File Nos.
811-5646;
33-24041
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Post-Effective Amendment No. 8 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 11 X
WESTON PORTFOLIOS
(Exact Name of Registrant as Specified in Charter)
20 William Street, Wellesley, Massachusetts 02181
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code (617) 235-7055
Douglas A. Biggar, President; Weston Portfolios; 20 William Street,
Wellesley, Massachusetts 02181
(Name and Address of Agent for Service)
Please send copies of all communications to:
Steven M. Felsenstein, Esquire
Stradley, Ronon, Stevens, & Young
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective
(Check appropriate box)
X immediately upon filing pursuant to paragraph (b)
on pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
The Registrant registered in an indefinite number of Registrant's
securities under this Registration Statement pursuant to Rule 24f-2.
Registrant filed a Rule 24f-2 Notice for its most recent fiscal year on
approximately December 22, 1994.
Page 1 of 68 pages.
Exhibit Index page 66 .
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TABLE OF CONTENTS
TO FORM N-1A
The Facing Page
1- Cross-Reference Sheet
2- Part A - Prospectus
3- Part B - Statement of Additional
Information
4- Part C - Other Information
5- Signature Page
Exhibits
2/68
CROSS REFERENCE SHEET
N-1A
Item No. Caption or Location in Prospectus
Part A
1 Cover
2 Fund Expenses; Highlights
3 N/A
4 Prospectus Cover, Investment Objective and Policies of
each Portfolio, Investment Restrictions, Investments in
Investment Companies, Options and Futures, Money Market
Securities
5 Board of Directors, Investment Advisor, Distributor,
Transfer Agent, Custodian, and General Operations
6 Capital Stock, Dividends, Distributions and Taxes
7 Determination of Net Asset Value, How to Purchase Shares
8 Redemption of Shares
9 N/A
Part B
10 Cover
11 Table of Contents
12 N/A
13 Cover, The Fund's Investments, Investment Restrictions
14 Officers and Directors of the Fund
15 N/A
16 Investment Advisor
17 Allocation of Portfolio Brokerage
18 N/A
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19 Purchase of Shares, Exchange of Shares, Determination of
Net Asset Value
CROSS REFERENCE SHEET
(Page 2)
20 N/A
21 Distributor
22 N/A
23 To be supplied by Amendment
Part C
Items 24 through 32 have been ensured in order in Part C
4/68
WESTON PORTFOLIOS
PROSPECTUS dated February 29, 1996
20 William Street, Wellesley, Massachusetts 02181
(617) 239-0445
Weston Portfolios (the "Trust") is an open-end diversified
management investment
company. It was organized as a series Maryland corporation
on July 20, 1988 and
reorganized as a Massachusetts business trust on March 20,
1990. The Trust currently
offers shares of two series (each a "Portfolio"), each of
which has a specific investment
objective. There is no assurance the objectives will be
achieved.
NEW CENTURY CAPITAL PORTFOLIO. The objective of the
Portfolio is capital
growth, with the secondary objective being income while
managing risk. The Portfolio
seeks to achieve its objective by concentrating in shares of
registered investment
companies which emphasize investments in growth stocks and
by making other
investments selected in accordance with the Portfolio's
investment policies and
restrictions. (See "Investment Objectives and Policies.")
NEW CENTURY I PORTFOLIO. The objective of the Portfolio is
income, with the
secondary objective being growth while managing risk. The
Portfolio seeks to achieve its
objective by concentrating in shares of registered
investment companies which emphasize
investments in fixed income securities, preferred stocks and
high dividend paying stocks
and by making other investments selected in accordance with
the Portfolio's investment
policies and restrictions. (See "Investment Objectives and
Policies.")
The shares of the Portfolios may be purchased or redeemed
at their next determined net
asset value. Purchases or Redemptions will be effected at
net asset value next determined
following receipt of the investor's request. (See
"Determination of Net Asset Value," Page
18, "How to Purchase Shares," Page 19, and "How to Redeem
Shares," Page 19).
____________________________________________________________
___________
This Prospectus sets forth concisely the information about
The Trust that a prospective
investor ought to know before investing. Investors should
read and retain this Prospectus
for future reference.
More information about the Trust has been filed with the
Securities and Exchange
Commission, and is contained in the "Statement of Additional
Information," dated
February 29, 1996, which is available at no charge upon
written request to the Trust. The
Trust's Statement of Additional Information is incorporated
herein by reference.
____________________________________________________________
___________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
5/68
Weston Portfolios
February 29, 1996
For investors seeking
consistent returns over time
Contents Page
Expense Table 3
Financial Highlights 4
Highlights 6
Performance 8
Investment Objective and Policies
of Each Portfolio 8
Investment Restrictions 13
Beneficial Shares 14
Board of Trustees 14
Investment Advisor 14
Distribution of Shares 15
Custodian 16
Transfer Agent 16
General Operations 16
Dividends,Distributions,Taxes 16
Determination of Net Asset Value 17
How to Purchase Shares 18
How to Redeem Shares18
Special Plans19
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EXPENSES OF THE PORTFOLIOS
The following tables illustrate all expenses and fees that a
shareholder of the Fund will
incur.
Shareholder Transaction Expenses
Capital I
Portfolio Portfolio
Sales Load Imposed on Purchases none none
Sales Load Imposed on Reinvested Dividend none none
Redemption Fees none none
Exchange Fees none none
Annual Operating Expenses (as a percentage of average net
assets)
Management and Advisory Expenses 1.00% 1.00%
Shareholder and Custody Accounting Costs .19% .32%
12b-1 Fees .16% .14%
Other Expenses .26% .26%
Total Operating Costs 1.61% 1.72%
The purpose of this table is to assist the investor in
understanding the various expenses
that an investor in the Trust will bear directly or
indirectly. The annualized fees and
expenses set forth above are based on the Trust's operations
during it's fiscal year ended
October 31, 1995.
The following example illustrates the expenses that you
would pay on a $1,000 investment
over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at
the end of each time period. As noted in the table above,
the Trust charges no redemption
fees of any kind.
1 year 3 years 5 years 10 years
Capital Portfolio $16 $51 $86 $191
I Portfolio $17 $54 $93 $203
This example should not be considered a representation of
past or future expenses or
performance. Actual expenses may be greater or lesser than
those shown.
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NEW CENTURY CAPITAL
Financial Highlights
The following table provides selected per share data and
ratios for a share of the New
Century Capital Portfolio throughout the periods presented
and is part of the Portfolio's
Financial Statements included in the Statement of Additional
Information. The Portfolio's
Financial Statements have been examined by Tait, Weller &
Baker whose opinion thereon
(which is unqualified) is also included in the Statement of
Additional Information. The
Statement of Additional Information is available at no
charge upon written request to the
Trust.
(For A Share Outstanding Throughout The Period)
Year Ended October 31,
1995 1994 1993 1992 1991
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period$12.31 $12.74 $12.15 $12.28 $9.39
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.06) (0.08) (0.07) (0.02) 0.09
Net gain (loss) on securities
(both realized and unrealized) 2.16 0.64 2.39 0.27 2.97
Total from investment operations 2.10 0.56 2.32 0.25 3.06
LESS DISTRIBUTIONS
Dividends from net investment income - - - - (0.17)
Distributions from capital gains (1.29) (0.99) (1.73) (0.38) -
Total distributions (1.29) (0.99) (1.73) (0.38) (0.17)
Net asset value, end of period $13.12 $12.31 $12.74 $12.15 $12.28
TOTAL RETURN 19.60% 4.70% 20.83% 1.82% 33.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000's)
$50,889 $37,968 $39,001 $36,072$36,243
Ratio of expenses to average net assets1.61% 1.60% 1.54% 1.58% 1.76%
Ratio of net investment income (loss)
to average net assets -0.52% -0.68% -0.53% -0.14% 0.84%
Portfolio turnover 206% 107% 133% 224% 156%
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See accompanying notes to the financial statements
NEW CENTURY I
Financial Highlights
The following table provides selected per share data and
ratios for a share of the New
Century I Portfolio throughout the periods presented and is
part of the Portfolio's
Financial Statements included in the Statement of Additional
Information. The Portfolio's
Financial Statements have been examined by Tait, Weller &
Baker whose opinion thereon
(which is unqualified) is also included in the Statement of
Additional Information. The
Statement of Additional Information is available at no
charge upon written request to the
Trust.
(For A Share Outstanding Throughout The Period)
1995 1994 1993 1992 1991
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $11.22 $11.94 $11.36 $11.21 $9.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.24 0.20 0.36 0.28 0.37
Net gain (loss) on securities
(both realized and unrealized) 1.28 (0.05) 1.61 0.28 1.60
Total from investment operations 1.52 0.15 1.97 0.56 1.97
LESS DISTRIBUTIONS
Dividends from net investment income (0.24) (0.19) (0.31) (0.28) (0.46)
Distributions from capital gains (0.68) (0.68) (1.08) (0.13) -
Total distributions (0.92) (0.87) (1.39) (0.41) (0.46)
Net asset value, end of period $11.82 $11.22 $11.94 $11.36 $11.21
TOTAL RETURN 14.93% 1.26% 18.90% 5.02% 20.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $30,124 $23,803 $22,534 $18,949 $19,465
Ratio of expenses to average net assets 1.72% 1.73% 1.93% 1.83% 1.96%
Ratio of net investment income to average net assets
2.14% 1.57% 2.11% 2.52% 3.52%
Portfolio turnover 191% 130% 73% 172% 121%
See accompanying notes to the financial statements
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HIGHLIGHTS
INVESTMENT OBJECTIVE
NEW CENTURY CAPITAL PORTFOLIO. The objective of the
Portfolio is capital
growth, with the secondary objective being income while
managing risk. The Portfolio
seeks to achieve its objective by concentrating in shares of
registered investment
companies which emphasize investments in growth stocks and
by making other
investments selected in accordance with the Portfolio's
investment policies and
restrictions. (See "Investment Objectives and Policies.")
NEW CENTURY I PORTFOLIO. The objective of the Portfolio is
income, with the
secondary objective being growth while managing risk. The
Portfolio seeks to achieve its
objective by concentrating in shares of registered
investment companies which emphasize
investments in fixed income securities, preferred stocks and
high dividend paying stocks
and by making other investments selected in accordance with
the Portfolio's investment
policies and restrictions. (See "Investment Objectives and
Policies.")
INVESTMENT POLICIES
During times when the advisor for the Portfolios, Weston
Financial Group, Inc. (the
"Advisor") determines that there is a generally rising trend
in the appropriate markets
(stocks for New Century Capital Portfolio and fixed income
and stocks for New Century I
Portfolio), each of the Portfolios will attempt to take
advantage of this opportunity by
establishing a greater percentage in the security pool
portion of the portfolio. In general,
the security pool of the New Century Capital Portfolio will
be inherently more aggressive
than the New Century I Portfolio. It will concentrate
primarily in those registered
investment companies which emphasize growth stocks while the
New Century I Portfolio
will concentrate primarily in those registered investment
companies which emphasize fixed
income securities, preferred stocks and high dividend paying
stocks. During a rising stock
market, the return generated from the New Century Capital
Portfolio will consist primarily
of net realized and unrealized appreciation in the value of
the investment company
securities and, to a lesser degree, from dividends and
interest. As to the New Century I
Portfolio, in rising fixed income markets the return will,
in general, consist primarily of
interest and, to a lesser degree, from net realized and
unrealized appreciation, and in a
rising stock market the returns will consist of dividends
and net realized and unrealized
gain from stocks. During times when the Advisor determines
that there is a generally
declining trend in the fixed income and/or stock markets,
greater percentages will be
placed in the cash pool portion of the Portfolio. In both
the New Century Capital Portfolio
and New Century I Portfolio, the cash pool will emphasize
protection of principal and will
de-emphasize the generation of growth (New Century Capital
Portfolio) and high income
(New Century I Portfolio). The cash pool will consist of
money market securities, which
will include marketable securities issued or guaranteed as
to principal and interest by the
government of the United States or by its agencies or
instrumentalities, domestic bank
certificates of deposit, bankers' acceptances, prime
commercial paper, repurchase
agreements (secured by United States Treasury or agency
obligations) and money market
regulated investment company securities. Furthermore, in
times of extremely volatile or
abnormal market conditions, the Advisor may adopt a purely
temporary defensive position
which would consist of having most, if not all of the assets
in the cash pool. This is
designed to concentrate solely on preserving the value of
the assets in the Portfolios.
HOW TO INVEST
Shares of each Portfolio are distributed by Weston
Securities Corp. (the Distributor), and
by selected dealers. The minimum initial investment is
$5,000; subsequent purchases must
be at least $100, but may be waived for tax qualified plans
such as individual retirement
accounts.
There is no sales load assessed on the New Century Capital
Portfolio or the New Century
I Portfolio (though each Portfolio does
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bear a portion of
the costs of distributing its shares
through a monthly fee at up to a maximum annualized rate of
..25% of the Portfolio's net
assets). Purchases are made at the net asset value per share
next computed after receipt of
an order by the Portfolio's transfer agent, Fund/Plan
Services, Inc. (the "Transfer Agent").
(See "How to Purchase Shares.")
