<PAGE>
Supplement dated July 27, 1999 to
New England Stock Funds
Statement of Additional Information - Part I dated May 3, 1999
NEW ENGLAND EQUITY INCOME FUND
At a special shareholder meeting held on July 27, 1999, Vaughan, Nelson,
Scarborough & McCullough ("VNSM") was approved as the subadviser for Equity
Income Fund, pursuant to a Subadvisory Agreement dated July 27, 1999. VNSM had
been acting as interim subadviser since June 1, 1999, pursuant to an Interim
Subadvisory Agreement dated June 1, 1999. The annual subadvisory fee rates
payable by the Fund to VNSM and the services provided to the Fund by VNSM under
the Interim Subadvisory Agreement and the Final Subadvisory Agreement are
identical to those fees previously paid to and those services previously
provided by Loomis Sayles to manage the portfolio of the Fund. In addition, VNSM
agreed to voluntarily waive its subadvisory fee under the Interim Agreement
until June 30, 1999.
Effective June 1, 1999, NEFM and VNSM each agreed to continue the binding
undertaking that was currently in effect to limit the amount of the Fund's total
annual fund operating expenses to 1.50%, 2.25% and 2.25% of the average daily
net assets of the Fund's Class A, B and C shares, respectively ("Expense Caps").
Beginning July 1, 1999, VNSM and NEFM split any fee waivers required in
proportion to the management and subadvisory fees collected. NEFM also bears any
additional expense reimbursement above the fee waivers required for the Fund to
meet the relevant Expense Cap.
NEW ENGLAND GROWTH FUND
The first paragraph in the section entitled "MANAGEMENT FEES" on page viii is
revised to read as follows:
Pursuant to an advisory agreement dated August 30, 1996, as amended June 1,
1999, Capital Growth Management Limited Partnership ("CGM") has agreed to manage
the investment and reinvestment of the assets of the Growth Fund, subject to the
supervision of the Board of Trustees of New England Funds Trust I. Under the
advisory agreement, the Fund pays CGM an advisory fee 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 of such assets, 0.65% of such assets in excess of $500
million and 0.60% of such assets in excess of $2 billion. Prior to June 1, 1999,
CGM served as adviser to the Growth Fund pursuant to an advisory agreement
providing for an advisory fee 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
of such assets and 0.65% of such assets in excess of $500 million. Prior to
August 30, 1996, CGM served as adviser to the Growth Fund pursuant to an
advisory agreement providing for an advisory fee at the same rate as that in
effect prior to June 1, 1999.
SP89-0799
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Supplement dated July 27, 1999 to
New England Funds
Statement of Additional Information - Part II dated May 3, 1999
The section entitled "MISCELLANEOUS INVESTMENT PRACTICES" is amended for the Funds listed below as follows:
<CAPTION>
STRATEGIC INCOME FUND BOND INCOME FUND
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<S> <C>
Equity Securities Equity Securities
When-issued Securities Mortgage-backed Securities
Asset-backed Securities Asset-backed Securities
Collateralized Mortgage Obligations Collateralized Mortgage Obligations
Repurchase Agreements When-issued Securities
When-issued Securities Convertible Securities
Foreign Currency Hedging Transactions Securities of Emerging Markets
Investments in Closed-End Investment Companies Foreign Currency Hedging Transactions
Futures, Options and Swap Contracts Illiquid Securities (including Rule 144A Securities)
Short Sales Loans of Portfolio Securities
Illiquid Securities (including Rule 144A Securities) Short-term Investments
Loans of Portfolio Securities Money Market Instruments
Borrowing/Reverse Repurchase Agreements
Short-term Investments
Money Market Instruments
BULLSEYE FUND INTERNATIONAL EQUITY FUND
- ------------- -------------------------
Equity Securities U.S. Equity Securities
U.S. Government Securities U.S. Government Securities
Repurchase Agreements U.S. Corporate Fixed Income Securities
