<PAGE>
NEW ENGLAND STAR ADVISERS FUND
NEW ENGLAND STAR WORLDWIDE FUND
NEW ENGLAND STAR SMALL CAP FUND
Supplement dated December 13, 1999 to New England Star Funds Class A, B, and C
Prospectus dated May 3, 1999 (revised November 15, 1999), New England Stock and
Star Funds Class Y Prospectus dated May 3, 1999 and the Statement of Additional
Information dated May 3, 1999 of each of the listed funds.
Effective February 1, 2000, New England Funds will implement an organizational
name change to Nvest Funds affecting various related entities. As a result,
references in the Prospectuses and Statements of Additional Information are
changed as set forth below:
o The Distributor, New England Funds, L.P., changes its name to Nvest Funds
Distributor, L.P.
o The Investment Adviser, New England Funds Management, (all funds except New
------
England Growth Fund) changes its name to Nvest Funds Management, L.P.
o The New England Funds change to the Nvest Funds
o The General Partner, NEF Corporation, changes its name to Nvest Distribution
Corp.
o The Web site name, www.mutualfunds.com, changes to www.nvestfunds.com
o Each Trust and Fund changes its name to utilize Nvest in place of New England
as listed below:
<TABLE>
<CAPTION>
ENTITY OLD NAME NEW NAME
<S> <C> <C>
Trusts New England Funds Trust I Nvest Funds Trust I
New England Funds Trust II Nvest Funds Trust II
New England Funds Trust III Nvest Funds Trust III
New England Cash Management Trust Nvest Cash Management Trust
New England Tax Exempt Money Market Trust Nvest Tax Exempt Money Market Trust
Funds New England Growth Fund Nvest Growth Fund
New England Capital Growth Fund Nvest Capital Growth Fund
New England Growth and Income Fund Nvest Growth and Income Fund
New England Equity Income Fund Nvest Equity Income Fund
New England Bullseye Fund Nvest Bullseye Fund
New England Balanced Fund Nvest Balanced Fund
New England Value Fund Nvest Value Fund
New England International Equity Fund Nvest International Equity Fund
New England Star Advisers Fund Nvest Star Advisers Fund
New England Star Worldwide Fund Nvest Star Worldwide Fund
New England Star Small Cap Fund Nvest Star Small Cap Fund
New England Bond Income Fund Nvest Bond Income Fund
New England High Income Fund Nvest High Income Fund
New England Government Securities Fund Nvest Government Securities Fund
New England Limited Term U.S. Government Fund Nvest Limited Term U.S. Government Fund
New England Strategic Income Fund Nvest Strategic Income Fund
New England Short Term Corporate Income Fund Nvest Short Term Corporate Income Fund
New England Municipal Income Fund Nvest Municipal Income Fund
New England Massachusetts Tax Free Income Fund Nvest Massachusetts Tax Free Income Fund
New England Intermediate Term Tax Free Fund of California Nvest Intermediate Term Tax Free Fund of California
New England Cash Management Trust -- Money Market Series Nvest Cash Management Trust -- Money Market Series
New England Tax Exempt Money Market Trust Nvest Tax Exempt Money Market Trust
</TABLE>
(Please turn to the reverse side)
<PAGE>
NEW ENGLAND STAR ADVISERS FUND
The segment of the New England Star Advisers Fund managed by Loomis Sayles has
changed its market capitalization range from those companies constituting the
Russell 2000 Index to those in the Russell 2500 Index. Accordingly, all
references to the Russell 2000 in the subsection entitled "Loomis Sayles" within
the section entitled "Star Advisers Fund - More on Investment Strategies" are
changed to the Russell 2500.
NEW ENGLAND STAR SMALL CAP FUND
New England Star Small Cap Fund is co-managed by Steven J. Reid and James P.
Benson. Mr. Reid's background is described in the Prospectus under the section
entitled "Meet the Funds' Portfolio Managers -- Star Small Cap Fund." Mr.
Benson's experience is added to the same section as follows:
JAMES P. BENSON
Mr. Benson has served as co-manager of the Harris Associates
segment of the Star Small Cap Fund since November 23, 1999. Mr. Benson joined
Harris Associates in 1997 as an investment analyst. Prior to joining Harris, he
served as an executive vice president and director of equity research for Ryan
Beck & Co. Mr. Benson holds an M.M. in Finance from Northwestern University and
a B.A. in Economics and Computer Sciences from Westminster College. He is a
Chartered Financial Analyst with 18 years of investment experience.