HOW TO REDEEM
Shares may be redeemed by the Portfolios or repurchased by
the Distributor at any time
at the net asset value next determined after receipt of the
request by the Transfer Agent.
There is no charge for redemptions by the Portfolios or
repurchases by the Distributor.
The Portfolios have the right to redeem shares in kind, and
to redeem accounts reduced to
less than the minimum investment (presently $5,000) when the
account is not brought up
to the minimum after 30 days notice to the shareholder. If
shares are redeemed in kind, the
redeeming shareholder may incur brokerage costs in
converting the assets into cash. (See
"Redemption or Repurchase of Shares.")
DIVIDENDS AND DISTRIBUTIONS
The net investment income of the New Century Capital
Portfolio, if any, is distributed by
an annual dividend and the net investment income of the New
Century I Portfolio, if any,
is distributed by a quarterly dividend. If net capital gains
are realized, they will be
distributed in an annual distribution. Dividends or
distributions may be received in cash or
by reinvestment in additional shares. (See "Dividends,
Distributions and Taxes.")
INVESTMENT ADVISOR
Weston Financial Group, Inc. serves as the advisor to each
Portfolio (managing the assets
of each Portfolio and allocating its portfolio transactions)
pursuant to separate advisory
agreements providing for a monthly fee equal to an
annualized rate of 1% of the first $100
million of each Portfolio's average daily net assets and
declining to .75% of the respective
Portfolio's average daily net assets exceeding $100 million.
These fees are higher than the
investment advisory fees paid by most other mutual funds.
The Advisor currently provides
investment advisory services for approximately $50 million
of assets of individuals, trusts
and estates. Weston has provided discretionary investment
advisory services relating to
investments in mutual funds since 1981. (See "Investment
Advisor.")
RISK FACTORS
Prospective investors in each Portfolio should consider a
number of factors:
1. The Portfolios concentrate (invest more than 25% and up
to 100% of the value of their
respective assets) in the shares of registered open-end and
closed-end investment
companies, are affected by their performance, and contribute
to the expenses of operating
those companies (including their advisory or operating
fees). (See "Investments in
Investment Companies and the Investment Company Industry.")
Each Portfolio has the
right to invest in investment companies which charge a
"sales load" and other sales
charges. While each Portfolio will seek to minimize such
charges, they can reduce the
Portfolio's investment results.
2. The Portfolios may invest in repurchase agreements (as
may the underlying investment
companies), which involve risks of loss if a seller defaults
on its obligations under the
agreement. (See "Investment Objective and Policies" for a
discussion of the risks of
repurchase agreements.)
3. An investor in the Portfolios should recognize that he
may invest directly in mutual
funds and that, by investing in mutual funds indirectly
through the Portfolios, he will bear
not only his proportionate share of the expenses of the
Portfolios (including operating
costs and investment advisory and administrative fees) but
also indirectly similar expenses
of the underlying funds. In addition, a Portfolio
shareholder will bear his proportionate
share of expenses related to the distribution of that
Portfolio share and also may indirectly
bear expenses paid by an underlying fund related to the
distribution of its shares.
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4. The Portfolios may invest in investment companies which
concentrate in a particular
industry. These companies tend to have greater fluctuation
in value than other investment
companies.
5. Redeeming shareholders may pay redemption fees or
brokerage costs if shares are
redeemed in-kind.
6. The success of market timing depends on sustained price
movements in the stock
markets. Long periods may occur without sustained price
moves. If the market whipsaws,
i.e., if potential price trends start to develop but reverse
before an actual trend develops,
this pattern of false starts may generate repeated entry and
exit signals that can result in
unprofitable buying and selling transactions. The Advisor
may moderate the timing of
portfolio actions to minimize this effect, in which event
the Portfolio may be restructured
after some movement in the market. Market timing programs
using mutual fund shares are
only practical if a relatively small number of investors in
any particular mutual fund are
engaged in the practice. If there is an increase in the use
of trend-following programs
which buy and sell mutual fund shares, it could result in
redemption problems, alter market
trading patterns or prompt mutual funds to impose limits on
the amount that can be
invested by market timers. Incorrect market timing decisions
could result in assets
remaining in mutual funds at a time when the market is
declining, in which case, the value
of the shares would decline.
PERFORMANCE
From time to time a Portfolio may advertise its total return
and yield. The "total return" of
the Portfolio refers to the average annual compounded rates
of return over 1, 5 and 10
year periods or for the life of the Portfolio (which periods
will be stated in the
advertisement) that would equate an initial amount invested
at the beginning of a stated
period to the ending redeemable value of the investment. The
calculation assumes the
reinvestment of all dividends and distributions, includes
all recurring fees that are charged
to all shareholder accounts and a deduction of all non
recurring charges deducted at the
end of each period. The "yield" of a Portfolio is computed
by dividing the net investment
income per share earned during the period stated in the
advertisement (using the average
number of shares entitled to receive dividends) by the
maximum offering price per share
on the last day of the period. The calculation includes
among expenses of the Portfolio, for
the purpose of determining net investment income, all
recurring charges for the period
stated. The yield formula provides for semi-annual
compounding which assumes that net
investment income is earned and reinvested at a constant
rate and annualized at the end of
a six-month period. (During the first year of operations,
the Portfolio may advertise an
"aggregate total return" for the period from the effective
date of the Portfolio to the latest
available date.) The Trust's Annual Report to shareholders
for the most recent fiscal year
contains further information about the performance of each
Portfolio. The Annual Report
is available without charge upon request to the Trust.
INVESTMENT OBJECTIVES AND POLICIES OF EACH PORTFOLIO
NEW CENTURY CAPITAL PORTFOLIO
The New Century Capital Portfolio's objective is capital
growth, with the secondary
objective being income while managing risk. It seeks to
achieve this objective by
concentrating (investing more than 25% of the value of its
assets) in shares of other
registered investment companies which emphasize investments
in growth stocks and by
making other investments selected in accordance with the
Portfolio's investment
restrictions and policies. To generate its return, the
Portfolio will use a variety of
investment techniques designed to generate net realized and
unrealized appreciation and
secondarily interest and dividends. (See "New Century
Capital and New Century I
Portfolios" Page 10 and "Investments in Investment Companies
and the Investment
Company Industry" Page 11.)
To achieve its investment objective, the Advisor will
attempt to determine the prevailing
trend in the equity market. When it is determined that there
is a prevailing upward trend in
the equity market, more of the Portfolio will be positioned
in the securities pool. This
strategy will consist of moving into those investments which
would most benefit from such
a trend. In
general, this would consist of moving into those registered
investment companies which
have a high proportion of their assets in growth stocks. If
the Advisor anticipates that the
upward trend should continue for some time, then the
Portfolio may commit most, if not
all, of its funds to the securities pool. In choosing from
among the available investment
companies the Advisor will, in its decision-making process,
consider among other things
the prior performance of the underlying investment company,
its
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performance in both up
and down markets, the current make-up of its portfolio and
the current investment
philosophy of the underlying investment company manager. In
an attempt to minimize to
some extent the risk with the securities pool, the Portfolio
may invest a portion of its
assets in those investment companies which utilize different
versions of so-called defensive
strategies. These defensive strategies may consist of, among
other things, the purchase of
low beta stocks, a combination of stocks and bonds or
convertible bonds and the purchase
of high dividend paying stocks. In addition, in its
securities pool, the Portfolio may commit
a portion of its assets to certain investment companies
whose assets do not necessarily
move in accordance with the United States stock market.
These would include investment
companies which invest in foreign stocks and bonds and gold
and silver mining companies.
To further enhance the performance of the securities pool,
the Advisor may invest in so-
called sector funds which, in general, concentrate their
assets in one segment of the
equities market.
When the Advisor anticipates a generally declining trend in
the equity market, the Advisor
will begin to move funds into the cash pool purely as a
temporary defensive position. This
is accomplished by moving from investment companies with a
high growth stock
concentration to money market funds, cash and cash
equivalents. If the Advisor anticipates
a prolonged or significant decline, then the Portfolio may
place most, if not all, of its funds
in the cash pool.
The Advisor will attempt to monitor and respond to changing
economic and market
conditions and then, if necessary, reposition the
Portfolio's assets, depending on the trend
analysis. Trends are analyzed by using a variety of
technical and fundamental indicators.
The trends are determined by the Advisor's judgment in light
of current and past general
economic and market conditions. Among the factors which are
included in the analysis,
but not limited to, are the direction of interest rates,
fiscal and monetary policy, economic
growth, inflation rates, industry trends and various moving
averages. When a general
rising trend in the securities market is identified, the New
Century Capital Portfolio will
invest in registered investment companies that concentrate
primarily in growth stocks.
NEW CENTURY I PORTFOLIO
The New Century I Portfolio's objective is income, with the
secondary objective being
growth while managing risk. It seeks to achieve this
objective by concentrating (investing
more than 25% of the value of its assets) in shares of
registered investment companies
which emphasize investments in fixed income securities,
preferred stocks and high
dividend paying stocks and by making other investments
selected in accordance with the
Portfolio's investment restrictions and policies. To
generate its return, the Portfolio will
use a variety of investment techniques designed to generate
primarily interest, dividends
and other income and secondarily net realized and unrealized
appreciation in the value of
the Portfolio's portfolio of investment companies (including
money market mutual funds),
cash equivalents (such as repurchase agreements or
certificates of deposit) and cash. (See
"New Century Capital and New Century I Portfolios" Page 10
and "Investments in
Investment Companies and the Investment Company Industry"
Page 11.)
To achieve its investment objective, the Advisor will
attempt to determine the prevailing
trend in fixed income and equities markets. When it is
determined that there is a prevailing
upward trend in either market, the Portfolio will be
positioned in the securities pool. This
strategy will consist of moving into those investments which
would most benefit from such
a trend. In general, but not necessarily, this would consist
of moving into a number of
different investments. The majority would be in investment
companies emphasizing high
interest and dividend paying securities such as bonds,
convertible bonds and preferred
stocks. The remainder would be in investment companies
emphasizing equities. If the
Advisor anticipates that the upward trend should continue
for some time, then the
Portfolio may commit most, if not all, of its funds to the
securities pool. In choosing from
among the available investment companies the Advisor will,
in its decision-making
process, consider among other things the prior performance
of the underlying investment
company, its performance in both up and down markets, the
current make-up of its
portfolio and the current investment philosophy of the
underlying investment company's
manager. In
an attempt to minimize to some extent the risk with the
securities pool, the Portfolio may
invest in certain bond funds which differ in their strategy
as to the types of bonds they may
hold. For example, a fund may be chosen because it primarily
invests in intermediate or
short-term bonds which are less volatile than funds
emphasizing longer term bonds. To
further minimize the risk in the securities pool, the
investment manager does not normally
intend to invest in equity funds which would be
characterized as aggressive growth funds.
When the Advisor anticipates a generally declining trend in
securities markets, the Advisor
will begin to move more funds into the cash pool by moving
from investment companies
with high equity and bond concentrations to money market
funds, cash and cash
equivalents. If the Advisor anticipates a prolonged or
significant decline, then the Portfolio
may place most, if not all, of its funds in the cash pool.
The Advisor will attempt to monitor and respond to changing
economic and market
conditions and then, if necessary, reposition the
Portfolio's assets, depending on the trend
analysis. Trends are analyzed by using a variety of
technical and fundamental indicators.
The trends are determined by Weston's Advisor's judgment in
light of current and past
general economic and market conditions. Among the factors
which are included in the
analysis, but not limited to, are the direction of interest
rates, trends in yields, fiscal and
monetary policy, economic growth, inflation rates, industry
trends and various moving
averages. In the New Century I Portfolio, when a general
rising trend in the fixed income
market is identified, the Portfolio will position itself in
registered investment companies,
concentrating in fixed income securities. If a general
rising trend is identified in both the
fixed income market and the equity market, the Portfolio
will position itself in registered
investment companies that concentrate in fixed income
securities as well as registered
investment companies which emphasize investments in
preferred stock, and high dividend
paying stocks.
NEW CENTURY CAPITAL AND NEW CENTURY I PORTFOLIOS
While it is not currently the intention of the Portfolios,
each Portfolio retains the right,
13/68
when the Advisor deems appropriate, to invest in individual
securities. Acquisition of
securities pursuant to this policy in excess of 5% of the
Portfolios' assets (other than for
defensive purposes) is subject to prior board approval.
Shareholders will be informed
when the Advisor decides to invest in individual securities
by a prospectus supplement
delivered to all shareholders in advance of the
implementation of such a decision. The
Portfolios will invest in common stocks or bonds when the
Advisor believes from its
analysis of economic and market trends that the investment
environment favors investing
in those securities. Securities are selected from particular
industry groups and particular
companies which may be experiencing favorable demand.
Securities will be selected based
upon value and/or income and/or capital appreciation. The
Portfolios have not set limits
on asset size for the issuers of such securities.
While it is not currently the intent of the Portfolios, each
Portfolio retains the right when
the Advisor deems appropriate to invest in fixed income
securities.
The Portfolios may invest only in investment grade fixed
income securities. There are four
categories which are referred to as investment grade. These
are the four highest ratings or
categories as defined by Moody's Investors Service, Inc.
