<PAGE>
- --------------------------------------------------------------------------------
[LOGO]
NEW ENGLAND FUNDS
Where The Best Minds Meet(TM)
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT AND PERFORMANCE UPDATE
- --------------------------------------------------------------------------------
NEW ENGLAND
VALUE FUND
- -------------
JUNE 30, 1996
- -------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
July 25, 1996
DEAR SHAREHOLDER,
New England Funds welcomes the opportunity to present you with the 1996
Semiannual Report for New England Value Fund, containing your portfolio manager
commentary and complete financial information.
ECONOMIC GROWTH IN THE FIRST HALF OF 1996
Moderate growth with low inflation was the economic story during the first
half of 1996. U.S. Gross Domestic Product (GDP), a bellwether of economic
growth, remained strong at 2.3% through June, just shy of what most economists
consider optimal growth. As a result, the Federal Reserve Board opted not to
tinker with interest rates through the first half of the year, save for a
quarter-point ease in short-term rates in late January. The relatively calm
economic waters had a stimulating effect on the domestic equity market, boosting
stocks 537 points to 5,654 at the end of June, as measured by the Dow Jones
Industrial Average. Bond yields did not fare as well, rising to 7.00% at the end
of June from 6.65% earlier in the year. Money market yields remained stable,
falling back only slightly during the past six months.
THE BENEFITS OF MAINTAINING A LONG-TERM FOCUS
But the market volatility of the first three weeks in July claimed 5.5% of
the Dow Jones Industrial Average's first-half gains. Again, we are reminded that
no bull market lasts forever. Long-term financial goals are key in times like
these and it's important to anticipate this type of market volatility and remain
committed to your financial plan.
It's also a good idea to ask your financial representative for help. A
financial representative can guide you through volatile markets and help you
meet your long-term financial goals. A recent study by Dalbar, Inc., a mutual
fund monitoring and analytical service, shows that, on average, mutual fund
investors who bought and held shares, with the assistance of a financial
representative, enjoyed the benefits of a long-term commitment. Consequently,
they benefitted from higher returns than direct investors and others who bought
and sold, although this does not occur in every case.
CELEBRATING THE BIRTHDAYS OF THREE NEW ENGLAND FUNDS
During the past two months, we've celebrated the birthdays of three of our
most popular funds: New England Growth Opportunities Fund; New England Strategic
Income Fund and New England Star Advisers Fund. Demonstrating the remarkable
scope and breadth of our funds, the Growth Opportunities Fund celebrated its
65th birthday in May while the fast-growing Strategic Income and Star Advisers
Funds marked their first and second birthdays, respectively. We're proud of all
of our funds, but take special pride in recognizing that, whether six months or
65-years-old, all New England Funds are designed to help investors achieve their
goals.
NEW ENGLAND FUNDS: THE PLACE "WHERE THE BEST MINDS MEET"(TM)
The longevity of our more seasoned funds and the potential for growth of our
newer ones illustrates the ongoing progress of New England Funds. Our unique
multiple-adviser approach brings together some of the best minds in the
investment business. The ability to attract top-notch investment advisers and
our multiple-adviser approach to fund management are the cornerstones of New
England Funds' investment philosophy and the essence of our corporate logo,
Where The Best Minds Meet(TM).
OUTLOOK FOR THE REST OF 1996
Going forward, we anticipate that the economy will continue to grow
moderately and that inflationary pressures will not be excessive. While we
estimate the GDP may rise somewhat from its current level of 2.3%, the Federal
Reserve should be reluctant to tighten the money supply by raising short-term
interest rates. We also believe that the equity markets will continue to be
volatile through the rest of the year.
We believe that you will find your portfolio manager commentary informative.
If you have any questions or comments, please contact your financial
representative or New England Funds directly at 800-225-5478.
Sincerely,
/s/Henry L.P. Schmelzer
Henry L.P. Schmelzer, President
<PAGE>
- --------------------------------------------------------------------------------
NEW ENGLAND VALUE FUND
- --------------------------------------------------------------------------------
INVESTMENT RESULTS THROUGH JUNE 30, 1996
Putting Performance into Perspective
The graph comparing your Fund's performance to a benchmark index provides you
with a general sense of how your Fund performed. To put this information in
context, it may be helpful to understand the special differences between the
two. Your Fund's total return for the period shown appears with and without
sales charges and includes Fund expenses and management fees. A securities index
measures the performance of a theoretical portfolio. Unlike a fund, the index is
unmanaged; there are no expenses that affect the results. In addition, few
investors could purchase all of the securities necessary to match the index.
And, if they could, they would incur transaction costs and other expenses.
[A chart in the form of a line graph appears here, illustrating the growth of a
$10,000 investment in Class A Shares, since 6/30/86, compared to the S&P 500
Index. The data points from the graph are as follows:]
- --------------------------------------------------------------------------------
A $10,000 INVESTMENT IN CLASS A SHARES
- --------------------------------------------------------------------------------
Value Value
Year NAV POP S&P 500
- ------- ------- ------- -------
6/30/86 $10,000 $9,425 $10,000
1987 $12,379 $11,667 $12,509
1988 $10,676 $10,062 $11,646
1989 $11,564 $10,899 $14,035
1990 $12,960 $12,214 $16,337
1991 $13,210 $12,450 $17,544
1992 $15,091 $14,223 $19,907
1993 $17,545 $16,536 $22,611
1994 $18,734 $17,657 $23,011
1995 $22,635 $21,333 $28,992
1996 $27,236 $25,670 $36,510
- --------------------------------------------------------------------------------
This illustration represents past performance of Class A shares and cannot
predict future results. Investment return and principal value may vary,
resulting in a gain or loss on the sale of shares. Class B, Class C and Class
Y share performance will be greater or less than that shown based on
differences in inception date, fees and sales charges. All Index and Fund
performance assumes reinvested distributions.
