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Supplement dated October 30, 1998 to New
England Star Funds Prospectus dated May 1, 1998 and New England
Stock Funds Class Y Prospectus dated May 1, 1998
NEW ENGLAND STAR SMALL CAP FUND
(effective October 30, 1998)
CHANGE IN INVESTMENT POLICY
On October 30, 1998 the Board of Directors of New England Funds Trust I approved
a change in the Star Small Cap Fund's investment policies. Accordingly, the
first sentence under the heading "New England Star Small Cap Fund" in the
section entitled "Investment Strategy- Fund Investments and Subadvisers'
Investment Styles" (in the New England Star Funds Prospectus) and in the section
entitled "Investment Strategy - Fund Investments" (in New England Stock Fund
Class Y Prospectus) is revised to read as follows:
The Star Small Cap Fund seeks to attain its objective of capital
appreciation by investing primarily in equity securities of small
capitalization companies, which the Fund currently considers to be
companies having total market capitalization (shares outstanding times
market price per share), at the time of purchase, no greater than the stock
with the largest capitalization of the stocks making up the Russell 2000
Index ("Small Cap Companies").
Furthermore, under the same heading, the third sentence of the paragraph which
begins "Loomis Sayles..." is revised to read as follows:
Most of these companies will have market capitalizations that fall within
the range of the market capitalization of the Russell 2000 Index at the
time of initial purchase.
NEW ENGLAND STAR ADVISERS FUND
CHANGE IN PORTFOLIO MANAGER
The following supplements the paragraph entitled "Founders" in the "Fund
Management" section of each Prospectus:
Effective August 21, 1998, the Founders large/mid-cap investment management
team, under the interim leadership of Paul LaRocco, has replaced Edward F. Keely
as portfolio manager of the Founders' segment of the Star Advisers Fund. Mr.
LaRocco, Vice President of Investments of Founders, is a Chartered Financial
Analyst and is also the interim leader of the team managing the Founders Growth
Fund. Mr. LaRocco has been serving as the lead portfolio manager for the
Founders Special Fund since March 1998 and as a portfolio manager for The
Dreyfus Corporation since April 1998. Prior to joining Founders in 1998, Mr.
LaRocco was a vice president and portfolio manager with Oppenheimer Funds.
CHANGE IN SUBADVISORY FEE
The following supplements the disclosure found in the paragraph in the "Fund
Management" section of the Prospectus describing subadvisory fees paid by NEFM
to Janus Capital Corporation ("Janus Capital"):
For the Star Advisers Fund, NEFM pays Janus Capital a subadvisory fee
at the annual rate of 0.55% of the first $50 million of the average
daily net assets of the segment of the Fund that Janus Capital manages
and 0.50% of such assets in excess of $50 million.
NEW ENGLAND STAR WORLDWIDE FUND
(effective August 3, 1998)
CHANGE IN PORTFOLIO MANAGERS
Oscar Castro and John Boich of Montgomery have assumed day-to-day responsibility
for the management of the Montgomery segment of the New England Star Worldwide
Fund. Messrs. Castro and Boich are each a Senior Portfolio Manager and Principal
of Montgomery and each has been employed by Montgomery since 1993. They have
co-managed Montgomery's Global Opportunities Fund since its inception on
September 30, 1993.
CHANGE IN INVESTMENT STRATEGY
The paragraph regarding Montgomery in the "Fund Investments - Star Worldwide
Fund" section of the Prospectus is revised to read as follows:
Montgomery Asset Management, LLC ("Montgomery") normally will invest at
least 65% of its segment of the Fund's portfolio in equity securities
of companies, which may be of any size, throughout the world. The
segment of the Fund managed by Montgomery emphasizes common stocks, but
may also invest up to 35% of its segment in debt securities, including
up to 5% in debt securities rated below investment grade. Montgomery
may invest its segment of the Fund in securities denominated in one or
more foreign currencies.
Montgomery invests in companies that it believes have potential for
above-average growth in sales and earnings on a sustained basis and
that are reasonably priced. A number of factors are considered in
evaluating potential investments, including a company's per share sales
and earnings growth; return on capital; balance sheet; financial and
accounting policies; overall financial strength; industry sector;
competitive advantages; and quality of management.
Messrs. Castro and Boich have reviewed the portfolio holdings of the Montgomery
segment of the Fund and expect that it will take approximately 2 to 3 months to
reposition the Montgomery segment's portfolio holdings to match the new
investment strategy as set forth above.
REDUCTION IN SUBADVISORY FEE
The subadvisory fees payable by NEFM to Montgomery are now at the annual rate
of:
0.85% of the first $25 million of the average daily net assets of the
segment of the Fund that Montgomery manages, 0.65% of the next $25
million of such assets, and 0.55% of such assets in excess of $50
million.
This change in subadvisory fees paid by NEFM does not affect the management fee
paid by the Fund.
SP81-1098