("Moody's) and Standard and
Poor's Corporation ("Standard & Poor's"). Categories below
this have lower ratings and
are considered more speculative in nature. The following are
bond ratings classified as
investment grade by Moody's and Standard and Poor's. Baa and
BBB rated securities are
considered to have speculative characteristics.
Moody's Standard & Poor's
High Grade Aaa AAA
High Quality Aa AA
Upper Medium Grade AA A
Medium Grade Baa BBB
Ratings from "AA" to" B" may be modified by a plus or
minus sign to show
relative standings within the categories.
The Advisor will attempt to monitor and respond to changing
economic and market
conditions and if necessary reposition the portfolios'
assets depending on the trend
analysis. Trends are analyzed by using a variety of
technical and fundamental indicators.
Among the factors which are included in the analysis are the
direction of interest rates,
economic growth, industry trends and various moving
averages.
When the Advisor identifies an upward trend, the New Century
Capital Portfolio will seek
to obtain growth over income while managing risk
14/68
and the New
Century I Portfolio will
seek to obtain income over growth while managing risk.
When a downward trend has been identified, protection of
principal may be emphasized
over opportunities for gains in both the New Century Capital
and New Century I
Portfolios. When the Advisor believes that income producing
assets are more appropriate
due to the economic and market conditions an emphasis will
be placed on income
producing investment vehicles. During periods of time when
the Advisor believes there
may be unacceptable high risks, the Portfolios may invest in
cash, money market accounts,
or money market instruments to protect the value of the
Portfolios.
Investments in Investment Companies and the
Investment Company Industry
The Portfolios, by investing in shares of investment
companies, indirectly pay a portion of
the operating expenses, management expenses and brokerage
costs of such companies as
well as the expense of operating the Portfolio. Thus, the
Portfolios' investors will
indirectly pay higher total operating expenses and other
costs than they would pay by
owning the underlying investment companies directly. The
Portfolios attempt to identify
investment companies that have demonstrated superior
management in the past, thus
possibly offsetting these factors by producing better
results and/or lower costs and
expenses than other investment companies. There can be no
assurance that this result will
be achieved.
Investing in an investment company does not eliminate
investment risk. When the Advisor
has identified a significant upward trend in a particular
industry sector, each Portfolio
retains the right to invest in investment companies which
concentrate in a particular
industry sector. Such investment companies tend to have
greater fluctuations in value
when compared to other categories of investment companies.
The Portfolios must also structure their investments in
other investment company shares
to comply with certain provisions of federal and state
securities laws. The presently
applicable provisions impose limits on the amount of the
investment of Weston's assets in
any investment company (3% of total asset value of any such
company) and these laws
and regulations also may adversely affect the operations of
each Portfolio with respect to
purchases or redemption of shares issued by an investment
company. As a result of this
restriction, a Portfolio would have to select alternative
investments, which may be less
desirable than the previously acquired investment company
securities. Shares held by
Weston in excess of 1% of an issuer's outstanding securities
will be considered illiquid
and, together with other illiquid securities, may not exceed
10 percent of Weston's assets.
(The underlying investment company may be allowed to delay
redemption of its shares
held by an investment company, such as Weston, in excess of
1% of its total assets for 30
days.) Consequently, if a Portfolio were more heavily
concentrated in a small investment
company, it might not be able to readily dispose of such
investment company shares and
might be forced to redeem Portfolio shares in kind to
redeeming shareholders by
delivering shares of investment companies that are held in
Weston's portfolio. Each
Portfolio will generally limit the portion of its assets
which will be invested in any
underlying fund so as to minimize or eliminate the effects
of this restriction. Although a
Portfolio may be restricted in its ability to redeem,
Portfolio shareholders who receive
shares upon redemption are not so restricted. If shares are
redeemed in kind, the
redeeming Shareholder may incur redemption fees or brokerage
costs in converting the
assets into cash. Applicable fundamental policies are
reflected in the Portfolio's investment
restrictions. Holdings of affiliated persons are included in
the 3 percent limitation on
investment in any other investment company and in the
computation of the 1% of an
underlying issuer's securities for purposes of the
illiquidity restriction, and possible delay in
redemption of underlying investment company securities,
described above. When affiliated
persons hold shares of any of the underlying funds, Weston's
ability to invest is restricted,
thus forcing Weston to select alternative, and perhaps less
preferable, investments. This
restriction applies to Weston as a whole, not each Portfolio
separately.
Investment decisions by the investment advisors of the
underlying funds are made
independently of the Portfolios and its Advisor. Therefore,
the investment advisor of one
underlying fund may be purchasing shares of the same issuer
whose shares are being sold
by the investment advisor of another such fund. The result
of this would be an indirect
expense to a Portfolio without accomplishing any investment
purpose.
Each Portfolio expects that it will select the investment
companies in which it will invest
based, in part, upon an analysis of the past and projected
performance and investment
structure of the investment companies. However, each
Portfolio must consider other
factors in the selection of investment companies. These
other factors include, but are not
limited to, the investment company's size, shareholder
services, liquidity, investment
objective and investment techniques, etc. Each Portfolio may
be affected by the losses of
its underlying investment companies, and the level of risk
arising from the investment
practices of such
15/68
investment companies (such as repurchase
agreements, quality standards,
or lending of securities) and has no control over the risks
taken by such investment
companies. Each Portfolio can also elect to redeem (subject
to the 1% limitation discussed
above) its investment in an underlying investment company
(or sell it if the company is a
closed-end one) if that action is considered necessary or
appropriate.
The following is a list of many of the types of investment
companies which are eligible for
inclusion in the Portfolios:
Growth Funds
Growth and Income Funds
Bond and Preferred Funds
Balanced Funds
Precious Metals Funds/Gold Funds
Money Market Funds
GNMA Funds
Global Bond Funds
Global Equity Funds
Municipal Bonds
Sector Funds
High Yield Bond Funds
Income (Bond) Funds
Income (Equity) Funds
Income (Mixed) Funds
Option/Income Funds
U.S. Government Income Funds
International Equity Funds
International Bond Funds
International Money Market Funds
Global Money Market Funds
Aggressive Growth Funds
Municipal Bond Funds
Short Term Bond Funds
Intermediate Term Bond Funds
The Portfolios will not invest in an investment company
which charges a contingent
deferred sales load.
Money Market Securities
Each portfolio may invest in money market securities, which
include: marketable securities
issued or guaranteed as to principal and interest by the
government of the United States or
by its agencies or instrumentalities; domestic bank
certificates of deposit; bankers'
acceptances; prime commercial paper; and repurchase
agreements (secured by United
States Treasury or agency obligations).
The cash pool will be invested in high quality money market
instruments while seeking
maximum current income and maintaining preservation of
capital. These instruments are
considered safe because of their short-term maturities,
liquidity and high quality ratings.
Commercial paper is limited to the two highest ratings of
Moody's and Standard and
Poor's. Firms rate borrowers differently according to their
classifications. Standard and
Poor's rates companies from A for the highest quality to D
for the lowest quality rating.
The A-rated companies are also subdivided into three groups
depending on relative
strength. Moody's uses P1 as their highest rating along with
P2 and P3. Commercial Paper
may be purchased that is rated Prime 1 or 2 by Moody's or A-
1 or A-2 by the Standard
and Poor's Corporation. Instruments such as Commercial paper
and notes which are
issued by companies having an outstanding debt rated within
these two highest ratings
may be purchased.
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Bank Certificates of Deposit and Banker's Acceptances are
limited to U.S. dollar
denominated instruments of domestic banks (generally limited
to institutions with a net
worth of at least $100,000,000) and of domestic branches of
foreign banks (limited to
institutions having total assets of not less than $1 billion
or its equivalent).
Under a repurchase agreement the Portfolio acquires a debt
instrument for a relatively
short period (usually not more than one week) subject to the
obligations of the seller to
repurchase and of the Portfolio to resell such instrument at
a fixed price. The use of
repurchase agreements involves certain risks. For example,
if the seller of the agreement
defaults on its obligation to repurchase the underlying
securities at a time when the value
of these securities has declined, the Portfolio may incur a
loss upon disposition of them. If
the seller of the agreement becomes insolvent and subject to
liquidation or reorganization
under the Bankruptcy Code or other laws, a bankruptcy court
may determine that the
underlying securities are collateral not within the control
of the Portfolio and therefore
subject to sale by the trustee in bankruptcy. Finally, it is
possible that the Portfolio may not
be able to substantiate its interest in the underlying
securities. While management of the
Portfolio acknowledges these risks, it is expected that they
can be controlled through
stringent security selection and careful monitoring
procedures.
The Portfolio will select money market securities for
investment when such securities offer
a current market rate of return which the Advisor considers
reasonable in relation to the
risk of the investment, and the issuer can satisfy suitable
standards of credit-worthiness set
by the Advisor and described in the Statement of Additional
Information.
Portfolio Turnover. Each Portfolio presently estimates that
its annualized portfolio
turnover rate generally will not exceed 200%. High portfolio
turnover might involve
additional transaction costs (such as brokerage commissions
or sales charges) which are
borne by the Portfolio, or adverse tax effects. (See
"Dividends, Distributions and Taxes".)
INVESTMENT RESTRICTIONS
The investment restrictions set forth below have been
adopted by Weston for each
Portfolio, to limit certain risks that may result from
investment in specific types of
securities or from engaging in certain kinds of transactions
addressed by such restrictions.
They may not be changed without the affirmative vote of a
majority of the outstanding
voting securities of the Portfolio. Certain of these
policies are detailed below, while other
policies are set forth in the Statement of Additional
Information. Changes in values of
particular Portfolio assets or the assets of the Portfolio
as a whole will not cause a
violation of the investment restrictions so long as
percentage restrictions are observed by
the Portfolio at the time it purchases any security.
Each Portfolio's investment restrictions specifically
provide that the Portfolio will not:
(a) as to 75% of the Portfolio's total assets, invest more
than 5% of its total assets in the
securities of any one issuer. (This limitation does not
apply to cash and cash items,
obligations issued or guaranteed by the United States
Government, its agencies or
instrumentalities or securities of other investment
companies.)
(b) invest in any investment company if a purchase of its
shares would result in Weston
and its affiliates owning more than 3% of the total
outstanding voting stock of such
investment company.
(c) purchase more than 10% of the voting securities, or more
than 10% of any class of
securities of any issuer. For purposes of this restriction,
all outstanding fixed income
securities of an issuer are considered as one class.
(d) purchase or sell commodities or commodity futures
contracts.
(e) make loans of money or securities, except (i) by the
purchase of fixed income
obligations in which the Portfolio may invest consistent
with its investment objective and
policies; or (ii) by investment in repurchase agreements
(see "Investment Objective and
Policies").
(f) invest in securities of any company if, to the knowledge
of the Portfolio, any officer or
director of Weston or the Advisor owns
17/68
more than .5% of the
outstanding securities of
such company and such officers and directors (who own more
than .5%) in the aggregate
own more than 5% of the outstanding securities of such
company.
(g) borrow money, except the Portfolio may borrow from banks
(i) for temporary or
emergency purposes in an amount not exceeding 5% of the
Portfolio's assets or (ii) to
meet redemption requests that might otherwise require the
untimely disposition of
portfolio securities, in an amount up to 33 1/3% of the
value of the Portfolio's total assets
(including the amount borrowed) valued at market less
liabilities (not including the amount
borrowed) at the time the borrowing was made. While
borrowings exceed 5% of the value
of the Portfolio's total assets, the Portfolio will not make
additional investments. Interest
paid on borrowings will reduce net income.
(h) pledge, hypothecate, mortgage or otherwise encumber its
assets, except in an amount
up to 33 1/3% of the value of its net assets but only to
secure borrowings for temporary or
emergency purposes, such as to effect redemptions.
(i) purchase the securities of any issuer, if, as a result,
more than 10% of the value of
Weston's net assets would be invested in securities that are
subject to legal or contractual
restrictions on resale ("restricted securities"), in
securities for which there are no readily
available market quotations, in repurchase agreements
maturing in more than seven days,
or in shares in excess of 1% of an underlying fund's
outstanding securities, if all such
securities would constitute more than 10% of the Portfolio's
net assets.
BENEFICIAL SHARES
Weston was organized as a Maryland corporation in 1988. The
Fund is now a
Massachusetts business trust which offers an unlimited
number of transferable beneficial
shares all at $.01 par value. At the present time, there are
two series of shares designated
as the "New Century Capital Portfolio" and the "New Century
I Portfolio". Each share has
equal dividend, voting, liquidation and redemption rights.
There are no conversion or pre-
emptive rights. Shares, when issued, will be fully paid and
non assessable. Fractional
shares have proportional voting rights. Shares of the
Portfolios do not have cumulative
voting rights, which means that the holders of more than 50%
of the shares voting for the
election of Trustees can elect all of the Trustees if they
choose to do so and, in such event,
the holders of the remaining shares will not be able to
elect any person to the Board of
Trustees. The Portfolios' shareholders will vote together to
elect Trustees and on other
matters affecting the entire trust, but will vote separately
on matters affecting separate
series.