<PAGE>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS 6/30/96
- --------------------------------------------------------------------------------
CLASS A (INCEPTION 6/5/70) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Net Asset Value(1) 20.33% 15.79% 15.57% 10.54%
With Max. Sales Charge(2) 13.38 13.53 14.22 9.89
Lipper Growth & Income Avg.(5) 22.13 14.48 14.36 11.82
CLASS B (INCEPTION 9/13/93) 1 YEAR SINCE INCEPTION
Net Asset Value(1) 19.58% 14.89%
With CDSC(3) 15.58 14.05
Standard & Poor's 500(4) 25.93 17.32
Lipper Growth & Income Avg.(5) 22.13 n/a
CLASS C (INCEPTION 12/30/94) 1 YEAR SINCE INCEPTION
Net Asset Value(1) 19.45% 26.00%
Standard & Poor's 500(4) 25.93 32.43
Lipper Growth & Income Avg.(5) 22.13 n/a
CLASS Y (INCEPTION 3/31/93) 1 YEAR SINCE INCEPTION
Net Asset Value(1) 20.67% 18.71%
Standard & Poor's 500(4) 25.93 15.94
Lipper Growth & Income Avg.(5) 22.13 n/a
These returns represent past performance. Investment return and principal
value will fluctuate so that shares, upon redemption, may be worth more or
less than original cost. Class Y shares are available only to certain
institutional investors. Share price and return may vary.
NOTES TO CHARTS AND PERFORMANCE UPDATE
(1) Net Asset Value (NAV) performance assumes reinvestment of all distributions
and does not reflect the payment of a sales charge at the time of purchase.
(2) With Maximum Sales Charge performance assumes reinvestment of all
distributions and reflects the maximum sales charge of 5.75% at the time of
purchase of Class A shares.
(3) With Contingent Deferred Sales Charge (CDSC) performance assumes a maximum
4% sales charge is applied to a redemption of Class B shares. The sales
charge will decrease over time, declining to zero five years after the
purchase of shares.
(4) Standard & Poor's 500 Index (S&P 500) is an unmanaged index representing the
performance of 500 major companies, most of which are listed on the New York
Stock Exchange. The S&P 500 performance has not been adjusted for ongoing
management, distribution and operating expenses and sales charges applicable
to mutual fund investments.
(5) Lipper Average is an average of the total return performance (calculated on
the basis of net asset value) of funds with similar investment objectives as
calculated by Lipper Analytical Services, an independent mutual fund ranking
service.
<PAGE>
- ----------------
[Photo of
Doug Ramos]
- ----------------
- ----------------
[Photo of
Carol McMurtrie]
- ----------------
- ----------------
[Photo of
Tricia Mills]
- ----------------
NEW ENGLAND VALUE FUND
Portfolio Managers: Doug Ramos, Carol McMurtrie,
Tricia Mills; Loomis, Sayles & Co., L.P.
At the outset of 1996, most investors were expecting
economic growth to start slowly and accelerate as the year progressed. Some
adventurous souls even discussed the possibility of a recession. At the time
this all seemed very reasonable; economic growth had slowed dramatically in the
fourth quarter of 1995, the East Coast was struck by a severe blizzard, and the
federal government's partial shutdown all pointed to a weak first quarter.
However, the economic picture began to change in February and March.
Unexpectedly strong reports on employment and light vehicle sales suggested that
the economy was not as weak as expected. Fixed-income investors started
questioning the prospect of further Federal Reserve easing, and stock investors
became concerned that the Fed would raise interest rates to rein in economic
growth and keep inflation from gaining momentum. In February, rising interest
rates halted the stock market rally that began on January 11.
While the initial rally in stocks was stopped, renewed economic growth and the
prospects for stronger earnings growth in the second half of the year helped
stocks trade marginally higher in May and June.
How Your Fund Performed
The equity markets continue to exhibit a positive bias toward
large-capitalization growth stocks, while low P/E ("value") and
mid-capitalization stocks continue to lag. Perhaps reversing a long-term trend,
small-capitalization stocks are staging an impressive comeback. However, the
Fund's mid- to large-capitalization value emphasis continues to hinder
performance compared with the Standard & Poor's 500(R) Index.
For the first two quarters of 1996, stocks, as measured by the S&P 500, produced
a total return of 10.1%. Your Fund returned 8.2% over the same period ("A"
shares at NAV).
How We Managed Your Fund
The Fund's financial sector holdings did very well, especially in the first
quarter. In the banking industry, holdings in Chase Manhattan, NationsBank and
First Interstate, now part of Wells Fargo, performed very well. Industry
consolidation and cost cutting continue to benefit our bank holdings, while
concerns about credit quality and loan "charge offs" have recently hurt
performance. Significant positive returns were also recorded by Green Tree
Financial and Ace Ltd., an insurance company.
