuals and institutions. The adviser and subadviser operate
independently and are staffed by experienced investment professionals. The
adviser and subadviser apply specialized knowledge and careful analysis to
the pursuit of the FundOs objectives.
NEW ENGLAND FUNDS MANAGEMENT, L.P. (ONEFMO), investment adviser of the
Fund, is a newly organized investment adviser.
LOOMIS, SAYLES & COMPANY, L.P. (OLOOMIS SAYLESO), subadviser to the Fund,
has over $35 billion of assets under management. Loomis Sayles manages
portfolios for institutional investors, individuals and mutual funds.
SCHEDULE OF FEES
Expenses are one of several factors to consider when you invest in the
Fund. The following table summarizes your maximum transaction costs from
investing in the Fund and estimated annual expenses for each class of the
FundOs shares. The Example on the following page shows the cumulative
expenses attributable to a hypothetical $1,000 investment in each class of
shares of the Fund for the periods specified.
SHAREHOLDER TRANSACTION EXPENSES -- PAID DIRECTLY BY SHAREHOLDERS
<TABLE><CAPTION>
<S> <C> <C> <C>
CLASS A CLASS B CLASS C
Maximum Initial Sales Charge
Imposed on a Purchase (as a
percentage of offering price)(1)(2) 4.50% None None
Maximum Contingent Deferred Sales
Charge (as a percentage of original
purchase price or redemption proceeds,
as applicable)(2) (3) 4.00% None
Deferred Sales Charge None None None
Redemption Fee None None None
Exchange Fee None None None
<FN>
(1) A reduced sales charge on Class A shares applies in some cases.
(2) Does not apply to reinvested distributions.
(3) A 1.00% contingent deferred sales charge applies with respect to any
portion of certain purchases of Class A shares greater than $1,000,000
redeemed within approximately 1 year after purchase. See OSales
Charges.O
</TABLE>
ANNUAL OPERATING EXPENSES -- PAID DIRECTLY BY THE FUND, AND INDIRECTLY BY
ITS SHAREHOLDERS (as a percentage of net assets)
<TABLE><CAPTION>
<S> <C> <C> <C>
CLASS A CLASS B CLASS C
Management Fees 0.00%* 0.00%* 0.00%*
12b-1 Fees 0.25% 1.00%** 1.00%**
Administrative Services Fees None None None
Other Expenses 1.00% 1.00% 1.00%
Total Expenses 1.25%* 2.00%* 2.00%*
<FN>
* After fee waiver and expense reduction by the FundOs adviser and
subadviser. Without the voluntary limitations, Management Fees would
be 0.65%; and estimated Total Expenses would be 1.90% for Class A
shares, 2.65% for Class B shares and 2.65% for Class C shares.
** 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.
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment assuming (1) a
5% annual return and (2) unless otherwise noted, redemption at period end.
The 5% return and expenses in the Example should not be considered
indicative of actual or expected Fund performance or expenses, both of
which will vary.
<TABLE><CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C> <C>
(1) (2)
1 year $57 $60 $20 $20
3 years $83 $93 $63 $63
<FN>
(1) Assumes redemption at end of period.
(2) Assumes no redemption.
</TABLE>
The purpose of this fee schedule is to assist you in understanding the
various costs and expenses that you will bear directly or indirectly if you
invest in the Fund.
For information about the expenses of the FundOs Class Y shares, which
differ from the expenses of the Class A, Class B and Class C shares, see
OAdditional Facts About the Fund.O To obtain more information about Class Y
shares, please call the Distributor toll-free at 1-800-225-5478. For
additional information about the FundOs management fees, 12b-1 fees and
other expenses, please see OFund ManagementO and OThe FundOs Expenses.O
A wire fee (currently $5.00) will be deducted from your proceeds if you
elect to transfer redemption proceeds by wire.
Please keep in mind that the Example shown above is hypothetical. The
information above should not be considered a representation of past or
future return or expenses; actual return or expenses may be more or less
than those shown.
INVESTMENT STRAGEGY
The Fund seeks high current income with a secondary objective of capital
growth.
How the Fund Pursues Its Objectives
Investments in the Fund will be pooled with money from other investors in
the Fund to invest in a managed portfolio consisting of securities
appropriate to the FundOs investment objectives and policies. There can be
no assurance that the Fund will achieve its objectives.
The Fund seeks to achieve its investment objectives by investing at least
65% of its total assets in debt instruments. The Fund may invest in debt
instruments issued by corporations based in the United States or abroad and
debt instruments that are convertible into equity securities. The Fund may
also invest in U.S. Government Securities, which term as used in this
prospectus includes all securities issued or guaranteed by the U.S.
Government or its agencies, authorities or instrumentalities; and in
securities issued or guaranteed by foreign governments (including their
political subdivisions, agencies, authorities and/or instrumentalities)
(OForeign Government SecuritiesO) and securities issued by supranational
agencies. The Fund may invest in debt instruments in any rating category
including debt instruments rated in the lowest rating categories (C by
MoodyOs Investors Service, Inc., [OMoodyOsO] and D by Standard and PoorOs
Corporation [OS&PO]) and in instruments that are unrated. Securities rated
below investment grade quality are considered high yield, high risk
securities and are commonly known as Ojunk bonds.O For more information
about the risks of investing in high yield, high risk securities and
securities of foreign issuers, see OInvestment Risks -- Lower Rated Fixed-
Income SecuritiesO and OForeign Securities.O
Under normal market conditions, the Fund will invest in debt instruments of
both domestic and foreign issuers and in corporate as well as government
issues. At any time, however, the Fund may invest up to 100% of its assets
in debt instruments of U.S. issuers, in debt instruments of foreign
issuers, in corporate debt instruments or in government securities. The
Fund may invest up to a total of 35% of its total assets in preferred
stocks, dividend-paying common stocks and shares of closed-end investment
companies (which shares will not exceed 10% of the FundOs total assets).
The proportion of Fund assets invested in corporate bonds, government
bonds, preferred or common stock will vary over time based on changing
market conditions. When Loomis Sayles believes that a particular market
presents more opportunity than other markets, it may increase the
proportion of the FundOs assets invested in that market.
The Fund may invest in Rule 144A securities. For hedging purposes, the Fund
may also purchase and sell options and futures and engage in foreign
currency transactions. The Fund may also invest in mortgage-backed
securities, zero coupon bonds, stripped securities and pay-in-kind
securities.
* U.S. AND FOREIGN GOVERNMENT SECURITIES
Different types of U.S. and Foreign Government Securities have different
kinds of government support. U.S. Government Securities include securities
backed by the full faith and credit of the U.S. Government, as well as many
other securities that are not full faith and credit obligations. For
example, obligations of the Federal Home Loan Banks are supported by the
right of the issuer to borrow from the U.S. Treasury, and obligations of
the Federal Home Loan Mortgage Corporation and the Federal National
Mortgage Association (the OFNMAO) are supported only by the credit of those