<PAGE>
NEW ENGLAND STAR ADVISERS FUND
NEW ENGLAND STAR WORLDWIDE FUND
NEW ENGLAND STAR SMALL CAP FUND
Supplement dated December 13, 1999 to New England Star Funds Class A, B, and C
Prospectus dated May 3, 1999 (revised November 15, 1999) and the Statement of
Additional Information dated May 3, 1999 of each of the listed funds.
Effective February 1, 2000, New England Funds will implement an organizational
name change to Nvest Funds affecting various related entities. As a result,
references in the Prospectuses and Statements of Additional Information are
changed as set forth below:
o The Distributor, New England Funds, L.P., changes its name to Nvest Funds
Distributor, L.P.
o The Investment Adviser, New England Funds Management, (all funds except New
------
England Growth Fund) changes its name to Nvest Funds Management, L.P.
o The New England Funds change to the Nvest Funds
o The General Partner, NEF Corporation, changes its name to Nvest Distribution
Corp.
o The Web site name, www.mutualfunds.com, changes to www.nvestfunds.com
o Each Trust and Fund changes its name to utilize Nvest in place of New England
as listed below:
<TABLE>
<CAPTION>
ENTITY OLD NAME NEW NAME
<S> <C> <C>
Trusts New England Funds Trust I Nvest Funds Trust I
New England Funds Trust II Nvest Funds Trust II
New England Funds Trust III Nvest Funds Trust III
New England Cash Management Trust Nvest Cash Management Trust
New England Tax Exempt Money Market Trust Nvest Tax Exempt Money Market Trust
Funds New England Growth Fund Nvest Growth Fund
New England Capital Growth Fund Nvest Capital Growth Fund
New England Growth and Income Fund Nvest Growth and Income Fund
New England Equity Income Fund Nvest Equity Income Fund
New England Bullseye Fund Nvest Bullseye Fund
New England Balanced Fund Nvest Balanced Fund
New England Value Fund Nvest Value Fund
New England International Equity Fund Nvest International Equity Fund
New England Star Advisers Fund Nvest Star Advisers Fund
New England Star Worldwide Fund Nvest Star Worldwide Fund
New England Star Small Cap Fund Nvest Star Small Cap Fund
New England Bond Income Fund Nvest Bond Income Fund
New England High Income Fund Nvest High Income Fund
New England Government Securities Fund Nvest Government Securities Fund
New England Limited Term U.S. Government Fund Nvest Limited Term U.S. Government Fund
New England Strategic Income Fund Nvest Strategic Income Fund
New England Short Term Corporate Income Fund Nvest Short Term Corporate Income Fund
New England Municipal Income Fund Nvest Municipal Income Fund
New England Massachusetts Tax Free Income Fund Nvest Massachusetts Tax Free Income Fund
New England Intermediate Term Tax Free Fund of California Nvest Intermediate Term Tax Free Fund of California
New England Cash Management Trust -- Money Market Series Nvest Cash Management Trust -- Money Market Series
New England Tax Exempt Money Market Trust Nvest Tax Exempt Money Market Trust
</TABLE>
(Please turn to the reverse side)
<PAGE>
NEW ENGLAND STAR SMALL CAP FUND
New England Star Small Cap Fund is co-managed by Steven J. Reid and James P.
Benson. Mr. Reid's background is described in the Prospectus under the section
entitled "Meet the Funds' Portfolio Managers -- Star Small Cap Fund." Mr.
Benson's experience is added to the same section as follows:
JAMES P. BENSON
Mr. Benson has served as co-manager of the Harris Associates segment of the Star
Small Cap Fund since November 23, 1999. Mr. Benson joined Harris Associates in
1997 as an investment analyst. Prior to joining Harris, he served as an
executive vice president and director of equity research for Ryan Beck & Co. Mr.
Benson holds an M.M. in Finance from Northwestern University and a B.A. in
Economics and Computer Sciences from Westminster College. He is a Chartered
Financial Analyst with 18 years of investment experience.
<PAGE>
NEW ENGLAND STAR ADVISERS FUND
NEW ENGLAND STAR WORLDWIDE FUND
NEW ENGLAND STAR SMALL CAP FUND
Supplement Dated December 13, 1999 to New England Stock and Star Funds Class Y
Prospectus and the Statement of Additional Information for each Fund dated
May 3, 1999
NEW ENGLAND FUNDS
Effective February 1, 2000, New England Funds will implement an organizational
name change to Nvest Funds affecting various related entities. As a result,
references in the Prospectuses and Statements of Additional Information are
changed as set forth below:
o The Distributor, New England Funds, L.P., changes its name to Nvest Funds
Distributor, L.P.
o The Investment Adviser, New England Funds Management, (all funds except New
------
England Growth Fund) changes its name to Nvest Funds Management, L.P.