In the basic materials sector, chemical holdings in DuPont and Praxair did well,
benefiting from company-specific events. Energy was the Fund's best performing
sector, completely reversing last year's results. Rising natural gas prices were
the catalyst to outstanding performance of El Paso Natural Gas. Strong refining
margins, especially in California, contributed to Ultramar's great performance.
Finally, technology performed well with handsome returns generated by Intel
Corp., EMC Corp., and IBM (recently sold). The one poor performer in the
portfolio was the utility sector, which was hurt by the rise in interest rates.
Looking Ahead
In anticipation of solid continued potential for economic growth through the end
of the year, as well as continued potential for an increase in the rate of
corporate earnings growth, we continue to invest in stocks with below average
P/E ratios and above average long-term earnings growth potential. Stock
selection remains a critical element in determining performance for "value"
portfolios. We believe that the market's current bias toward
large-capitalization growth stocks will reverse, though it may take an
acceleration in earnings growth rates.
<PAGE>
- --------------------------------------------------------------------------------
YOUR FUND'S FIVE LARGEST INVESTMENTS 6/30/96*
- --------------------------------------------------------------------------------
PERCENTAGE
COMPANY OF ASSETS
- ----------------------------------------------------
1. INTEL CORP. 2.31%
Semiconductor memory circuits
- ----------------------------------------------------
2. CANADIAN PAC LTD. 2.21%
Transportation, natural resources
- ----------------------------------------------------
3. CARNIVAL CORP. 2.19%
Cruise ships, hotel, casino
- ----------------------------------------------------
4. ACE LTD. 2.18%
Provides liability insurance
- ----------------------------------------------------
5. EVERETS REINSURANCE HOLDINGS 2.18%
Reinsurance company
- --------------------------------------------------------------------------------
YOUR FUND'S TEN LARGEST STOCK SECTORS AS OF 6/30/96*
- --------------------------------------------------------------------------------
PERCENTAGE
INDUSTRY OF ASSETS
- ----------------------------------------------------
1. INSURANCE 8.6%
- ----------------------------------------------------
2. BANKS 6.3%
- ----------------------------------------------------
3. CHEMICALS 6.1%
- ----------------------------------------------------
4. FREIGHT & TRANSPORTATION 6.1%
- ----------------------------------------------------
5. RETAIL -- FOOD & DRUG 6.0%
- ----------------------------------------------------
6. TELECOMMUNICATIONS 6.0%
- ----------------------------------------------------
7. TOBACCO 6.0%
- ----------------------------------------------------
8. FINANCIAL SERVICES 5.9%
- ----------------------------------------------------
9. HOUSING & BUILDING MATERIALS 5.8%
- ----------------------------------------------------
10. AEROSPACE 5.2%
*Portfolio holdings and asset allocations will vary.
<PAGE>
Glossary for Mutual Fund Investors
TOTAL RETURN - The change in value of a mutual fund investment over a specific
time period, assuming all earnings are reinvested in additional shares of the
fund. Expressed as a percentage.
INCOME DISTRIBUTIONS - Payments to shareholders resulting from the net interest
or dividend income earned by a fund's portfolio.
CAPITAL GAINS DISTRIBUTIONS - Payments to shareholders of profits earned from
selling securities in a fund's portfolio. Capital gains distributions are
usually paid once a year.
PRICE/EARNINGS RATIO - Current market price of a stock divided by its earnings
per share. Also known as the "multiple," the price/earnings ratio gives
investors an idea of how much they are paying for a company's earning power and
is a useful tool for evaluating the costs of different issues.
GROWTH INVESTING - An investment style that emphasizes companies with strong
earnings growth. Growth investing is generally considered more aggressive than
"value" investing.
VALUE INVESTING - A relatively conservative investment approach that focuses on
companies that may be temporarily out of favor or whose earnings or assets
aren't fully reflected in their stock prices. Value stocks will tend to have a
lower price/earnings ratio than that of growth stocks.
STANDARD & POOR'S 500 - Market value-weighted index showing the change in
aggregate market value of 500 stocks relative to the base period of 1941-1943.
It is composed mostly of companies listed on the New York Stock Exchange.