Shareholder inquiries should be made directly to the
Distributor at the Distributor's
address on the back cover page.
BOARD OF TRUSTEES
The members of the Board of Trustees of the Trust are
fiduciaries for the Portfolios'
shareholders and are governed by the law of the Commonwealth
of Massachusetts in this
regard. They establish policy for the operation of the
Portfolios, and appoint the Officers
who conduct the daily business of the Portfolios.
INVESTMENT ADVISOR
The investments of each Portfolio are managed by Weston
Financial Group, Inc. (the
"Advisor"), 20 William Street, Wellesley, Massachusetts
02181, under separate investment
advisory agreements (previously defined as the "Advisory
Agreements") which became
effective on February 28, 1990. The Advisory Agreements
provide that the Advisor shall
supervise and manage the Portfolio's investments and shall
determine the Portfolio's
portfolio transactions, subject to periodic review by
Weston's Trustees. The Advisor is
responsible for selecting brokers and dealers (including,
when appropriate, Weston
Securities Corp. or other affiliated broker-dealers) to
execute transactions for the
Portfolio. The Board has also authorized the Advisor and
Weston's officers to consider
sales of Portfolio shares when allocating brokerage, subject
to the policy of obtaining best
price and execution on such transactions.
Pursuant to its Advisory Agreement with each Portfolio, the
Advisor will manage the
assets of each Portfolio in accordance with the stated
objective, policies and restrictions of
the Portfolio (subject to the supervision of Weston's Board
of Trustees and Weston's
officers). The Advisor will also keep certain books and
records in connection with its
services to Weston. The Advisor
18/68
has also authorized any of
its directors, officers and
employees who have been elected as Trustees or officers of
Weston to serve in the
capacities in which they have been elected. Services
furnished by the Advisor under the
agreement may be furnished through the medium of any such
directors and officers.
As compensation for its services as investment advisor, the
Advisor receives a fee,
computed daily and payable monthly, at the annualized rate
of 1% of each Portfolio's
average daily net assets for the first $100 million in
assets and .75% of the assets
exceeding that amount. The Advisor's fee is higher than that
paid by most other
investment companies. For the fiscal year ended October 31,
1995, the Advisor received
$260,474 (1% of average net assets) for the New Century I
Portfolio and $416,611 (1%
of average net assets) for the New Century Capital
Portfolio.
The Advisor uses an investment team approach to analyze
investment trends and strategies
for the Portfolios. Members of the investment team are
responsible for the continuous
review and administration of each Portfolio's investment
program, subject to the objectives
specified in the Prospectus and supplemental guidelines
approved by the Fund's Board of
Trustees. Wayne M. Grzecki, who has 19 years of investment
experience, is the
coordinator of the team. Mr. Grzecki has served in various
management positions with the
Advisor since 1986. Douglas A. Biggar and Ronald A. Sugameli
are the other members of
the team. Mr. Biggar, a Principal of the Advisor, served as
the Fund's portfolio manager
from inception to 1994. Mr. Sugameli, has served in various
management positions with
the Advisor since 1984, advising individuals concerning
financial planning and investment
advice.
Each of the following individuals owns over 25% of the
voting common stock of the
Advisor: Iven R. Horowitz, President; Douglas A. Biggar,
Executive Vice President and
Clerk; and Joseph Robbat, Jr., Chief Executive Officer and
Treasurer. The Advisor was
organized in 1981 and principally provides investment advice
to individuals. The Advisor
does not provide investment advice to any other investment
companies.
Each Advisory Agreement also identifies the right of the
Advisor to the use of the name
"Weston," and Weston may be required to change its name if
the Advisor ceases to act as
advisor to the Portfolios.
The Advisor also serves as the Portfolios' administrator
under an agreement with each
Portfolio the "Administration Agrrement") which provides
that the Advisor will furnish the
Trust with office facilities, and with any ordinary clerical
and bookkeeping services not
furnished by the custodian, transfer agent or Distributor.
The Administration Agreements
were approved by the Trustees of "the Trust", including a
majority of the Trustees who
are not "interested persons", as defined in the Investment
Company Act of 1940 the "1940
Act"), as amended, with respect to the Trust. As
compensation for its services as an
administrator, the Advisor receives an amount equal to the
salaries and expenses of the
personnel who perform the administrative duties.
DISTRIBUTION OF SHARES
Weston Securities Corp., (previously defined as the
"Distributor") is each Portfolio's
distributor under a Distribution Agreement for each
Portfolio dated February 28, 1990.
The Distributor promotes the distribution of the shares of
each Portfolio in accordance
with those agreements and the terms of the Distribution Plan
for each Portfolio (the
"Plan") adopted pursuant to Rule l2b-1 under the 1940 Act.
Iven R. Horowitz, Douglas
A. Biggar and Joseph Robbat, Jr., officers of the Advisor,
are also registered
representatives of the Distributor, which is therefore an
affiliated person of Weston. The
Distributor's offices are at 20 William Street, Wellesley,
Massachusetts 02181.
Each Plan provides for the use of Portfolio assets to pay
expenses of distributing Portfolio
shares. On July 28, 1988, the Distribution Agreement and the
Plan for each Portfolio were
approved by the Board of Trustees, including a majority of
the Trustees who are not
"interested persons" of Weston as defined in the 1940 Act
(and each of whom has no
direct or indirect financial interest in the Plans or any
agreement related thereto, referred
to herein as the "l2b-1 Trustees"). The Plans may be
terminated at any time by the vote of
the Board or the l2b-1 Trustees, or by the vote of a
majority of the outstanding voting
19/68
securities of the Portfolio. While each Plan continues in
effect, the selection of the l2b-1
Trustees is committed to the discretion of such persons then
in office.
The Plan provides that each Portfolio may incur distribution
costs which may not exceed
..25% per annum of the Portfolio's net assets for payments to
the Distributor for items such
as advertising expenses, selling expenses, commissions or
travel reasonably intended to
result in sales of shares of the Portfolio. The Distribution
Agreement adopted under each
Plan provides that each Portfolio will pay the Distributor a
monthly fee at an annual rate of
..25% of the Portfolio's average daily net assets. Thus, each
Portfolio will not bear any
distribution expenses in excess of its payments to the
Distributor. The Plans do not limit
the amounts paid to the Distributor by each Portfolio to
amounts actually expended by the
Distributor, and it is therefore possible for payments to
the Distributor to exceed its
expenses in a particular year.
Although the Plans may be amended by the Board of Trustees,
any change in the Plans
which would materially increase the amounts authorized to be
paid under the Plans must
be approved by shareholders.
The total amounts paid by the Portfolios under the foregoing
arrangements may not
exceed the maximum Plan limit specified above, and the
amounts and purposes of
expenditures under the Plans must be reported to the l2b-1
Trustees quarterly.
The SEC is currently reviewing Rule 12b-1, plans adopted
under 12b-1, and the
implementation of such plans. If the SEC adopts any new
rules or regulations, the 12b-1
Trustees may require or approve changes in the
implementation or operation of the Plans
and may also require the total expenditures by each
Portfolio under its Plan be kept within
limits lower than the maximum amount permitted by the Plan
as stated above.
CUSTODIAN
The Bank of New York, New York, New York acts as the
Custodian of the securities and
cash of each Portfolio.
TRANSFER AND DIVIDEND DISBURSING AGENT
Weston has selected Fund/Plan Services, Inc. to serve as its
transfer agent, dividend
disbursing agent, and as redemption agent for redemptions.
GENERAL OPERATIONS
Except as indicated above, Weston is responsible for the
payment of its expenses,
including: (a) the fees payable to the Advisor,
Administrator and the Distributor; (b) the
fees and expenses of Trustees who are not affiliated with
the Advisor or the Distributor;
(c) the fees and certain expenses of Weston's Custodian and
Transfer Agent; (d) the
charges and expenses of Weston's legal counsel and
independent accountants; (e) brokers'
commissions and any issue or transfer taxes chargeable to a
Portfolio in connection with
its securities transactions; (f) all taxes and corporate
fees payable by Weston to
governmental agencies; (g) the fees of any trade association
of which Weston is a member;
(h) the cost of stock certificates, if any, representing
shares of the Portfolio; (i)
reimbursements of the organization expenses of Weston and
the fees and expenses
involved in registering and maintaining registration of
Weston and its shares with the
Securities and Exchange Commission and registering Weston to
distribute its shares in and
qualifying its shares for sale under state securities laws,
and the preparation and printing of
Weston's registration statements and prospectuses for such
purposes; (j) allocable
communications expenses with respect to investor services
and all expenses of shareholder
and trustee meetings and of preparing, printing and mailing
prospectuses and reports to
shareholders; (k) litigation and indemnification expenses
and other extraordinary expenses
not incurred in the ordinary course of Weston's business;
and (l) compensation for
employees of Weston.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The New Century Capital Portfolio will declare and pay
annual dividends to its
shareholders, and the New Century I Portfolio will declare
and pay quarterly dividends to
its shareholders, of substantially all of its net investment
income, if any, earned during the
year from its investments, and each Portfolio will
distribute net realized capital gains, if
any, once each year. Expenses of the
20/68
Portfolios, including
the Advisory fee and the
Distributor's fee, are accrued each day. Reinvestment of
dividends and distributions in
additional shares of a Portfolio will be made on the payment
date at the net asset value
determined on the record date of the dividend or
distribution unless the shareholder has
elected in writing to receive dividends or distributions in
cash. An election may be changed
by notifying the Transfer Agent in writing fifteen days
prior to record date.
The Trust, and each Portfolio, intend to qualify as
regulated investment companies under
the Internal Revenue Code of 1986 (the "Code"). Such
qualification removes from the
Trust any liability for Federal income taxes upon the
portion of its income distributed to
shareholders and makes Federal income tax upon such
distributed income generated by the
Portfolios' investments the sole responsibility of the
shareholders. Continued qualification
requires the Trust to distribute to its shareholders each
year substantially all of its income
and capital gains. The Code imposes a non deductible, 4%
excise tax on regulated
investment companies that do not distribute to investors in
each calendar year, an amount
equal to (i) 98% of its calendar year ordinary income, (ii)
98% of its capital gain net
income (the excess of short and long-term capital gain over
short and long-term capital
loss) for the one-year period ending each October 31, and
(iii) 100% of any undistributed
ordinary or capital gain net income from the prior year.
Weston intends to declare and pay
dividends and capital gain distributions in a manner to
avoid imposition of the excise tax.
The Trust also proposes to comply with other requirements,
such as (1) appropriate
diversification of its portfolio of investments, (2)
realization of 90% of annual gross
income from dividends, interest, gains from sales of
securities, or other "qualifying
income," (3) realization of less than 30% of gross income
from gains on sale or other
disposition of securities held less than three months,
unless such a policy would be
disadvantageous to the Trust.
"The Trust" is a series trust. Each series of the Trust will
be treated as a separate trust for
Federal tax purposes. Any net capital gains recognized by a
Series will be distributed to its
investors without need to offset (for Federal tax purposes)
such gains against any net
capital losses of another series.
Any dividend or distribution to a shareholder shortly after
the purchase of a Portfolio's
shares will have the effect of reducing the net asset value
per share of such shares by the
amount of the dividend or distribution. While such payment
(whether made in cash or
reinvested in shares) is in effect a return of capital, it
may be subject to income taxes.
Regardless of the length of time Portfolio shares have been
owned by shareholders who
are subject to federal income taxes, distributions from long
term capital gains are taxable
as such. The net capital gain of individuals is taxed at the
maximum rate of 28%. The net
capital gain of corporations is taxed at the same rate as
ordinary corporate income.
The dividends paid by a Portfolio may qualify for the 70%
dividends received deduction
for corporations. Weston will provide an information return
to shareholders describing the
Federal tax status of the dividends paid by a Portfolio
during the preceding calendar year
within 60 days after the end of each year as required by
present tax law. Shareholders
should consult their tax advisors concerning the state or
local taxation of such dividends,
and the Federal, state and local taxation of capital gains
distributions. Corporate investors
should recognize that the investor must hold Portfolio
shares for more than 45 days to
qualify any dividends (or portion thereof) for the dividends
received deduction. Dividends
declared in December of any year to investors of record on
any date in December will be
deemed to have been received by the investors and paid by
the series on the record date,
provided such dividends are paid before February 1 of the
following year.
In accordance with law, the Trust may be required to
withhold a portion of dividends or
redemptions or capital gains paid to an investor and remit
such amount to the Internal
Revenue Service, if the investor fails to furnish Weston
with a correct taxpayer
identification number, if the investor fails to supply
Weston with a tax identification
number altogether, if the investor fails to make a required
certification, or if the Internal
Revenue Service notifies Weston to withhold a portion of
such distributions from an
investor's account. Certain entities, such as certain types
of trusts, may be exempt from
this withholding provided they file an appropriate exemption
certificate with Weston.
DETERMINATION OF NET ASSET VALUE
The net asset value of a Portfolio share is determined as of
5 p.m. Eastern time on each
day the New York Stock Exchange is open for unrestricted
trading from Monday through
Friday. The net asset value is determined by dividing the
value of the Portfolio's securities,
plus any cash and other assets, less all liabilities, by the
number of shares outstanding.
