<PAGE>
Supplement dated February 12, 1999, 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
CHANGE IN PORTFOLIO MANAGER
The following supplements the paragraph entitled "Montgomery" in the "Fund
Management" section of each prospectus:
Effective March 1, 1999, Kathryn Peters replaces Andrew Pratt as the
portfolio manager of the Montgomery segment of the Fund. Ms. Peters, Vice
President of Montgomery, joined the firm in 1995. Prior to 1995 she was an
associate in the investment banking division of Donaldson, Lufkin &
Jenrette in New York.
CHANGE IN CONTROL
Effective February 12, 1999, the following supplements the paragraph entitled
"Robertson Stephens" in the "Fund Management" section of each Prospectus:
Members of senior management of Robertson Stephens have agreed to purchase
Robertson Stephens Investment Management Co. Inc., Robertson Stephens's
parent company, from BankAmerica Corporation, in a transaction expected to
be completed in March 1999. Robertson Stephens will continue to serve as a
subadviser to the Star Small Cap Fund following the transaction, and it is
expected that John L. Wallace and John Seabern will continue to serve as
co-managers of Robertson Stephens segment of the Fund. The trustees of the
New England Funds Trust I approved the continuation of the Star Small Cap
Fund's current arrangements with Robertson Stephens following the
consummation of the transaction.
NEW ENGLAND STAR ADVISERS FUND
CHANGE IN PORTFOLIO MANAGERS
The following supplements the paragraph entitled "Founders" in the "Fund
Management" section of each Prospectus:
Effective January 1999, the Founders segment of the Star Advisers Fund is
managed by Scott A. Chapman and Thomas M. Arrington. Mr. Chapman and Mr.
Arrington have been Vice Presidents of Investments at Founders since
December 1998. Prior to joining Founders, Mr. Chapman was Vice President
and Director of Growth Strategy and Mr. Arrington served as Vice President
and Director of Income Equity Strategy at HighMark Capital Management.
<PAGE>
Supplement dated February 12, 1999, superseding the 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
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.
CHANGE IN PORTFOLIO MANAGER
The following supplements the paragraph entitled "Montgomery" in the "Fund
Management" section of each prospectus:
Effective March 1, 1999, Kathryn Peters replaces Andrew Pratt as the
portfolio manager of the Montgomery segment of the Fund. Ms. Peters, Vice
President of Montgomery, joined the firm in 1995. Prior to 1995 she was an
associate in the investment banking division of Donaldson, Lufkin &
Jenrette in New York.
CHANGE IN CONTROL
Effective February 12, 1999, the following supplements the paragraph entitled
"Robertson Stephens" in the "Fund Management" section of each Prospectus:
Members of senior management of Robertson Stephens have agreed to purchase
Robertson Stephens Investment Management Co. Inc., Robertson Stephens's
parent company, from BankAmerica Corporation, in a transaction expected to
be completed in March 1999. Robertson Stephens will continue to serve as a
subadviser to the Star Small Cap Fund following the transaction, and it is
expected that John L. Wallace and John Seabern will continue to serve as
co-managers of Robertson Stephens segment of the Fund. The trustees of the
New England Funds Trust I approved the continuation of the Star Small Cap
Fund's current arrangements with Robertson Stephens following the
consummation of the transaction.
(Over)
<PAGE>
NEW ENGLAND STAR ADVISERS FUND
CHANGE IN PORTFOLIO MANAGERS
The following supplements the paragraph entitled "Founders" in the "Fund
Management" section of each Prospectus:
Effective January 1999, the Founders segment of the Star Advisers Fund is
managed by Scott A. Chapman and Thomas M. Arrington. Mr. Chapman and Mr.
Arrington have been Vice Presidents of Investments at Founders since
December 1998. Prior to joining Founders, Mr. Chapman was Vice President
and Director of Growth Strategy and Mr. Arrington served as Vice President
and Director of Income Equity Strategy at HighMark Capital Management.
CHANGE IN SUBADVISORY FEE
Effective August 3, 1998, 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
(the following became 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 as 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 a 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.
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.
<PAGE>
NEW ENGLAND GOVERNMENT SECURITIES FUND
AND
NEW ENGLAND LIMITED TERM U.S. GOVERNMENT FUND
Supplement dated February 12, 1999 to
New England Bond Funds Class A, B and C shares and Class Y shares
Prospectuses dated May 1, 1998
The following supplements the third paragraph in the "Fund Management" section
of each Prospectus:
Effective immediately, Joel A. Damiani acts as lead portfolio manager and Scott
A. Millimet acts as co-portfolio manager of the Government Securities Fund, and
Mr. Millimet acts as lead portfolio manager and Mr. Damiani acts as co-portfolio
manager of the Limited Term U.S. Government Fund.
<PAGE>
Supplement dated February 12, 1999
to the New England Stock Funds Class A, B and C shares and
Class Y shares Prospectuses dated May 1, 1998
FOR NEW ENGLAND EQUITY INCOME FUND
The following supplements the second paragraph in the "Fund Management" section
of each Prospectus: Effective immediately, Peter Ramsden and Tom Kolefas act as
portfolio managers of the Equity Income Fund.