<PAGE>
[LOGO]
NEW ENGLAND FUNDS
Where The Best Minds Meet(TM)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION, FINANCIAL STATEMENTS AND HIGHLIGHTS
- --------------------------------------------------------------------------------
NEW ENGLAND
VALUE FUND
- -------------
JUNE 30, 1996
- -------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Investments as of June 30, 1996
(unaudited)
COMMON STOCK -- 96.7% OF TOTAL NET ASSETS
SHARES DESCRIPTION VALUE (a)
- -------------------------------------------------------------------------------
AEROSPACE--5.2%
49,500 Lockheed Martin Corp. ........................ $ 4,158,000
89,000 Northrop Grumman Corp. ....................... 6,063,125
106,500 Raytheon Co. ................................. 5,498,062
------------
15,719,187
------------
APPAREL & TEXTILES--0.2%
21,800 Reebok International, Ltd. ................... 733,025
------------
AUTOMOTIVE & RELATED--3.4%
90,857 Chrysler Corp. ............................... 5,633,134
90,500 General Motors Corp. ......................... 4,739,938
------------
10,373,072
------------
BANKS--6.3%
62,700 Bank of New York, Inc. ....................... 3,213,375
71,600 Chase Manhattan Corp. ........................ 5,056,750
51,600 NationsBank Corp. ............................ 4,263,450
150,500 Norwest Corp. ................................ 5,248,688
4,333 Wells Fargo & Co. ............................ 1,035,045
------------
18,817,308
------------
CHEMICALS--6.1%
23,700 Air Products & Chemicals, Inc. ............... 1,368,675
77,200 E.I. Du Pont de Nemours & Co. ................ 6,108,450
99,700 PPG Industries, Inc. ......................... 4,860,375
139,700 Praxair, Inc. ................................ 5,902,325
------------
18,239,825
------------
COMPUTERS & BUSINESS EQUIPMENT--1.8%
296,600 EMC Corp. (c) ................................ 5,524,175
--------------
CONGLOMERATES--3.8%
102,200 Allied Signal, Inc. .......................... 5,838,175
145,400 Philips Electronics N.V. ..................... 4,743,675
12,300 Textron, Inc. ................................ 982,463
------------
11,564,313
------------
ELECTRIC UTILITIES--1.7%
282,400 Edison International ......................... 4,977,300
------------
ELECTRONIC COMPONENTS--3.2%
94,600 Intel Corp. .................................. 6,947,188
55,000 Texas Instruments, Inc. ...................... 2,743,125
------------
9,690,313
------------
FINANCIAL SERVICES--5.9%
66,300 Federal Home Loan Mortgage Corp. ............. 5,668,650
192,400 Federal National Mortgage Association ........ 6,445,400
180,900 Green Tree Financial Corp. ................... 5,653,125
------------
17,767,175
------------
FOOD--AGRIBUSINESS--2.0%
219,800 IBP, Inc. .................................... 6,071,975
------------
FREIGHT TRANSPORTATION--6.1%
67,600 Burlington Northern Santa Fe ................. 5,467,150
302,400 Canadian Pacific, Ltd. ....................... 6,652,800
77,400 Federal Express Corp. (c) .................... 6,346,800
------------
18,466,750
------------
GAS & PIPELINE UTILITIES--2.6%
65,693 El Paso Natural Gas Co. ...................... 2,529,181
160,200 Panenergy Corp. .............................. 5,266,575
------------
7,795,756
------------
HEALTH CARE--DRUGS--1.7%
191,300 Glaxo Wellcome PLC (ADR) (d) ................. 5,117,275
------------
HEALTH CARE--SERVICES--1.8%
443,600 Beverly Enterprises, Inc. (c) ................ 5,323,200
------------
HOUSEHOLD PRODUCTS--2.2%
108,200 Premark International, Inc. .................. 2,001,700
108,200 Tupperware Corp. ............................. 4,571,450
------------
6,573,150
------------
HOUSING & BUILDING MATERIALS--5.8%
96,900 Armstrong World Industries, Inc. ............. 5,583,862
147,800 Black & Decker Corp. ......................... 5,708,775
202,500 Masco Corp. .................................. 6,125,625
------------
17,418,262
------------
INSURANCE--8.6%
139,900 ACE, Ltd. .................................... 6,575,300
110,600 Chubb Corp. .................................. 5,516,175
253,900 Everest Reinsurance Holdings, Inc. ........... 6,569,662
139,000 First Colony Corp. ........................... 4,309,000
21,600 Lincoln National Corp., Inc. ................. 999,000
42,400 Providian Corp. .............................. 1,817,900
------------
25,787,037
------------
LEISURE TIME--4.1%
215,500 American Greetings Corp. ..................... 5,899,312
228,200 Carnival Corp. ............................... 6,589,275
------------
12,488,587
------------
OIL--3.7%
155,200 Repsol S.A. (ADR) (d) ........................ 5,393,200
15,800 Tosco Corp. .................................. 793,950
168,600 Ultramar Corp. ............................... 4,889,400
------------
11,076,550
------------
PACKAGING--2.1%
138,400 Crown Cork and Seal Co., Inc. ................ 6,228,000
------------
REITS--0.4%
36,300 Meditrust SBI ................................ 1,211,513
------------
RETAIL--FOOD & DRUG--6.0%
273,800 Eckerd Corp. (c) ............................. 6,194,725
149,100 Kroger Co. (c) ............................... 5,889,450
150,300 Melville Corp. ............................... 6,087,150
------------
18,171,325
------------
TELECOMMUNICATION--6.0%
71,000 Ameritech Corp. .............................. 4,215,625
18,300 Bellsouth Corp. .............................. 775,462
199,200 DSC Communications Corp. (c) ................. 6,000,900
42,900 GTE Corp. .................................... 1,919,775
156,000 Pacific Telesis Group ........................ 5,265,000
------------
18,176,762
------------
TOBACCO--6.0%
70,100 Loews Corp. .................................. 5,529,137
62,900 Philip Morris Companies, Inc. ................ 6,541,600
171,500 UST, Inc. .................................... 5,873,875
------------
17,944,612
------------
Total Common Stock (Identified
Cost $229,385,715) .......................... 291,256,447
------------
SHORT TERM INVESTMENT -- 2.9%
FACE
AMOUNT
- --------------------------------------------------------------------------------
$8,839,000 Associates Corp. of North America 5.4500%
7/01/96 ..................................... 8,839,000
------------
Total Short Term Investment (Identified Cost
$8,839,000) ................................. 8,839,000
Total Investments--99.6% (Identified Cost
$238,224,715) (b) ........................... 300,095,447
Other assets less liabilities ................ 1,246,634
------------
Total Net Assets--100% ........................ $301,342,081
============
(a) See Note 1a.