o The New England Funds change to the Nvest Funds
o The General Partner, NEF Corporation, changes its name to Nvest Distribution
Corp.
o The Web site name, www.mutualfunds.com, changes to www.nvestfunds.com
o Each Trust and Fund changes its name to utilize Nvest in place of New England
as listed below:
<TABLE>
ENTITY OLD NAME NEW NAME
<S> <C> <C>
Trusts New England Funds Trust I Nvest Funds Trust I
New England Funds Trust II Nvest Funds Trust II
New England Funds Trust III Nvest Funds Trust III
New England Cash Management Trust Nvest Cash Management Trust
New England Tax Exempt Money Market Trust Nvest Tax Exempt Money Market Trust
Funds New England Growth Fund Nvest Growth Fund
New England Capital Growth Fund Nvest Capital Growth Fund
New England Growth and Income Fund Nvest Growth and Income Fund
New England Equity Income Fund Nvest Equity Income Fund
New England Bullseye Fund Nvest Bullseye Fund
New England Balanced Fund Nvest Balanced Fund
New England Value Fund Nvest Value Fund
New England International Equity Fund Nvest International Equity Fund
New England Star Advisers Fund Nvest Star Advisers Fund
New England Star Worldwide Fund Nvest Star Worldwide Fund
New England Star Small Cap Fund Nvest Star Small Cap Fund
New England Bond Income Fund Nvest Bond Income Fund
New England High Income Fund Nvest High Income Fund
New England Government Securities Fund Nvest Government Securities Fund
New England Limited Term U.S. Government Fund Nvest Limited Term U.S. Government Fund
New England Strategic Income Fund Nvest Strategic Income Fund
New England Short Term Corporate Income Fund Nvest Short Term Corporate Income Fund
New England Municipal Income Fund Nvest Municipal Income Fund
New England Massachusetts Tax Free Income Fund Nvest Massachusetts Tax Free Income Fund
New England Intermediate Term Tax Free Fund of California Nvest Intermediate Term Tax Free Fund of California
New England Cash Management Trust -- Money Market Series Nvest Cash Management Trust -- Money Market Series
New England Tax Exempt Money Market Trust Nvest Tax Exempt Money Market Trust
</TABLE>
NEW ENGLAND STAR ADVISERS FUND
On October 29, 1999, shareholders of the New England Star Advisers Fund (the
"Fund") approved a final Subadvisory Agreement (the "Final Subadvisory
Agreement") relating to the Fund, between New England Funds Management, L.P.
("NEFM"), the Fund's adviser, and Kobrick Funds LLC ("Kobrick"). The Final
Subadvisory Agreement replaces the Interim Agreement. Under the Interim
Agreement, Kobrick succeeded Founders Asset Management, LLC ("Founders") as the
subadviser of the segment of the Fund previously managed by Founders (the
"Segment") and became responsible for day-to-day management of the Segment's
investment operations under the oversight of NEFM. The Final Subadvisory
Agreement was approved by the Board of Trustees of New England Funds Trust I on
August 20, 1999.
The annual subadvisory fee rates payable to Kobrick under the Interim Agreement
and the Final Subadvisory Agreement are identical to those previously paid to
Founders to manage the Segment, which are 0.55% of the first $50 million of the
Segment's average daily net assets, 0.50% of such assets between $50 million and
$250 million and 0.475% of such assets in excess of $250 million.
In conjunction with Kobrick becoming a subadviser to the Fund, the Fund's Board
of Trustees approved amendments to the Segment's investment strategies, which
were effective at the close of business on August 20, 1999. Accordingly, the
subsection entitled "Founders" within the section entitled "Star Advisers Fund
- -- More on Investment Strategies" of the Prospectuses are revised as of such
date by replacing such subsection with the text set forth below.
KOBRICK
The segment of the Star Advisers Fund managed by Kobrick will, under normal
conditions, invest substantially in equity securities of companies with small,
medium and large capitalizations, including those Kobrick believes are
undervalued special situations and emerging growth companies. This approach
provides Kobrick with flexibility to emphasize in the Fund companies with
different capitalizations as market conditions change. Kobrick considers
emerging growth companies to be those companies which are less mature and have
the potential to grow substantially faster than the economy. Kobrick's bottom-up
approach utilizes fundamental and qualitative analysis to select individual
companies, not sectors, with the greatest potential for growth. In selecting
investments for the Fund, Kobrick generally seeks companies in a wide variety of
industries and considers a variety of factors, including any one or more of the
following:
[] the strength of a company's [] expected growth in earnings
management team
[] relative financial condition [] competitive position and business
strategy
[] entrepreneurial character [] new or innovative products,
services or processes
In making investment decisions, Kobrick employs the following four-part
investment approach:
o Screening: Kobrick analyzes thousands of companies in order to find a select
group that has the potential to meet its buy disciplines described below.