When-issued Securities Lower-quality U.S. Fixed Income Securities
Foreign Securities (Global Markets, Supranational agencies) Repurchase Agreements
Securities of Emerging Markets Zero Coupon Securities
Foreign Currency Hedging Transactions When-issued Securities
Futures, Options and Swap Contracts Foreign Securities (Depository Receipts)
Short Sales Against the Box Foreign Currency Hedging Transactions
Illiquid Securities (including Rule 144A Securities) Investments in Other Investment Companies
Loans of Portfolio Securities Futures, Options and Swap Contracts
Borrowing/Reverse Repurchase Agreements Short Sales Against the Box
Short Term Investments Illiquid Securities (including Rule 144A Securities)
Money Market Instruments Loans of Portfolio Securities
Borrowing/Reverse Repurchase Agreements
Short-term Investments
Money Market Instruments
GROWTH FUND GROWTH AND INCOME FUND
- ----------- ----------------------
Equity Securities Equity Securities
Corporate Fixed Income Securities (investment grade) Corporate Fixed Income Securities (investment grade)
U.S. Government Securities U.S. Government Securities
Repurchase Agreements Zero Coupon Securities
Zero Coupon Securities Repurchase Agreements
Convertible Securities Convertible Securities
Futures, Options and Swap Contracts Foreign Securities (Global Markets, Supranational agencies)
Short Sales Against the Box Foreign Currency Hedging Transactions
Illiquid Securities (including Rule 144A Securities) Investments in Other Investment Companies
Borrowing/Reverse Repurchase Agreements Futures, Options and Swap Contracts
Short-term Investments Short Sales Against the Box
Money Market Instruments Illiquid Securities (including Rule 144A Securities)
Loans of Portfolio Securities
Borrowing/Reverse Repurchase Agreements
Short-term Investments
Money Market Instruments
CAPITAL GROWTH FUND BALANCED FUND
- ------------------- -------------
Equity Securities Equity Securities
Corporate Fixed Income Securities (investment grade) Non-Convertible Preferred Stock
U.S. Government Securities Lower Quality Corporate Fixed Income Securities
Repurchase Agreements Repurchase Agreements
Zero Coupon Securities Convertible Securities
Convertible Securities Investments in Other Investment Companies
Foreign Securities (Global Markets, Supranational agencies, Foreign Currency Hedging Transactions
Depository receipts) Futures, Options, and Swap Contracts
Foreign Currency Hedging Transactions Short Sales Against the Box
Investments in Other Investment Companies Illiquid Securities (including Rule 144A Securities)
Futures, Options, and Swap Contracts Loans of Portfolio Securities
Short Sales Against the Box Borrowing/Reverse Repurchase Agreements
Illiquid Securities (including Rule 144A Securities) Short-term Investments
Loans of Portfolio Securities Money Market Instruments
Borrowing/Reverse Repurchase Agreements
Short-term Investments
Money Market Instruments
VALUE FUND EQUITY INCOME FUND
- ---------- ------------------
Equity Securities Equity Securities
Corporate Fixed Income Securities (investment grade) Corporate Fixed Income Securities (investment grade)
U.S. Government Securities Lower Quality Corporate Fixed Income Securities
Repurchase Agreements U.S. Government Securities
Zero Coupon Securities Zero Coupon Securities
Convertible Securities Convertible Bonds
Foreign Currency Hedging Transactions Foreign Securities (Global Markets)
Investments in Other Investment Companies Securities of Emerging Markets
Futures, Options, and Swap Contracts Foreign Currency Hedging Transactions
Short Sales Against the Box Investments in Other Investment Companies
Illiquid Securities (including Rule 144A Securities) Futures, Options and Swap Contracts
Loans of Portfolio Securities Short Sales Against the Box
Borrowing/ Reverse Repurchase Agreements Illiquid Securities (including Rule 144A Securities)
Short-term Investments Loans of Portfolio Securities
Money Market Instruments Borrowing/Reverse Repurchase Agreements
Short-term Investments
Money Market Instruments
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SP90-0799