Expenses and fees of the Portfolio, including the advisory
and the distributor fees, are
accrued daily and taken into account for the purpose of
determining
21/68
the net asset value.
Each Portfolio will value redeemable securities issued by
open-end investment companies
at their respective net asset values last computed at 5 p.m.
A portfolio security listed or
traded on a securities exchange will be valued at the last
sale price on the security's
principal exchange on that day. Listed securities not traded
on an exchange that day, and
other securities which are traded in the over-the-counter
market, will be valued at the last
reported bid price in the market on that day, if any.
Securities for which market quotations
are not readily available and all other assets will be
valued at their respective fair market
value as determined in good faith by, or under procedures
established by, the Board of
Trustees.
Money market securities with less than sixty days remaining
to maturity when acquired by
a Portfolio will be valued on an amortized cost basis by a
Portfolio, excluding unrealized
gains or losses thereon from the valuation. This is
accomplished by valuing the security at
cost and then assuming a constant amortization to maturity
of any premium or discount. If
the Portfolio acquires a money market security with more
than sixty days remaining to its
maturity, it will be valued at current market value until
the 60th day prior to maturity, and
will then be valued on an amortized cost basis based upon
the value on such date unless
the Board determines during such 60 day period that this
amortized cost value does not
represent fair market value.
HOW TO PURCHASE SHARES
Each Portfolio offers its shares for sale to the public
through the Distributor and selected
dealers at the net asset value next computed after the
receipt of the purchase order by the
Transfer Agent. There is no sales charge. The minimum
initial investment in Portfolio
shares is $5,000.00, and each subsequent investment must be
not less than $100.00. (The
Portfolio may waive these minimums for qualified tax
sheltered retirement plans.)
To purchase shares of a Portfolio please complete the
application form and mail it
together with your check payable to Weston Portfolios to:
Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA 19428
Subsequent investments may be made at any time (minimum
additional investment
$100.00) by mailing a check, payable to Weston Portfolios to
the Transfer Agent at the
address above. Mail orders should include, when possible,
the "Invest by Mail" stub which
accompanies any Portfolio confirmation statement. The
Distributor may be reached at:
(617) 239-0445.
Each Portfolio reserves the right in its sole discretion (i)
to suspend the offering of its
shares, (ii) to reject purchase orders when in the best
interest of the Portfolio, (iii) to
reduce or waive the minimum for initial and subsequent
investments as set forth above.
Your purchase will be made in full and fractional shares of
the Portfolio calculated to three
decimal places. Shares are normally held in an open account
for shareholders by each
Portfolio, which will send to shareholders a statement of
shares owned at the time of each
transaction. Share certificates for full shares are, of
course, available at any time at written
request at no additional cost to the shareholder. No
certificates will be issued for fractional
shares.
HOW TO REDEEM SHARES
Shareholders may redeem their shares of the Portfolios
without charge on any day on
which the Portfolios calculate their net asset values (see
"Determination of Net Asset
Value"). Redemptions will be effective at the net asset
value per share next determined
after the receipt of a redemption request meeting the
requirements described below. The
Portfolios normally send redemption proceeds on the next
business day, but in any event
redemption proceeds are sent within seven days of receipt of
a redemption request in
proper form or earlier if requires under applicable law.
A written redemption request to the Transfer Agent must (i)
identify the Portfolio and the
shareholder's account number, (ii) state the number of
shares to be redeemed, and (iii) be
signed by each registered owner exactly as the shares are
registered. If the shares to be
redeemed were issued in certificate form, the certificates
must be endorsed for transfer (or
be accompanied by an endorsed
22/68
stock power) and must be
submitted to the Transfer
Agent together with the redemption request. A redemption
request for an amount in
excess of $5,000, or for any amount if for payment other
than to the shareholder of
record, or if the proceeds are to be sent elsewhere than the
address of record, must be
accompanied by signature guarantees. The guarantor of a
signature must be a national
bank or trust company (not a savings bank), a member bank of
the Federal Reserve
System or a member firm of a national securities exchange.
The Transfer Agent may
require additional supporting documents for redemptions made
by corporations,
executors, administrators, trustees and guardians. A
redemption request will not be
deemed to be properly received until the Transfer Agent
receives all required documents
in proper form. Questions with respect to the proper form
for redemption requests should
be directed to the Transfer Agent at the numbers listed on
the cover of this Prospectus.
Delivery of the proceeds of a redemption of shares purchased
and paid for by check
shortly before the receipt of the request may be delayed
until the Portfolio determines that
its Custodian Bank has completed collection of the purchase
check which may take up to
15 days. The Board of Trustees may suspend the right of
redemption or postpone the date
of payment during any period when (a) trading on the New
York Stock Exchange is
restricted as determined by the Securities and Exchange
Commission or such Exchange is
closed for other than weekends and holidays, (b) the
Securities and Exchange Commission
has by order permitted such suspension, or (c) an emergency,
as defined by rules of the
Commission, exists during which time the sale of portfolio
securities or valuation of
securities held by the Portfolio are not reasonably
practicable.
Shares may be redeemed by calling Weston at (1-617-235-0445)
if you have previously
submitted the telephone redemption form available from the
Portfolio. (Telephone
redemption will not be available for shares held in tax
qualified accounts, for amounts less
than $5,000, or for shares for which certificates are
outstanding.) The proceeds will be
paid to the registered share owner(s): (1) by mail at the
address specified on the
Telephone Redemption Form, or (2) by wire to the bank
account designated on the Form.
The Telephone Redemption Form must be completed by all
registered owners of an
account, and the signatures must be guaranteed as described
above. The Portfolio or its
Distributor may cancel the telephone redemption privilege at
any time without prior
notice, and may require the use of written redemption
procedures when deemed necessary
to protect the Portfolio and its shareholders. Note that
Weston will not be responsible for
any losses resulting from unauthorized transactions if it
follows reasonable procedures
designed to verify the identity of the caller. Weston will
request personalized security
codes or other information, and may also record calls. You
should verify the accuracy of
your transaction statements immediately after you receive
them.
Each Portfolio also reserves the right to redeem an
investor's account where the account is
worth less than the minimum initial investment required when
the account is established,
presently $5,000. (Any redemption of shares from an inactive
account established with a
minimum investment may reduce the account below the minimum
initial investment, and
could subject the account to such redemption). The Portfolio
will advise the shareholder
of such intention in writing at least sixty (60) days prior
to effecting such redemption,
during which time the shareholder may purchase additional
shares in any amount necessary
to bring the account back to $5,000, and the Portfolio will
not redeem an investor's
account which is worth less than $5,000 solely on account of
a market decline.
If the Board determines that it would be detrimental to the
best interest of the remaining
shareholders of a Portfolio to make payment in cash, the
Portfolio may pay the redemption
price in whole or in part by distribution in kind of
securities from the Portfolio. Such
securities will be valued on the basis of the procedures
used to determine the net asset
value at the time of the redemption. If shares are redeemed
in kind, the redeeming
shareholder may be required to comply with normal procedures
to redeem shares of an
underlying fund, or incur either normal processing delays or
brokerage costs in converting
the assets into cash.
SPECIAL PLANS
Each Portfolio also offers its shares for use in certain Tax
Sheltered (such as IRA, Keogh,
401(k) and 403(b)(7) plans) and Withdrawal Plans.
Information on these Plans is available
from the Portfolios' Distributor or by reviewing the
Statement of Additional Information.
Exchange Privilege. Shareholders of a Portfolio may exchange
all or part of their shares
into any other Portfolio, at net asset value. Shares of a
Portfolio are available only in states
where such shares may lawfully be sold. The amount invested
must equal or exceed the
required minimum investment of the series which is
purchased. A shareholder requesting
an exchange will be sent a
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current prospectus and an
exchange authorization form to
authorize the exchange. No fees are charged for the exchange
privilege. To exchange
shares, shareholders should contact the Portfolios'
Distributor.
Exchanges may also be effected by telephone request to
Weston (1-617-239-0445) if you
have previously submitted the telephone exchange option
available from the Portfolio.
Note that Weston will not be responsible for any losses
resulting from unauthorized
transactions if it follows reasonable procedures designed to
verify the identity of the caller.
Weston will request personalized security codes or other
information, and may also record
calls. You should verify the accuracy of your transaction
statements immediately after you
receive them.
An exchange, for tax purposes, constitutes the sale of one
Portfolio and the purchase of
another. The sale may involve either a capital gain or loss
to the shareholder for federal
income tax purposes.
The exchange privilege is subject to termination and its
terms are subject to change.
24/68
APPENDIX
DESCRIPTION OF VARIOUS SECURITIES INVESTED IN, AND
INVESTMENT
TECHNIQUES EMPLOYED BY, MUTUAL FUNDS IN WHICH WESTON MAY
INVEST.
Illiquid and Restricted Securities. An underlying fund may
invest not more than 10% of its
net assets in securities for which there is no readily
available market ("illiquid securities")
which would include securities the disposition of which
would be subject to legal
restrictions (so-called "restricted securities") and
repurchase agreements having more than
seven days to maturity. A considerable period of time may
elapse between an underlying
fund's decision to dispose of such securities and the time
when the fund is able to dispose
of them, during which time the value of the securities (and
therefore the value of the
underlying fund's shares held by a Portfolio) could decline.
Foreign Securities. An underlying fund may invest up to 100%
of its assets in securities of
foreign issuers. There may be less publicly available
information about these issuers than is
available about companies in the U.S. and foreign auditing
requirements may not be
comparable to those in the exchange rates between foreign
currencies and the U.S. dollar,
as well as other political and economic developments,
including the possibility of
expropriation, confiscatory taxation, exchange controls or
other foreign governmental
restrictions. Under the 1940 Act an underlying fund may
maintain its foreign securities in
custody of non U.S. banks and securities depositories.
Foreign Currency Transactions. In connection with its
portfolio transactions in securities
traded in a foreign currency, an underlying fund may enter
into forward contracts to
purchase or sell an agreed upon amount of a specific
currency at a future date which may
be any fixed number of days from the date of the contract
agreed upon by the parties at a
price set at the time of the contract. Under such an
agreement, concurrently with the entry
into a contract to acquire a foreign security for a
specified amount of currency, the fund
would purchase with U.S. dollars the required amount of
foreign currency for delivery at
the settlement date of the purchase; the fund would enter
into similar forward currency
transactions in connection with the sale of foreign
securities. The effect of such
transactions would be to fix a U.S. dollar price for the
security to protect against a
possible loss resulting from an adverse change in the
relationship between the U.S. dollar
and the subject foreign currency during the period between
the date the security is
purchased or sold and the date on which payment is made or
received, the normal range of
which is three to fourteen days. These contracts are traded
in the interbank market
conducted directly between currency traders (usually large
commercial banks) and their
customers. A forward contract generally has no deposit
requirement and no commissions
are charged at any stage for trades. Although such contracts
tend to minimize the risk of
loss due to a decline in the value of the subject currency,
they tend to limit
commensurately any potential gain which might result should
the value of such currency
increase during the contract period.
Industry Concentration. An underlying fund may concentrate
its investments within one
industry. Because the scope of investment alternatives
within an industry is limited, the
value of the shares of such an underlying fund may be
subject to greater market fluctuation
than an investment in a fund which invests in a broader
range of securities.
Master Demand Notes. Although the Portfolios themselves will
not do so, underlying
funds (particularly money market mutual funds) may invest up
to 100% of their assets in
master demand notes. Master demand notes are unsecured
obligations of U.S.
corporations redeemable upon notice that permit investment
by a fund of fluctuating
amounts at varying rates of interest pursuant to direct
arrangements between the fund and
the issuing corporation. Because they are direct
arrangements between the fund and the
issuing corporation, there is no secondary market for the
notes. However, they are
redeemable at face value, plus accrued interest, at any
time.
Repurchase Agreements. Underlying funds, particularly money
market mutual funds may
enter into repurchase agreements with banks and broker-
dealers under which they acquire
securities subject to an agreement with the seller to
repurchase the securities at an agreed
upon time and price. The Funds also may enter into
repurchase agreements. These
agreements are considered under the 1940 Act to be loans by
the purchaser collateralized
by the underlying securities. If the seller should default
on its obligation to repurchase the
securities, the underlying fund may experience delay or
difficulties in exercising its rights
to realize upon the securities held as collateral and might
incur a loss if the value of the
securities should decline. For a more complete discussion of
repurchase agreements see
"Investment Policies" in the SAI.
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Loans of Portfolio Securities. An underlying fund may lend
its portfolio securities
provided: (1) the loan is secured continuously by collateral
consisting of U.S. Government
securities or cash or cash equivalents maintained on a daily
mark-to-market basis in an
amount at least equal to the current market value of the
securities loaned; (2) the fund may
at any time call the loan and obtain the return of the
securities loaned; (3) the fund will
receive any interest or dividends paid on the loaned
securities; and (4) the aggregate
market value of securities loaned will not at any time
exceed one-third of the total assets
of the fund. Loans of securities involve a risk that the
borrower may fail to return the
securities or may fail to provide additional collateral.
Short Sales. An underlying fund may sell securities short.