(b) Federal Tax Information: At June 30, 1996 the net
unrealized appreciation on investments based on cost of
$238,224,715 for federal income tax purposes was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value over
tax cost ............................................... $ 63,812,684
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost
over value ............................................. (1,941,952)
------------
Net unrealized appreciation ............................ $ 61,870,732
============
(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 financial statements.
<PAGE>
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
- -----------------------------------------------------------------------------
June 30, 1996
(unaudited)
ASSETS
Investments at value .............................. $300,095,447
Cash .............................................. 512
Receivable for:
Fund shares sold ................................ 1,238,834
Securities sold ................................. 921,655
Dividends and interest .......................... 355,266
Foreign taxes ................................... 8,028
Prepaid registration expense ...................... 8,000
------------
302,627,742
LIABILITIES
Payable for:
Securities purchased ............................ $ 57,851
Fund shares redeemed ............................ 911,514
Accrued expenses:
Management fees ................................. 180,457
Deferred trustees' fees ......................... 57,217
Accounting and administrative ................... 3,513
Other expenses .................................. 75,109
--------
1,285,661
------------
NET ASSETS .......................................... $301,342,081
============
Net Assets consist of:
Capital paid in ................................. $213,919,631
Undistributed net investment income ............. 1,195,381
Accumulated net realized gains .................. 24,356,337
Unrealized appreciation on investments .......... 61,870,732
------------
NET ASSETS .......................................... $301,342,081
============
Computation of net asset value and offering price:
Net asset value and redemption price of Class A shares
($254,879,511 divided by 26,820,297 shares of
beneficial interest) .............................. $ 9.50
======
Offering price per share (100/94.25 of $9.50) ....... $10.08*
======
Net asset value and offering price of Class B shares
($35,653,626 divided by 3,800,717 shares of
beneficial interest) .............................. $ 9.38**
======
Net asset value and offering price of Class C shares
($2,087,878 divided by 222,778 shares of
beneficial interest) .............................. $ 9.37
======
Net asset value and offering price of Class Y shares
($8,721,066 divided by 920,532 shares of
beneficial interest) .............................. $ 9.47
======
Identified cost of investments ...................... $238,224,715
============
*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>
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- -----------------------------------------------------------------------------
Six Months Ended June 30, 1996
(unaudited)
INVESTMENT INCOME
Dividends ..................................... $ 3,030,238(a)
Interest ...................................... 107,133
-----------
3,137,371
Expenses
Management fees ............................. $1,062,518
Service fees--Class A ....................... 309,807
Service and distribution fees--Class B ...... 159,683
Service and distribution fees--Class C ...... 8,599
Trustees' fees and expenses ................. 12,053
Accounting and administrative ............... 25,736
Custodian ................................... 54,023
Transfer agent .............................. 302,448
Audit and tax services ...................... 23,000
Legal ....................................... 9,396
Printing .................................... 29,301
Registration ................................ 33,462
Miscellaneous ............................... 2,820
----------
Total expenses ................................ 2,032,846
-----------
Net investment income ......................... 1,104,525
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on Investments--net ............. 13,822,383
Unrealized appreciation on Investments--net ... 7,645,332
-----------
Net gain on investment transactions ........... 21,467,715
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ...... $22,572,240
===========
(a) Net of foreign taxes of: $49,929.
See accompanying notes to financial statements.
<PAGE>
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1995 1996
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income ............................. $ 2,841,943 $ 1,104,525
Net realized gain on investments .................. 31,424,701 13,822,383
Unrealized appreciation on investments ............ 33,283,879 7,645,332
------------ ------------
Increase in net assets from operations ............ 67,550,523 22,572,240
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income
Class A ......................................... (2,497,665) 0
Class B ......................................... (159,658) 0
Class C ......................................... (6,440) 0
Class Y ......................................... (86,275) 0
Net realized gain on investments
Class A ......................................... (18,292,636) 0
Class B ......................................... (1,952,478) 0
Class C ......................................... (53,531) 0
Class Y ......................................... (467,103) 0
------------ ------------
(23,515,786) 0
------------ ------------
Increase in net assets derived from capital share
transactions .................................... 24,206,907 1,828,185
------------ ------------
Total increase in net assets ...................... 68,241,644 24,400,425
NET ASSETS
Beginning of the period ........................... 208,700,012 276,941,656
------------ ------------
End of the period ................................. $276,941,656 $301,342,081
============ ============
(OVER)/UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ........................... $ (12,653) $ 91,904
============ ============
End of the period ................................. $ 91,904 $ 1,195,381
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------------
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------------------------------------------ JUNE 30,
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...... $ 5.44 $ 6.69 $ 7.28 $ 7.87 $ 7.27 $ 8.78
------ ------ ------ ------ ------ ------
Income From Investment Operations Net
Investment Income ........................ 0.13 0.09 0.07 0.08 0.10 0.04
Net Realized and Unrealized Gain (Loss)
on Investments ........................... 1.35 1.02 1.16 (0.19) 2.21 0.68
------ ------ ------ ------ ------ ------
Total From Investment Operations ........... 1.48 1.11 1.23 (0.11) 2.31 0.72
------ ------ ------ ------ ------ ------
Less Distributions Dividends From Net
Investment Income ........................ (0.13) (0.09) (0.07) (0.08) (0.09) 0.00
Distributions From Net Realized Capital
Gains .................................... (0.10) (0.43) (0.57) (0.41) (0.71) 0.00
------ ------ ------ ------ ------ ------
Total Distributions ........................ (0.23) (0.52) (0.64) (0.49) (0.80) 0.00
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ............. $ 6.69 $ 7.28 $ 7.87 $ 7.27 $ 8.78 $ 9.50
====== ====== ====== ====== ====== ======
Total Return (%) (b) ....................... 27.1 16.6 17.0 (1.4) 32.3 8.2
Ratio of Operating Expenses to Average Net
Assets (%) ............................... 1.28 1.32 1.34 1.37 1.37 1.32(a)
Ratio of Net Investment Income to Average
Net Assets (%) ........................... 1.84 1.26 0.83 1.00 1.22 0.84(a)
Portfolio Turnover Rate (%) ................ 51 38 40 29 52 60(a)
Average Commission Rate (c) ................ -- -- -- -- -- $0.0523
Net Assets, End of Period (000) ............ $145,790 $156,240 $189,779 $190,869 $241,038 $254,880
(a) Computed on an annualized basis.