Many of the companies within this group are special situation companies
which, because of unique circumstances, such as an ability to fill a
particular niche, are attractive investments.
o Portfolio Construction: Kobrick applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team to
assess its ability to execute the company's strategy. Kobrick considers
potential risk in selecting securities to construct a diversified portfolio
that limits volatility.
o Portfolio Supervision: Kobrick closely monitors each holding in the Fund's
portfolio to determine whether it continues to possess the factors identified
when the original investment was made. This process includes continuous
review of absolute and relative valuations, evaluation of management's
execution of the company's strategy and assessment of the company's prospects
relative to the overall economic, political and financial environment.
o Portfolio Realignment: Kobrick will generally sell a position when its target
price, which is continuously evaluated, is reached, when there is a change in
a company's management or strategy, or when a company fails to execute its
strategy.
In the section entitled "Meet the Fund's Investment Adviser and Subadvisers,"
the text entitled "Founders" under the heading "Subadvisers" is replaced with
the following:
Kobrick, located at 101 Federal Street, Boston, Massachusetts 02110, serves as
subadviser to the Star Advisers Fund. Kobrick is a subsidiary of Nvest
Companies. Kobrick, the predecessor to which was formed in 1997, focuses
primarily on managing growth-oriented equity funds, including three mutual
funds.
In the section entitled "Meet the Funds' Portfolio Managers," the biographical
information on Thomas M. Arrington and Scott A. Chapman under the heading "Star
Advisers Fund" is replaced with the following:
FREDERICK R. KOBRICK
Frederick R. Kobrick has managed the Kobrick segment of the Star Advisers Fund
since August 23, 1999 and also manages Kobrick Capital Fund (since its inception
on December 31, 1997) and Kobrick Emerging Growth Fund (from its inception on
December 31, 1997 until February 1, 1999 and returned as manager on April 9,
1999). He has been in the investment business for more than 28 years. For the 12
year period immediately prior to becoming President of the predecessor to
Kobrick Funds LLC in 1997, he was an equity portfolio manager at State Street
Research & Management Company, where he served as Senior Vice President since
1989 and as a member of the firm's Equity Investment Committee since 1985. He
received an M.B.A. from Harvard Business School and a B.A. from Boston
University and is also a Chartered Financial Analyst.
LOOMIS SAYLES
In a separate matter, the segment of the Star Advisers Fund managed by Loomis
Sayles has changed its market capitalization range from those companies
constituting the Russell 2000 Index to those in the Russell 2500 Index.
Accordingly, all references to the Russell 2000 in the subsection entitled
"Loomis Sayles" within the section entitled "Star Advisers Fund - More on
Investment Strategies" are changed to the Russell 2500.
NEW ENGLAND STAR WORLDWIDE FUND
On August 20, 1999, the Board of Trustees of New England Funds Trust I (the
"Trust") approved the termination of the Subadvisory Agreement relating to New
England Star Worldwide Fund (the "Fund") between NEFM, the Fund's adviser, and
Founders. Accordingly, the references to Founders and its portfolio managers are
eliminated from the Prospectus. The Board of Trustees also approved reallocation
of the assets of the segment previously managed by Founders. Effective August
23, 1999, the assets of the segment were reallocated among the four other
segments of the Fund, with the result that the four segments, as of such date,
represented the following percentages of the Fund's assets: Harris Associates --
U.S. Segment (25%); Harris Associates -- International Segment (25%); Janus
Capital Corporation Segment (29%); and Montgomery Asset Management Segment
(21%). It is expected that the Fund's future cash flow will be allocated equally
among the four segments. The percentage of the Fund's assets held in each
segment will vary from time to time, based on the relative investment
performance of each segment.
NEW ENGLAND STAR SMALL CAP FUND
New England Star Small Cap Fund is co-managed by Steven J. Reid and James P.
Benson. Mr. Reid's background is described in the Prospectus under the section
entitled "Meet the Funds' Portfolio Managers -- Star Small Cap Fund." Mr.
Benson's experience is added to the same section as follows:
JAMES P. BENSON
Mr. Benson has served as co-manager of the Harris Associates segment of the Star
Small Cap Fund since November 23, 1999. Mr. Benson joined Harris Associates in
1997 as an investment analyst. Prior to joining Harris, he served as an
executive vice president and director of equity research for Ryan Beck & Co. Mr.
Benson holds an M.M. in Finance from Northwestern University and a B.A. in
Economics and Computer Sciences from Westminster College. He is a Chartered
Financial Analyst with 18 years of investment experience.
