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NEW ENGLAND INTERNATIONAL EQUITY FUND
Supplement dated January 31, 1997 to Prospectuses dated May 1, 1996
(as supplemented September 30, 1996 and January 2, 1997)
of New England Stock Funds
and New England Stock Funds Class Y
On January 31, 1997, the Board of Trustees of New England Funds Trust I (the
"Trust") approved a Subadvisory Agreement (the "Agreement") relating to New
England International Equity Fund (the "Fund") between New England Funds
Management, L.P. ("NEFM"), the Fund's adviser, and Loomis, Sayles & Company,
L.P. ("Loomis Sayles"). Under the Agreement, Loomis Sayles will be the Fund's
subadviser, succeeding Draycott Partners, Ltd., and will be responsible for
day-to-day management of the Fund's investment operations under the oversight of
NEFM. The Agreement is subject to the approval of the Fund's shareholders.
Pursuant to a rule of the Securities and Exchange Commission, which under
certain circumstances allows such agreements to take effect, and to remain in
effect for up to 120 days, without receiving prior shareholder approval, the
Agreement will be effective at the close of business on February 14, 1997. A
special shareholder meeting will be held in early April to vote upon the
approval of the Agreement, and a notice of such meeting and a proxy statement
will be sent to shareholders in mid-February. In the event that the Fund's
shareholders do not approve the Agreement at the special shareholder meeting,
then the Trust's Board of Trustees will convene a special meeting of trustees to
consider alternative arrangements for the management of the Fund's investment
portfolio.
The annual management fee rate payable by the Fund to NEFM will remain at 0.90%
of the first $200 million of the Fund's average daily net assets, 0.85% of such
assets between $200 million and $500 million and 0.80% of such assets in excess
of $500 million. The subadvisory fees payable by NEFM to Loomis Sayles under the
Agreement will be at the annual rate of 0.40% of the first $200 million of the
Fund's average daily net assets and 0.35% of such assets in excess of $200
million. NEFM has agreed, until further notice to the Fund, to continue to
voluntarily reduce its management fees and, when necessary, bear certain
expenses in order to limit the Fund's expenses to an annual rate of 1.75%,
2.50%, 2.50% and 1.15% of the average daily net assets of the Fund's Class A, B,
C and Y shares, respectively. In addition, Loomis Sayles has agreed to waive its
entire subadvisory fee payable to Loomis Sayles by NEFM under the Agreement
through February 14, 1998. This waiver by Loomis Sayles will benefit NEFM, and
will not reduce the management fee payable by the Fund to NEFM.
Paul Drexler, Vice President of Loomis Sayles, will serve as the Fund's
portfolio manager. Mr. Drexler has 21 years of investment experience, and served
as a Deputy Manager at Brown Brothers Harriman & Co. prior to joining Loomis
Sayles in 1993.
On January 31, 1997, the Board of Trustees approved amendments to the Fund's
investment strategies, which will be effective at the close of business on
February 14, 1997. Accordingly, the two paragraphs under the heading "Fund
Investments - International Equity Fund" in the Investment Strategy section of
each prospectus are revised as of such date to read as follows:
The International Equity Fund seeks to achieve its objective by investing
primarily in common stocks, although the Fund may invest in any type of
equity securities. Normally the Fund will invest at least 65% of its total
assets in equity securities of issuers headquartered outside the United
States or that derive a substantial part of their revenues or profits from
countries outside the United States. Under normal conditions the Fund's
portfolio will contain equity securities of issuers from at least three
countries outside the United States. The Fund may also invest in closed-end
investment companies domiciled in the United States that invest primarily
in securities issued by foreign companies. In addition, the Fund may invest
up to 20% of its assets in bonds issued or guaranteed by foreign
governments (including their political subdivisions, agencies, authorities
and/or instrumentalities), issued by supranational agencies or issued by
foreign companies, including but not limited to convertible debt and below
investment grade or unrated debt. The Fund may also engage in certain
options and futures transactions.
The Fund's subadviser will make investment decisions on behalf of the Fund
by, first, selecting a group of attractively valued countries. Within the
selected countries, the subadviser will select securities that are expected
to offer the best value based on its valuation and earnings growth
expectations.