(b) A sales charge is not reflected in total return calculations. Periods less
than one year are not annualized.
(c) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades upon
which commissions are charged. This rate generally does not reflect mark-
ups, mark-downs, or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- continued
- --------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------
SEPTEMBER 13(A) YEAR YEAR SIX MONTHS
THROUGH ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30,
1993 1994 1995 1996
--------------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ......................... $ 7.97 $ 7.85 $ 7.23 $ 8.70
------ ------ ------ ------
Income From Investment Operations
Net Investment Income ........................................ 0.11 0.04 0.05 0.01
Net Realized and Unrealized Gain (Loss) on Investments ....... 0.39 (0.20) 2.18 0.67
------ ------ ------ ------
Total From Investment Operations ............................. 0.50 (0.16) 2.23 0.68
------ ------ ------ ------
Less Distributions
Dividends From Net Investment Income ......................... (0.05) (0.05) (0.05) 0.00
Distributions From Net Realized Capital Gains ................ (0.57) (0.41) (0.71) 0.00
------ ------ ------ ------
Total Distributions .......................................... (0.62) (0.46) (0.76) 0.00
------ ------ ------ ------
Net Asset Value, End of Period ............................... $ 7.85 $ 7.23 $ 8.70 $ 9.38
====== ====== ====== ======
Total Return (%) (c) ......................................... 6.5 (2.0) 31.3 7.8
Ratio of Operating Expenses to Average Net Assets (%) ........ 2.16(b) 2.12 2.12 2.07(b)
Ratio of Net Investment Income to Average Net Assets (%) ..... 0.05(b) 0.25 0.47 0.09(b)
Portfolio Turnover Rate (%) .................................. 40 29 52 60(b)
Average Commission Rate (d) .................................. -- -- -- $0.0523
Net Assets, End of Period (000) .............................. $2,182 $13,830 $27,941 $35,654
(a) Commencement of operations.
(b) Computed on an annualized basis.
(c) A contingent deferred sales charge is not reflected in total return
calculations. Periods less than one year are not annualized.
(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 upon
which commissions are charged. This rate generally does not reflect mark-
ups, mark-downs, or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- continued
- --------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
CLASS C CLASS Y
------------------------- ----------------------------------------
YEAR SIX MONTHS MARCH 31(A) YEAR SIX MONTHS
ENDED ENDED THROUGH ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1994 1995 1996
------------ ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..................... $ 7.23 $ 8.70 $ 7.57 $ 7.24 $ 8.75
------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income..................................... 0.05 0.02 0.10 0.12 0.05
Net Realized and Unrealized Gain (Loss) on
Investments ............................................ 2.18 0.65 0.08 2.21 0.67
------ ------ ------ ------ ------
Total From Investment Operations ......................... 2.23 0.67 0.18 2.33 0.72
------ ------ ------ ------ ------
Less Distributions
Dividends From Net Investment Income ..................... (0.05) 0.00 (0.10) (0.11) 0.00
Distributions From Net Realized Capital Gains ............ (0.71) 0.00 (0.41) (0.71) 0.00
------ ------ ------ ------ ------
Total Distributions ...................................... (0.76) 0.00 (0.51) (0.82) 0.00
------ ------ ------ ------ ------
Net Asset Value, End of Period ........................... $ 8.70 $ 9.37 $ 7.24 $ 8.75 $ 9.47
====== ====== ====== ====== ======
Total Return(%)(c) ....................................... 31.3 7.7 2.4 32.8 8.2
Ratio of Operating Expenses to Average Net Assets(%) ..... 2.12 2.07(b) 1.54(b) 1.12 1.07(b)
Ratio of Net Investment Income to Average Net Assets(%) .. 0.47 0.09(b) 1.05(b) 1.47 1.09(b)
Portfolio Turnover Rate(%) ............................... 52 60(b) 29 52 60(b)
Average Commission Rate(d) ............................... -- $0.0523 -- -- $0.0523
Net Assets, End of Period (000) .......................... $1,224 $2,088 $4,001 $6,738 $8,721
(a) Commencement of operations.
(b) Computed on an annualized basis.