FOR NEW ENGLAND VALUE FUND
AND
NEW ENGLAND BALANCED FUND
The following supplements the "Fund Management" section of each Prospectus:
Effective August 1998, Jeffrey Wardlow and Lauriann Kloppenburg have assumed
responsibility for the day-to-day management of the Value Fund. Also effective
August 1998, Jeffrey Wardlow and Gregg Watkins have assumed responsibility for
the day-to-day management of the equity portion of the Balanced Fund and the
responsibility for allocating the assets of the Balanced Fund between equity and
fixed-income securities. The day-to-day management of the fixed-income portion
of the Balanced Fund remains the same. Mr. Wardlow, Vice President of Loomis
Sayles, has managed the Loomis Sayles Core Value Fund since its inception in May
1991. Ms. Kloppenburg, Vice President and Director of Equity Research of Loomis
Sayles, has been employed by Loomis Sayles for more than five years. Mr.
Watkins, Vice President of Loomis Sayles, is also a portfolio manager of the
Loomis Sayles Mid-Cap Value Fund and has been employed by Loomis Sayles for more
than five years.
FOR NEW ENGLAND GROWTH FUND
Effective September 1, 1998, New England Growth Fund offers Class C shares to
the general public in addition to Class A and Class B shares. Therefore, the
following tables supplement "Annual fund operating expenses" and "Example" in
the "Schedule of Fees" section:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
-------------------------------------------------------------------
NEW ENGLAND GROWTH FUND
CLASS C
Management Fees 0.67%
12b-1 Fees 1.00%*
Other Expenses 0.20%
Total Fund Operating Expenses 1.87%
-------------------------------------------------------------------
*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.
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 may be more or less than
those shown.
-----------------------------------------------------
NEW ENGLAND GROWTH FUND
CLASS C
(1) (2)
1 year $29 $19
3 years $59 $59
5 years $101 $101
10 years $219 $219
-----------------------------------------------------
(1) Assumes redemption at end of period.
(2) Assumes no redemption at end of period.
<PAGE>
Supplement dated February 12, 1999 to
New England Funds
Statement of Additional Information - Part II dated May 1, 1998
THE SECTION ENTITLED "STANDARD PERFORMANCE MEASURES - PERFORMANCE COMPARISONS"
IS AMENDED TO INCLUDE THE FOLLOWING INFORMATION:
The Standard & Poor's Composite Index of 400 Stocks (the "S&P 400") is
a market capitalization-weighted and unmanaged index that includes approximately
10% of the capitalization of U.S. equity securities. This index is comprised of
stocks in the middle capitalization range. Any midcap stocks already included in
the S&P 500 are excluded from this index.
The Lehman Aggregate Bond Index is a market capitalization-weighted
aggregate index that includes nearly all debt issued by the U.S. Treasury, U.S.
Government agencies, U.S. corporations rated investment grade, and U.S. agency
debt backed by mortgage pools.
The Lehman Intermediate Government Bond Index (the "Lehman Int.
Government Index") is a market capitalization-weighted and unmanaged index of
bonds issued by the U.S. Government and its agencies having maturities between
one and ten years.
The Lehman Intermediate Government/Corporate Bond Index (the "Lehman
Int. G/C Index") is a market capitalization-weighted and unmanaged index
composed of the Lehman Government and Corporate Bond indices which include bonds
with maturities of up to ten years.
The Lehman High Yield Bond Index is a market capitalization-weighted,
unmanaged index of fixed-rate, noninvestment grade debt. Generally securities in
the index must be rated Ba1 or lower by Moody's, including defaulted issues. If
no Moody's rating is available, bonds must be rated BB+ or lower by S&P; and if
no S&P rating is available, bonds must be rated below investment grade by Fitch
Investor's Service. A small number of unrated bonds is included in the index; to
be eligible they must have previously held a high yield rating or have been
associated with a high yield issuer, and must trade accordingly.
The Lehman: Mutual Fund Short (1-5) Investment Grade Debt Index is an
unmanaged index composed of all publicly issued, fixed-rate, nonconvertible
investment grade domestic corporate debt with maturities of one to five years.
The Russell 3000 Index is a market capitalization-weighted index which
comprises 3,000 of the largest capitalized U.S. companies whose common stock is
traded in the United States on the NYSE, the American Stock Exchange and NASDAQ.
The Russell 2000 Index represents the smallest 2,000 companies within the
Russell 3000 Index as measured by market capitalization. The Russell 1000 Index
represents the largest 1,000 companies within the Russell 3000 Index. The
Russell 1000 Growth Index is an unmanaged subset of stocks from the larger
Russell 1000 Index, selected for their greater growth orientation. The Russell
1000 Value Index is an unmanaged subset of stocks from the larger Russell 1000
Index, selected for their greater value orientation.
The Morgan Stanley Capital International World ND Index (the "MSCI
World Index") is a market-capitalization weighted and unmanaged index that
includes common stock from all 23 MSCI developed market countries. The "ND"
indicates that the index is listed in U.S. dollars, with net dividends
reinvested.