In a short sale, the fund sells
stock which it does not own, making delivery with securities
"borrowed" from a broker.
The fund is then obligated to replace the security borrowed
by purchasing it at the market
price at the time of replacement. This price may or may not
be less than the price at which
the security was sold by the fund. Until the security is
replaced, the fund is required to pay
to the lender any dividends or interest which accrue during
the period of the loan. In order
to borrow the security, the fund may also have to pay a
premium which would increase the
costs of the security sold. The proceeds of the short sale
will be retained by the broker, to
the extent necessary to meet margin requirements, until the
short position is closed out.
The fund also must deposit in an segregated account an
amount of cash or U.S.
Government securities equal to the difference between (a)
the market value of the
securities sold short at the time they were sold short and
(b) the value of the collateral
deposited with the broker in connection with the short sale
(not including the proceeds
from the short sale). While the short position is open, the
fund must maintain daily the
segregated account at such a level that (1) the amount
deposited in it plus the amount
deposited with the broker as collateral equals the current
market value of the securities
sold short and (2) the amount deposited in it plus the
amount deposited with the broker as
collateral is not less than the market value of the
securities at the time they were sold
short. Depending upon market conditions, up to 80% of the
value of a fund's net assets
may be deposited as collateral for the obligation to replace
securities borrowed to effect
short sales and allocated to a segregated account in
connection with short sales.
The fund will incur a loss as a result of the short sale if
the price of the security increases
between the date of the short sale and the date on which the
fund replaced the borrowed
security. The fund will realize a gain if the security
declines in price between those dates.
The amount of any gain will be decreased and the amount of
any loss increased by the
amount of any premium, dividend or interest the fund may be
required to pay in
connection with a short sale.
A short sale is "against the box" if at all times when the
short position is open the fund
owns an equal amount of the securities or securities
convertible into, or exchangeable
without further consideration for, securities of the same
issue as the securities sold short.
Such a transaction serves to defer a gain or loss for
Federal Income tax purposes.
Options Activities. An underlying fund may write (i.e.,
sell) listed call options ("calls") if
the calls are "covered" throughout the life of the option. A
call is "covered" if the fund
owns the optioned securities. When a fund writes a call, it
receives a premium and gives
the purchaser the right to buy the underlying security at
any time during the call period
(usually not more than nine months in the case of common
stock) at a fixed exercise price
regardless of market price changes during the call period.
If the call is exercised, the fund
will forgo any gain from an increase in the market price of
the underlying security over the
exercise price.
A fund may purchase a call on securities only to effect a
"closing purchase transaction"
which is the purchase of a call covering the same underlying
security and having the same
exercise price and expiration date as a call previously
written by the fund on which it
wishes to terminate its obligation. If the fund is unable to
effect a closing purchase
transaction, it will not be able to sell the underlying
security until the call previously
written by the fund expires (or until the call is exercised
and the fund delivers the
underlying security).
An underlying fund also may write and purchase put options
("puts"). When a fund writes
a put, it receives a premium and gives the purchaser of the
put the right to sell the
underlying security to the fund at the exercise price at any
time during the option period.
When a fund purchases a put, it pays a premium in return for
the right to sell the
underlying security at the exercise price at any time during
the option period. An
underlying fund also may purchase stock index puts which
differ from puts on individual
securities in that they are settled in cash based on the
values of the securities in the
underlying index rather than by delivery of the
26/68
underlying
securities. Purchase of a stock
index put is designed to protect against a decline in the
value of the portfolio generally
rather than an individual security in the portfolio. If any
put is not exercised or sold, it will
become worthless on its expiration date.
A fund's option positions may be closed out only on an
exchange which provides a
secondary market for options of the same series, but there
can be no assurance that a
liquid secondary market will exist at a given time for any
particular option. In this regard,
trading in options on certain securities (such as U.S.
Government securities) is relatively
new so that it is impossible to predict to what extent
liquid markets will develop or
continue.
The underlying fund's custodian, or a securities depository
acting for it, generally acts as
escrow agent as to the securities on which the fund has
written puts or calls, or as to other
securities acceptable for such escrow so that no margin
deposit is required of the fund.
Until the underlying securities are released from escrow,
they can not be sold by the fund.
In the event of a shortage of the underlying securities
deliverable on exercise of an option,
the Options Clearing Corporation has the authority to permit
other, generally comparable
securities to be delivered in fulfillment of option exercise
obligations. If the Options
Clearing Corporation exercises its discretionary authority
to allow such other securities to
be delivered, it may also adjust the exercise prices of the
affected options by setting
different prices at which otherwise ineligible securities
may be delivered.
As an alternative to permitting such substitute deliveries,
the Options Clearing
Corporation may impose special exercise settlement
procedures.
Futures Contracts. An underlying fund may enter into futures
contracts for the purchase or
sale of debt securities and stock indices. A futures
contract is an agreement between two
parties to buy and sell a security or an index for a set
price on a future date. Futures
contracts are traded on designated "contract markets" which,
through their clearing
corporations, guarantee performance of the contracts.
Generally, if market interest rates increase, the value of
outstanding debt securities
declines (and vice versa). Entering into a futures contract
for the sale of securities has an
effect similar to the actual sale of securities, although
sale of the futures contract might be
accomplished more easily and quickly. For example, if a fund
holds long-term U.S.
Government securities and it anticipates a rise in long-term
interest rates, it could, in lieu
of disposing of its portfolio securities, enter into futures
contracts for the sale of similar
long term securities. If rates increased and the value of
the fund's portfolio securities
declined, the value of the fund's futures contracts would
increase, thereby protecting the
fund by preventing net asset value from declining as much as
it otherwise would have.
Similarly, entering into futures contracts for the purchase
of securities has an effect similar
to the actual purchase of the underlying securities, but
permits the continued holding of
securities other than the underlying securities. For
example, if the fund expects long-term
interest rates to decline, it might enter into futures
contracts for the purchase of long-term
securities so that it could gain rapid market exposure that
may offset anticipated increases
in the cost of securities it intends to purchase while
continuing to hold higher-yield short-
term securities or waiting for the long-term market to
stabilize.
A stock index futures contract may be used to hedge an
underlying fund's portfolio with
regard to market risk as distinguished from risk relating to
a specific security. A stock
index futures contract does not require the physical
delivery of securities, but merely
provides for profits and losses resulting from changes in
the market value of the contract
to be credited or debited at the close of each trading day
to the respective accounts of the
parties to the contract. On the contract's expiration date,
a final cash settlement occurs.
Changes in the market value of a particular stock index
futures contract reflect changes in
the specified index of equity securities on which the future
is based.
There are several risks in connection with the use of
futures contracts. In the event of an
imperfect correlation between the futures contract and the
portfolio position which is
intended to be protected, the desired protection may not be
obtained and the fund may be
exposed to risk of loss. Further, unanticipated changes in
interest rates or stock price
movements may result in a poorer overall performance for the
fund than if it had not
entered into any futures on debt securities or stock index.
In addition, the market prices of futures contracts may be
effected by certain factors. First,
all participants in the futures market are subject to margin
deposit and maintenance
requirements. Rather than meeting additional margin deposit
requirements, investors
27/68
may
close futures contracts through offsetting transactions
which could distort the normal
relationship between the securities and futures markets.
Second, from the point of view of
speculators, the deposit requirements in the futures market
are less onerous than margin
requirements in the securities market. Therefore, increased
participation by speculators in
the futures market may also cause temporary price
distortions.
Finally, positions in futures contracts may be closed out
only on an exchange or board of
trade which provides a secondary market for such futures.
There is no assurance that a
liquid secondary market on an exchange or board of trade
will exist for any particular
contract or at any particular time.
Options on Futures Contracts. A fund also may purchase and
sell listed put and call
options on futures contracts. An option on a futures
contract gives the purchaser the right,
in return for the premium paid, to assume a position in a
future contract (a long position if
the option is a call and a short position if the option is a
put), at a specified exercise price
at any time during the option period. When an option on a
futures contract is exercised,
delivery of the futures position is accompanied by cash
representing the difference
between the current market price of the futures contract and
the exercise price of the
option. The fund may purchase put options on futures
contracts in lieu of, and for the
same purpose as a sale of a futures contract. It also may
purchase such put options in
order to hedge a long position in the underlying futures
contract in the same manner as it
purchases "protective puts" on securities.
As with options on securities, the holder of an option may
terminate his position by selling
an option of the same series. There is no guarantee that
such closing transactions can be
effected. The fund is required to deposit initial margin and
maintenance margin with
respect to put and call options on futures contracts written
by it pursuant to brokers'
requirements similar to those applicable to futures
contracts described above and, in
addition, net option premiums received will be included as
initial margin deposits.
In addition to the risks which apply to all options
transactions, there are several special
risks relating to options on futures contracts. The ability
to establish and close out
positions on such options will be subject to the development
and maintenance of a liquid
secondary market. It is not certain that this market will
develop. Compared to the use of
futures contracts, the purchase of options on futures
contracts involves less potential risk
to the fund because the maximum amount at risk is the
premium paid for the options (plus
transaction costs). However, there may be circumstances when
the use of an option on a
futures contract would result in a loss to the fund when the
use of a futures contract
would not, such as when there is no movement in the prices
of the underlying securities.
Writing an option on a futures contract involves risks
similar to those arising in the sale of
futures contracts, as described above.
Leverage through Borrowing. An underlying fund may borrow up
to 25% of the value of
its net assets on an unsecured basis from banks to increase
its holdings of portfolio
securities. Under the 1940 Act, the fund is required to
maintain continuous asset coverage
of 300% with respect to such borrowings and to sell (within
three days) sufficient
portfolio holdings to restore such coverage if it should
decline to less than 300% due to
market fluctuations or otherwise, even if disadvantageous
from an investment standpoint.
Leveraging will exaggerate the effect of any increase or
decrease in the value of portfolio
securities on the fund's net asset value, and money borrowed
will be subject to interest
costs (which may include commitment fees and/or the cost of
maintaining minimum
average balances) which may or may not exceed the interest
and option premiums received
from the securities purchased with borrowed funds.
Warrants. An underlying fund may invest in warrants, which
are options to purchase
equity securities at specific prices valid for a specific
period of time. The prices do not
necessarily move parallel to the prices of the underlying
securities. Warrants have no
voting rights, receive no dividends and have no rights with
respect to the assets of the
issuer. If a warrant is not exercised within the specified
time period, it will become
worthless and the fund will lose the purchase price and the
right to purchase the
underlying security.
DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's")
description of its four highest
bond ratings: Aaa--judged to be the best quality. They carry
the smallest degree of
investment risk; Aa--judged to be of high quality by all
standards. Together with the Aaa
group they comprise what are generally known as high grade
bonds; A--possess many
favorable investment attributes and are to be
28/68
considered as
"upper medium grade
obligations"; Baa--considered as medium grade obligations,
i.e., they are neither highly
protected nor poorly secured. Interest payments and
principal security appear adequate for
the present but certain protective elements may be lacking
or may be characteristically
unreliable over any great length of time; Ba--judged to have
speculative elements, their
future cannot be considered as well assured; B--generally
lack characteristics of the
desirable investment; Caa--are of poor standing. Such issues
may be in default or there
may be present elements of danger with respect to principal
or interest; Ca--speculative in
a high degree; often in default; C--lowest rated class of
bonds; regarded as having
extremely poor prospects.
Moody's also supplies numerical indicators 1, 2 and 3 to
rating categories. The modifier 1
indicates that the security is in the higher end of its
rating category; the modifier 2
indicates a mid-range ranking; and 3 indicates a ranking
toward the lower end of the
category.
Excerpts from Standard & Poor's Corporation ("S&P")
description of its five highest bond
ratings: AAA--highest grade obligations. Capacity to pay
interest and repay principal is
extremely strong; AA--also qualify as high grade
obligations. A very strong capacity to
pay interest and repay principal and differs from AAA issues
only in a small degree; A--
regarded as upper medium grade. They have a strong capacity
to pay interest and repay
principal although it is somewhat more susceptible to the
adverse effects of changes in
circumstances and economic conditions than debt in higher
rated categories; BBB--
regarded as having an adequate capacity to pay interest and
repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and
repay principal for debt in this category than in higher
rated categories. This group is the
lowest which qualifies for commercial bank investment. BB,
B, CCC, CC--predominantly
speculative with respect to capacity to pay interest and
repay principal in accordance with
terms of the obligations; BB indicates the lowest degree of
speculation and CC the
highest.
S&P applies indicators "+", no character, and "-" to its
rating categories. The indicators
show relative standing within the major rating categories.
29/68
INVESTMENT ADVISOR
Weston Financial Group, Inc.
20 William Street
Wellesley, MA 02181
DISTRIBUTOR
Weston Securities Corp.
20 William Street
Wellesley, MA 02181
CUSTODIAN
The Bank of New York
New York, New York
TRANSFER AGENT
Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA. 19428
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102-1707
30/68
WESTON PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION DATED February 29, 1996
20 William Street, Wellesley, Massachusetts 02181
The Distributor may be telephoned at (617) 239-0445
A copy of the Prospectus of Weston Portfolios ("the Trust")
is available without charge
upon written request to the Fund.
the Fund is an open-end diversified investment company
currently offering two series of
shares each a Portfolio: New Century Capital Portfolio and
New Century I Portfolio. The
shares of each Portfolio may be purchased or redeemed at any
time. Purchases and
redemptions will be effected at net asset value next
computed after the receipt of the
investor's request.