(c) Periods less than one year are not 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 upon
which commissions are charged. This rate generally does not reflect mark-
ups, mark-downs, or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
June 30, 1996
(unaudited)
1. The Fund is a Series of New England Funds Trust I, 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, Class C and Class Y shares. The Fund
commenced its public offering of Class B shares on September 13, 1993, of
Class C shares on December 30, 1994 and of its Class Y shares on March 31,
1994. 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 class of shares, but they do pay a higher
ongoing distribution fee than Class A shares. Class Y shares do not pay a
front end sales charge, a contingent deferred sales charge or distribution
fee. They are intended for institutional investors with a minimum of
$1,000,000 to invest. 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 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. 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.
A. SECURITY VALUATION. Equity securities are valued on the basis of
valuations furnished by a pricing service, authorized by the Board of
Trustees, which service 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.
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 and interest income is
recorded on the accrual basis. Interest income for the Fund is increased by
the accretion of discount. In determining net gain or loss on securities sold,
the cost of securities has been determined on the identified cost basis.
C. 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.
D. 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. Permanent book and tax basis differences will result in
reclassification to the capital accounts.
E. 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. The Fund's subadviser 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 Fund's ability to dispose of the underlying securities.
2. PURCHASES AND SALES OF SECURITIES (excluding short-term investments) for
the Fund for six months ended June 30, 1996 were $86,097,908 and $88,504,189,
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 0.75% of the first $200 million of the Fund's
average daily net assets, 0.70% of the next $300 million and 0.65% of such
assets in excess of $500 million. NEFM pays the Fund's investment subadviser,
Loomis Sayles & Company, L.P. at the rate of 0.535% of the first $200 million
of the Fund's averge daily net assets, 0.350% of the next $300 million and
0.300% of such assets in excess of $500 million. Certain officers and
directors of NEFM and Loomis Sayles & Company, L.P. are also officers or
trustees of the Fund. NEFM and Loomis Sayles & Company, L.P. are wholly owned
subsidiaries of New England Investment Companies, L.P. ("NEIC") which is a
subsidiary of New England Mutual Life Insurance Company. Fees earned by NEFM
and Loomis Sayles & Company, L.P. under the management agreement in effect
during the six months ended June 30, 1996 are as follows:
FEES EARNED
-----------
$372,135 New England Funds Management, L.P.
$690,383 Loomis Sayles & Company, L.P.
B. ACCOUNTING AND ADMINISTRATIVE EXPENSE. New England Funds, L.P. ("New
England Funds"), the Fund's distributor, is a wholly owned subsidiary of NEIC
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 six months ended June 30, 1996 these expenses
amounted to $25,736 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 six months ended June 30, 1996, the Fund
paid New England Funds $228,297 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 six
months ended June 30, 1996, the Fund paid New England Funds $309,807 in fees
under the Class A Plan. If the expenses of New England Funds that are
otherwise reimbursable under the Class A Plan incurred in any year exceed the
amounts payable by the Fund under the Class A Plan, the unreimbursed amount
(together with unreimbursed amounts from prior years) may be carried forward
for reimbursement in future years in which the Class A Plan remains in effect.
The amount of unreimbursed expenses carried forward at June 30, 1996 is
$1,651,994.
Under the Class B and Class C 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 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 and Class C
shares and/or the maintenance of shareholder accounts. For the six months
ended June 30, 1996, the Fund paid New England Funds $39,921 and $2,150 in
service fees under the Class B and Class C plans, respectively.
Also under the Class B and Class C Plans, 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 six months ended June 30, 1996, the Fund paid New
England Funds $119,762 and $6,449 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 six months
ended June 30, 1996 amounted to $374,933.
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 Loomis Sayles & Company, L.P., New England Funds, NEIC or their affiliates,
other than registered investment companies. Each other trustee is compensated
by the Fund as follows:
Annual Retainer $2,255
Meeting Fee $114/meeting
Committee Meeting Fee $68/meeting
Committee Chairman Retainer $131/year
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 had, had it been invested in the
Fund on the normal payment date.
4. CAPITAL SHARES. At June 30, 1996 there was an unlimited number of shares
of beneficial interest authorized, divided into four classes, Class A, Class
B, Class C and Class Y capital stock. Transactions in capital shares were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1995 JUNE 30, 1996
-------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS A -------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Shares sold .......................................... 3,546,403 $29,882,286 1,884,549 $17,392,355
Shares issued in connection with the reinvestment of:
Dividends from net investment income ............... 283,157 2,443,644 0 0
Distributions from net realized gain ............... 2,099,871 18,018,417 0 0
--------- ----------- --------- -----------
5,929,431 50,344,347 1,884,549 17,392,355
Shares repurchased ................................... (4,749,976) (39,580,212) (2,504,084) (23,041,825)
--------- ----------- --------- -----------
Net increase (decrease) .............................. 1,179,455 10,764,135 (619,535) (5,649,470)
--------- ----------- --------- -----------
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1995 JUNE 30, 1996
-------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS B -------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Shares sold ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 1,279,784 $10,347,316 822,393 $ 7,510,769
Shares issued in connection with the reinvestment of:
Dividends from net investment income ............... 16,925 144,710 0 0
Distributions from net realized gain ............... 219,538 1,861,128 0 0
--------- ----------- --------- -----------
1,516,247 12,353,154 822,393 7,510,769
Shares repurchased ................................... (218,772) (1,820,967) (233,050) (2,135,224)
--------- ----------- --------- -----------
Net increase ......................................... 1,297,475 10,532,187 589,343 5,375,545
--------- ----------- --------- -----------
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1995 JUNE 30, 1996
-------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS C -------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Shares sold .......................................... 149,041 1,267,129 106,113 963,156
Shares issued in connection with the reinvestment of:
Dividends from net investment income ............... 678 5,797 0 0
Distributions from net realized gain ............... 5,998 50,896 0 0
--------- ----------- --------- -----------
155,717 1,323,822 106,113 963,156
Shares repurchased ................................... (15,036) (131,777) (24,016) (219,395)
--------- ----------- --------- -----------
Net increase ......................................... 140,681 1,192,045 82,097 743,761
--------- ----------- --------- -----------
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1995 JUNE 30, 1996
-------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS Y -------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Shares sold .......................................... 370,103 2,990,140 207,405 1,890,387
Shares issued in connection with the reinvestment of:
Dividends from net investment income ............... 10,044 86,275 0 0
Distributions from net realized gain ............... 54,580 467,103 0 0
--------- ----------- --------- -----------
434,727 3,543,518 207,405 1,890,387
Shares repurchased .,,,,,,,,,,,,,,,,,,,,,,,,,,,....... (216,496) (1,824,978) (57,304) (532,038)
--------- ----------- --------- -----------
Net increase ......................................... 218,231 1,718,540 150,101 1,358,349
--------- ----------- --------- -----------
Increase derived from capital share transactions ..... 2,835,842 $24,206,907 202,006 $ 1,828,185
========= =========== ========= ===========
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
REGULAR INVESTING PAYS
- --------------------------------------------------------------------------------
FIVE GOOD REASONS TO INVEST REGULARLY
1. It's an easy way to build assets
2. It's convenient and effortless
3. It requires a low minimum to get started
4. It can help you reach important long-term goals like
retirememt or college funding
5. It can help you benefit from the ups and downs of the market
With Investment Builder, New England Funds' automatic investment program, you
can invest as little as $50 a month in your New England Fund automatically --
without even writing a check. And, as you can see from the chart below, your
monthly investments can really add up over time.
THE POWER OF MONTHLY INVESTING
[A line graph appears here, illustrating the hypothetical accumulation of
monthly investments at an 8% annual rate of return. The data points of the
graph are as follows:]
Monthly investments of $50
Years Growth of Monthly Investments
0 $0
5 $3,661
10 $9,040
15 $16,943
20 $28,555
25 $45,618
Monthly investments of $100
Years Growth of Monthly Investments
0 $0
5 $7,322
10 $18,079
15 $33,886
20 $57,111
25 $91,236
Monthly investments of $200
Years Growth of Monthly Investments
0 $0
5 $14,643
10 $36,158
15 $67,772
20 $114,222
25 $182,472
Monthly investments of $500
Years Growth of Monthly Investments
0 $0
5 $36,608
10 $90,396
15 $169,429
20 $285,555
25 $456,181
For illustrative purposes only. These figures represent hypothetical
accumulation at an 8% annual rate of return, and are not indicative of future
performance of any New England Fund. The value of a New England Fund will
fluctuate with changing market conditions.
This program cannot assure a profit nor protect against a loss in a declining
market. It does, however, ensure that you buy more shares when the price is low
and fewer shares when the price is high.
You can start an Investment Builder program with your current New England Fund
account, or with any of our other funds. To open an Investment Builder account
today, call your financial representative or New England Funds at
1-800-225-5478.
<PAGE>
- -----------------------------------------------------------------------------
NEW ENGLAND FUNDS
- -----------------------------------------------------------------------------
STOCK FUNDS
Growth Fund
Star Advisers Fund
Capital Growth Fund
Value Fund
Growth Opportunities Fund
Balanced Fund
INTERNATIONAL STOCK FUNDS
Growth Fund of Israel
International Equity Fund
Star Worldwide Fund
BOND FUNDS
High Income Fund
Strategic Income Fund
Government Securities Fund
Bond Income Fund
Limited Term U.S. Government Fund
Adjustable Rate U.S. Government Fund
TAX EXEMPT FUNDS
Municipal Income Fund
Massachusetts Tax Free Income Fund
Intermediate Term Tax Free Fund of California
Intermediate Term Tax Free Fund of New York
MONEY MARKET FUNDS
Cash Management Trust
-- Money Market Series
-- U.S. Government Series
Tax Exempt Money Market Trust
To learn more, and for a free prospectus,
contact your financial representative.
VISIT OUR WORLD WIDE WEB SITE AT HTTP://WWW.MUTUALFUNDS.COM
New England Funds, L.P.
399 Boylston Street
Boston, MA 02116
Toll Free 800-225-5478
This material is authorized for distribution to prospective investors when it is
preceded or accompanied by the Fund's current prospectus, which contains
information about distribution charges, management and other items of interest.
Investors are advised to read the prospectus carefully before investing.
<PAGE>
[LOGO] --------------
NEW ENGLAND FUNDS BULK RATE
Where The Best Minds Meet(TM) U.S. POSTAGE
PAID
BROCKTON, MA
PERMIT NO. 770
--------------
- ---------------------
399 Boylston Street
Boston, Massachusetts
02116
- ---------------------
[LOGO: DALBAR SEAL]
VL58-0896
[symbol] Printed on Recycled Paper