The objective of the New Century Capital Portfolio is
capital growth, with the secondary
objective being income while managing risk. The objective of
the New Century I Portfolio
is income, with the secondary objective being growth while
managing risk. The Portfolios
will use a variety of investment strategies in an effort to
balance portfolio risks and to
hedge market risks. There can be no assurance that the
objectives of the Portfolios will be
achieved.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS
AND SHOULD BE READ IN CONNECTION WITH WESTON'S PROSPECTUS
DATED FEBRUARY 29, 1996. RETAIN THIS STATEMENT OF ADDITIONAL
INFORMATION FOR FUTURE REFERENCE.
31/68
TABLE OF CONTENTS
THE FUND'S INVESTMENTS
Page
Rising Trend Strategy 3
Declining Trend Strategy 3
Other Factors 3
Investment Company Securities 3
Money Market Securities 4
Portfolio Turnover 5
INVESTMENT RESTRICTIONS 5
INVESTMENT ADVISOR 5
DISTRIBUTOR 6
ALLOCATION OF PORTFOLIO BROKERAGE 6
TRANSFER AGENT 7
PURCHASE OF SHARES 7
Tax-Sheltered Retirement Plans 7
Systematic Withdrawal Plan 8
OFFICERS AND TRUSTEES OF WESTON 9
GENERAL INFORMATION 10
Audits and Reports 10
Custodian 10
PERFORMANCE 10
FINANCIAL STATEMENTS 13
32/68
WESTON PORTFOLIOS INVESTMENTS
Each Portfolio seeks to achieve its objective by
concentrating in shares of investment
companies and by making other investments selected in
accordance with the Portfolio's
investment restrictions and policies. Each Portfolio will
vary its investment strategy as
described in the Portfolios' prospectus to seek to achieve
its objective. This Statement of
Additional Information contains further information
concerning the techniques and
operations of each Portfolio, the securities in which it
will invest, and the policies it will
follow.
Rising Trend Strategy
During periods when the Portfolios' investment advisor
Weston Financial Group, Inc. (the
"Advisor") determines that there is a rising trend in the
securities markets, it will seek to
achieve the Portfolios' investment objective by
concentrating in a portfolio of shares of
investment companies which the advisor believes will benefit
from such a trend. The
Advisor will use a risk adjusted analysis (which considers
the relative volatility of its
various investments) to evaluate the investment companies'
performance under various
market conditions and to consider the potential reward and
potential risk. The Advisor
will not select such investment companies based solely upon
their previous performance.
(See "Investments in Investment Companies and the Investment
Company Industry" in the
prospectus.) In order to make allowance for cash flow needs
of each Portfolio or when a
Portfolio is otherwise pursuing appreciation, a Portfolio
may also invest up to 75% of its
asset value in other investment vehicles such as common or
preferred stocks of companies
which are not investment companies, investment companies
which are money market
funds, cash equivalents, or may hold its assets as cash.
Though not required by its policies
to do so, Weston may make such investments, if necessary, to
qualify as a "regulated
investment company" under the Internal Revenue Code (the
"IRC"). (See "Dividends,
Distributions and Taxes" in the prospectus for a discussion
of qualification under sub
chapter M of the IRC.)
Declining Trend Strategy
The primary emphasis of the New Century Capital Portfolio is
on capital growth over
income and for the New Century I Portfolio is on income over
growth. Nevertheless,
when the Advisor determines that there is a generally
declining trend in the securities
markets, it may seek to reduce risk by investing some or all
of either Portfolio in
investments, including investment company securities, which
are believed by the manager
to present a lower degree of risk. During such periods, the
Fund may recognize a more
conservative strategy to achieving its objective. The
primary objective of the respective
portfolios will remain that of capital growth over income
and income over growth while
managing risk. The extent of the restructuring of the
Portfolio during these periods will
depend upon the advisor's opinion as to the extent of the
market decline and relative risk
of these investments.
Other Factors
Each Portfolio also seeks to protect the value of an
investment in Weston when volatile or
abnormal market conditions are anticipated (as indicated by
rapidly accelerating inflation
or interest rates, sharply declining stock markets,
increasing deterioration in the banking
situation and/or increasing threats to national or world
security). This will involve the
selection of high proportions, up to 100%, of temporary
defensive investments such as
U.S. Government securities or other money market securities
(see "Money Market
Securities"), the use of very short portfolio maturities of
60 days or less, other investments
which protect the value of the series, and similar
techniques such as holding cash.
Investment Company Securities
The other investment companies in which each Portfolio
invests will be diversified
investment companies managed by a number of investment
advisors and portfolio
managers. This will offer each Portfolio an opportunity to
benefit from a variety of
diversified portfolios.
Each such company will be a registered investment company,
and will operate subject to a
variety of regulatory constraints. While such regulation
does not guarantee the investment
success of an investment company, or assure that it will not
suffer investment
33/68
losses, the
Advisor believes that such investment companies provide a
sound foundation upon which
to base an investment portfolio. By investing in a broad
spectrum of such companies each
Portfolio hopes to benefit from the collective research and
analysis of many experienced
investment personnel.
There are many types of investment companies. All maintain
portfolios which are generally
liquid, but can be composed of different kinds of securities
and involve different
objectives. Such companies may seek only income, only
appreciation, or various
combinations of these. They may invest in money market
securities, short or long term
bonds, dividend producing stocks, tax-exempt municipal
securities, or a variety of other
instruments. They may seek speculative or conservative
investments ranging from
securities issued by new companies to securities issued by
"blue-chip" companies. An
investment company which has a policy of holding 80% of its
assets in debt securities
maturing in thirteen months or less, or which holds itself
out as a "money market fund"
will be treated as a money market fund by Weston.
The Advisor will be responsible for monitoring and
evaluating these kinds of factors to
select investment company fund securities for each of the
Portfolios in accordance with
the policies and techniques described in the prospectus.
Money Market Securities
Although each Portfolio intends to concentrate its
investments in registered investment
company securities, each Portfolio may invest its assets
directly in money market securities
whenever deemed appropriate by the advisor to achieve the
Portfolio's investment
objective. It may invest without limitation in such
securities on a temporary basis for
defensive purposes.
Securities issued or guaranteed as to principal and interest
by the United States
government ("Government Securities") include a variety of
Treasury securities, which
differ in their interest rates, maturities and date of
issue. Treasury bills have a maturity of
one year or less; Treasury notes have maturities of one to
ten years; Treasury bonds
generally have a maturity of greater than five years. The
Portfolios will only acquire
Government Securities which are supported by the "full faith
and credit" of the United
States. Securities which are backed by the full faith and
credit of the United States include
Treasury bills, Treasury notes, Treasury bonds, and
obligations of the Government
National Mortgage Association, the Farmers Home
Administration, and the Export-
Import Bank. The Portfolio's direct investments in money
market securities will generally
favor securities with shorter maturities (maturities of less
than 60 days) which are less
affected by price fluctuations than those with longer
maturities.
Certificates of deposit are certificates issued against
funds deposited in a commercial bank
or a savings and loan association for a definite period of
time and earning a specified
return. Bankers' acceptances are negotiable drafts or bills
of exchange, normally drawn by
an importer or exporter to pay for specific merchandise,
which are "accepted" by a bank,
meaning, in effect, that the bank unconditionally agrees to
pay the face value of the
instrument on maturity. Investments in bank certificates of
deposit and bankers'
acceptances are limited to domestic banks and savings and
loan associations that are
members of the Federal Deposit Insurance Corporation or
Federal Savings and Loan
Insurance Corporation having total assets in excess of five
hundred million dollars
("Domestic Banks").
Investments in prime commercial paper may be made in notes,
drafts, or similar
instruments payable on demand or having a maturity at the
time of issuance not exceeding
nine months, exclusive of days of grace, or any renewal
thereof payable on demand or
having a maturity likewise limited.
Under a repurchase agreement the Portfolio acquires a debt
instrument for a relatively
short period (usually not more than one week) subject to the
obligation of the seller to
repurchase and the Portfolio to resell such debt instrument
at a fixed price. The Portfolio
will enter into repurchase agreements only with banks which
are members of the Federal
Reserve System, or securities dealers who are members of a
national securities exchange
or are market makers in government securities and in either
case, only where the debt
instrument collateralizing the repurchase agreement is a
U.S. Treasury or agency
obligation supported by the full faith and credit of the
U.S. A repurchase agreement may
also be viewed as the loan of money by the Portfolio to the
seller. The resale price
specified is normally in excess of the purchase price,
reflecting an agreed upon interest
rate. The rate is effective for the period of time the
Portfolio is invested in the agreement
and may not be related to the coupon rate on the underlying
security. The term of these
repurchase agreements will usually be short (from overnight
to one week) and at no time
will the Portfolio invest
34/68
in repurchase agreements of more
than sixty days. The securities
which are collateral for the repurchase agreements, however,
may have maturity dates in
excess of sixty days from the effective date of the
repurchase agreement. The Portfolio
will always receive, as collateral, securities whose market
value, including accrued
interest, will be at least equal to 10% of the dollar amount
to be paid to the Portfolio
under each agreement at its maturity, and the Portfolio will
make payment for such
securities only upon physical delivery or evidence of book
entry transfer to the account of
the Custodian. If the seller defaults, the Portfolio might
incur a loss if the value of the
collateral securing the repurchase agreement declines, and
might incur disposition costs in
connection with liquidation of the collateral. In addition,
if bankruptcy proceedings are
commenced with respect to the seller of the security,
collection of the collateral by the
Portfolio may be delayed or limited. The Portfolio may not
enter into a repurchase
agreement with more than seven days to maturity if, as a
result, more than 10% of the
market value of the Portfolio's net assets would be invested
in such repurchase agreements
together with any other illiquid assets.
Portfolio Turnover
It is not the policy of the Portfolios to purchase or sell
securities for short-term trading
purposes, but each Portfolio of Weston may sell securities
to recognize gains or avoid
potential for loss. A Portfolio of the Trust will, however,
sell any portfolio security
(without regard to the time it has been held) when the
Advisor believes that market
conditions, credit worthiness factors or general economic
conditions warrant such a step.
Each Portfolio of the Trust presently estimates that its
annualized portfolio turnover rate
generally will not exceed 200%. High portfolio turnover
might involve additional
transaction costs (such as brokerage commissions or sales
charges) which are borne by the
Portfolio, or adverse tax effects. (See "Dividends,
Distributions and Taxes" in the
prospectus.)
INVESTMENT RESTRICTIONS
In addition to those set forth in Weston's current
Prospectus, Weston has adopted the
Investment Restrictions set forth below for each Portfolio,
which cannot be changed
without the approval of a majority of the outstanding voting
securities of each Portfolio.
As provided in the Investment Company Act of 1940 (the "1940
Act") a "vote of a
majority of the outstanding voting securities" of the
Portfolio means the affirmative vote
of the lesser of (i) more than 50% of the outstanding shares
of the Portfolio or (ii) 67% or
more of the shares present at a meeting if more than 50% of
the outstanding shares are
represented at the meeting in person or by proxy. These
investment restrictions provide
that the Portfolios will not:
(1)issue senior securities.
(2)engage in the underwriting of securities except
insofar as the Portfolio may
be deemed an underwriter
under the Securities Act of 1933 in disposing of a
portfolio security.
(3)purchase or sell real estate or interests therein,
although it may purchase
securities of issuers which
engage in real estate operations and securities which are
secured by real estate or interests
therein.
(4)invest for the purpose of exercising control or
management of another
company.
(5)purchase oil, gas or other mineral leases, rights
or royalty contracts or
exploration or development
programs, except that the Portfolio may invest in
the securities of
companies which invest in or sponsor
such programs.
(6)concentrate its investments in any industry other
than registered investment
companies.
(7)make purchases of securities on "margin."
(8)sell securities short.
With respect to investment restriction (6) above, although
Weston may not concentrate in
a particular industry other than registered investment
companies, it may concentrate in
investment companies which concentrate in a particular
industry. As a
35/68
result, Weston may
concentrate in an industry indirectly by virtue of its
investments. So long as percentage
restrictions are observed by each Portfolio at the time it
purchases any security, changes in
values of particular Portfolio assets or the assets of the
Portfolio as a whole will not cause
a violation of any of the foregoing restrictions.
INVESTMENT ADVISOR
A separate Investment Advisory Agreement between Weston and
the Advisor on behalf of
each Portfolio of the Fund was initially approved (on
February 28, 1990) for a term of two
years. The Agreements continue in effect from year to year
thereafter only if such
continuance is approved annually by either The Fund's Board
of Trustees or by a vote of a
majority of the outstanding voting securities of the
respective Portfolio of The Fund and in
either case by the vote of a majority of the Trustees who
are not parties to the Agreement
or interested persons (as such term is defined in the
Investment Company Act of 1940, as
amended) of any party to the Agreement, voting in person at
a meeting called for the
purpose of voting on such approval. The Agreement may be
terminated at any time
without penalty by The Fund's Board of Trustees or by a
majority vote of the outstanding
shares of The Fund, or by the Advisor, in each instance on
not less than 60 days written
notice and shall automatically terminate in the event of its
assignment. For the fiscal years
ended October 31, 1995,1994 and 1993, the Advisor received
fees related to its
management of the New Century I Portfolio and the New
Century Capital Portfolio of
$260,474 and $416,611; $232,680 and $381,083; and $207,257
and $377,855,
respectively. For the fiscal years ended October 31,
1995,1994 and 1993, the Advisor
received fees related to administrative services provided to
the New Century I Portfolio
and the New Century Capital Portfolio of $40,742 and $65,275
; $39,832 and $65,011;
and $36,298 and $66,158, respectively.
The officers and trustees of the Advisor and their positions
held with Weston are as
follows: I. Richard Horowitz, President; Douglas A. Biggar,
Executive Vice President and
Clerk (President and a Trustee of the Fund); and Joseph
Robbat, Jr., Chief Executive
Officer and Treasurer (a Trustee of the Fund).
DISTRIBUTOR
Pursuant to separate Distribution Agreements between Weston
and Weston Securities
Corp. (the "Distributor" on behalf of each Portfolio, the
expenses of printing all sales
literature, including prospectuses, are to be borne by the
Distributor. The Distribution
Agreement for each Portfolio provides that it will continue
in effect from year to year only
so long as such continuance is specifically approved at
least annually by either The Fund's
Board of Trustees or by a vote of a majority of the
outstanding voting securities of the
respective Portfolio of The Fund and in either case by the
vote of a majority of the trustees
who are 12b-1 Trustees as that term is defined in the
prospectus, voting in person at a
meeting called for the purpose of voting on such approval.
The agreements will terminate
automatically in the event of their assignment. Under the
Distribution Agreements, the
Distributor is the exclusive agent for the Portfolios'
shares, and has the right to select
selling dealers to offer the shares to investors. For the
fiscal year ended October 31, 1995,
the Distributor received the following fees from the Fund
for costs incurred in connection
with the distribution of the shares of each portfolio: the
New Century I Portfolio, $35,857;
the New Century Capital Portfolio, $66,871. The principal
expenses incurred during the
stated period were for administration staff and advertising.
ALLOCATION OF PORTFOLIO BROKERAGE
The Advisor, in effecting the purchases and sales of
portfolio securities for the account of
the Fund, will seek execution of trades either (i) at the
most favorable and competitive rate
of commission charged by any broker, dealer or member of an
exchange, or (ii) at a higher
rate of commission charges if reasonable in relation to
brokerage and research services
provided to The Fund or the Advisor by such member, broker,
or dealer. Such services
may include, but are not limited to, any one or more of the
following: Information as to
the availability of securities for purchase or sale;
statistical or factual information or
opinions pertaining to investments. The Advisor may use
research and services provided
to it by brokers and dealers in servicing all its clients,
however, not all such services will be
used by the Advisor in connection with the Fund. Fund orders
may be placed with an
affiliated broker-dealer, and in such case, the Distributor
will receive brokerage
commissions. However, portfolio orders will be placed with
the Distributor only where the
price being charged and the services being provided compare
favorably with those which
35/68
would be charged to the Fund by non-affiliated broker-
dealers, and with those charged by
the Distributor to other unaffiliated customers, on
transactions of a like size and nature.
Brokerage may also be allocated to dealers in consideration
of Weston share distribution
but only when execution and price are comparable to that
offered by other brokers. The
Distributor is an affiliated person of the Trust.
For the fiscal year ending October 31, 1995 the Distributor
received sales commissions
and other compensation of $37,284 and $29,262 in connection
with the purchase of
investment company shares by New Century Capital Portfolio
and New Century I
Portfolio, respectively. The Distributor has voluntarily
agreed to waive payments made by
each Portfolio pursuant to the distribution plans in amounts
equal to the sales commissions
and other compensation.
The Advisor is responsible for making the Fund's portfolio
decisions subject to
instructions described in the prospectus. The Board of
Trustees may however impose
limitations on the allocation of portfolio brokerage.
Weston expects that most purchases and sales of portfolio
securities, including money
market securities, will be principal transactions. Such
securities are normally purchased
directly from the issuer or from an underwriter or market
maker for the securities. There
will usually be no brokerage commissions paid by Weston for
such purchases. Purchases
from the underwriters will include the underwriter
commission or concession and
purchases from dealers serving as market makers will include
the spread between the bid
and asked price.
TRANSFER AGENT
Fund/Plan Services, Inc. serves as transfer agent, dividend
disbursing agent and
redemption agent for redemptions pursuant to a Transfer and
Dividend Disbursing Agency
Agreement approved by the Board of Trustees of the Fund at a
meeting held for such
purpose on February 28, 1990. The agreement is subject to
annual renewal by the Board
of Trustees of the Fund.
The Transfer Agent provides all the necessary facilities,
equipment and personnel to
perform the usual or ordinary services of Transfer and
Dividend Paying Agent, including:
receiving and processing orders and payments for purchases
of shares, opening
stockholder accounts, preparing annual stockholder meeting
lists, mailing proxy material,
receiving and tabulating proxies, mailing stockholder
reports and prospectuses,
withholding certain taxes on non-resident alien accounts,
disbursing income dividends and
capital distributions, preparing and filing U.S. Treasury
Department Form 1099 (or
equivalent) for all stockholders, preparing and mailing
confirmation forms to stockholders
for all purposes and redemption of the Fund's shares and all
other confirmable transactions
in stockholders' accounts, recording reinvestment of
dividends and distributions of the
Fund's shares and causing redemption of shares for and
disbursements of proceeds to
withdrawal plan stockholders.
PURCHASE OF SHARES
The shares of each Portfolio of the Fund are continuously
offered by the Distributor.
Orders for the purchase of shares of a Portfolio of the Fund
received by the Transfer
Agent prior to 4:00 p.m. Eastern time on any day the New
York Stock Exchange is open
for trading will be confirmed at the net asset value next
determined (based upon valuation
procedures described in the prospectus) as of the close of
the Transfer Agent's business
day, normally 4:00 p.m. Eastern time. Orders received by the
Transfer Agent after 4:00
p.m. will be confirmed at the next day's price.
Tax-Sheltered Retirement Plans
Shares of each Portfolio of the Fund are available to all
types of tax-deferred retirement
plans including custodial accounts described in Sections
401(k) and 403(b)(7) of the
Internal Revenue Code. Qualified investors benefit from the
tax-free compounding of
income dividends and capital gains distributions. You can
transfer an existing plan into the
Fund or set up a new
37/68
plan in the manner described below.
Individual Retirement Accounts (IRA) -- Individuals, who are
not active participants (and,
when a joint return is filed, who do not have a spouse who
is an active participant) in an
employer maintained retirement plan are eligible to
contribute on a deductible basis to an
IRA account. The IRA deduction is also retained for
individual taxpayers and married
couples with adjusted gross incomes not in excess of certain
specified limits. All
individuals may make non deductible IRA contributions to a
separate account to the extent
that they are not eligible for a deductible contribution.
Income earned by an IRA account
will continue to be tax deferred. A special IRA program is
available for corporate
employers under which the employers may establish IRA
accounts for their employees in
lieu of establishing corporate retirement plans. Known as
SEP-IRA's (Simplified Employee
Pension-IRA), they free the corporate employer of many of
the record keeping
requirements of establishing and maintaining a corporate
retirement plan trust.
If you have received a lump sum distribution from another
qualified retirement plan, you
may roll over all or part of that distribution into a Weston
Funds IRA. Your roll-over
contribution is not subject to the limits on annual IRA
contributions. By acting within
applicable time limits of the lump sum distribution you can
continue to defer Federal
income taxes on your lump sum contribution and on any income
that is earned on that
contribution.
KEOGH plans for Self-Employed -- If you are a self-employed
individual, you may
establish a Self-Employed Retirement (KEOGH) Plan and
contribute up to the maximum
amounts permitted for your plan under current tax laws.
Under a Defined Benefit KEOGH
Plan, you may establish a program with a specific amount of
retirement income as your
objective. The annual contributions needed to achieve this
goal are calculated actuarially
and can sometimes exceed the tax-deductible contributions
allowed under a regular
KEOGH Plan.
Tax-Sheltered Custodial Accounts -- If you are an employee
of a public school, state
college or university, or an employee of a non-profit
organization exempt from tax under
Section 501(c)(3) of the Internal Revenue Code, you may be
eligible to make
contributions into a custodial account (pursuant to section
493(b)(7) of the IRC) which
invests in Fund shares. Such contributions, to the extent
that they do not exceed certain
limits, are excludable from the gross income of the employee
for federal income tax
purposes.
How to establish Retirement Accounts -- All the foregoing
retirement plan options require
special applications or plan documents. Please call us to
obtain information regarding the
establishing of retirement plan accounts. In the case of IRA
and KEOGH Plans, National
Westminster Bank acts as the plan custodian and charges
nominal fees in connection with
plan establishment and maintenance. These fees are detailed
in the plan documents. You
may wish to consult with your attorney or other tax advisor
for specific advice prior to
establishing a plan.
Systematic Withdrawal Plan
You can arrange to make systematic cash withdrawals from
your account monthly,
quarterly or annually. Your account, initially, must be at
least $10,000 in order to establish
this service, although the withdrawals may continue even
though your account
subsequently drops below $10,000. Each payment must be for
an amount not less than
$50.00. If the periodic amount you elect to withdraw is more
than the increase of any
income or gains in your account, the withdrawals can deplete
the value of your account. If
the withdrawals are to be sent to someone who is not a
registered owner of the shares, a
signature guarantee is required on your application for this
service. Weston bears the cost
of providing this plan at the present time. Please contact
the Transfer Agent to obtain
information or an application.
38/68
OFFICERS AND TRUSTEES OF WESTON
Position and Principal
Occupation
Name and Address Age Office with Fund
During the past Five
Years
*Douglas A. Biggar 48 President and Executive Vice
President and Clerk,
20 William Street Trustee Weston
Financial Group,Inc.;
Wellesley, MA 02181 Clerk and
Treasurer of
Weston
Securities
Corporation.
*Joseph Robbat, Jr. 45 Trustee Chief Executive
Officer and
Treasurer,
20 William St. Weston
Financial Group, Inc.
Wellesley, MA 02181
Stanley H. Cooper, Esq. 47 Trustee Partner,
Kahalas and Cooper
(law firm).
15 Court Square
Boston, MA 02108
Roger Eastman, C.P.A. 61 Trustee Financial
Consultant
for financial
32 Meetinghouse Square services
companies.
Formerly Partner,
Middleton, MA 01949 Arthur Andersen
& Co.
Michael A. Diorio, C.P.A. 46 Trustee Partner,
Diorio, Hudson &
Pavento, P.C.
25 Birch St., Unit B-44
Milford, MA 01757
Paul Vierbickas 48 Treasurer Vice President,
Weston Financial Group,
Inc.;
20 William St. and SecretaryPrincipal,
Integral Systems
(Consulting Firm);
Wellesley, MA 02181 Vice President,
Colonial
Investors Service Center, Inc.
Ronald A. Sugameli 45 Vice President Senior
Counselor,Weston Financial
Group, Inc.
20 William St.
Wellesley, MA 02181
Wayne M. Grzecki 46 Vice President Senior
Counselor,Weston
Financial Group, Inc.
20 William St.
Wellesley, MA 02181
Karl Steinbrecher 31 Assistant Treasurer
Assistant Portfolio
Manager, Weston
Financial
20 William St Group, Inc.
Wellesley, MA 02181
*Interested trustee as defined in the Investment Company Act
of 1940 (the "1940 Act")
39/68
The officers conduct and supervise the daily business
operations of the Trust, while the
trustees, in addition to functions set forth under "Advisor"
"Administrator" and
"Distributor" review such actions and decide on general
policy. Compensation to officers
and trustees of Weston who are affiliated with the
Administrator, the Advisor or the
Distributor is paid by the Administrator, the Investment
Advisor or the Distributor,
respectively, and not by the Trust.
The Fund pays each Trustee who is not affiliated with the
Administrator, Advisor or
Distributor quarterly fees.
GENERAL INFORMATION
Audits and Reports
The accounts of the Fund are audited each year by Tait,
Weller & Baker of Philadelphia,
PA, independent certified public accountants whose selection
must be ratified annually by
the shareholders. Shareholders receive semi-annual and
annual reports of the Fund
including the annual audited financial statements and a list
of securities owned.
Custodian
The Fund has retained The Bank of New York, New York, NY
(the "Custodian Bank"),
to act as custodian of the securities and cash of the Fund.
Performance
Current yield and total return quotations used by the
Portfolios are based on standardized
methods of computing performance mandated by Securities and
Exchange Commission
rules. An explanation of those and other methods used by the
Portfolios to compute or
express performance follows:
The yield for the New Century I Portfolio for the 30-day
period ended on the date of the
audited financial statements contained herein was 1.73%.
As indicated below, current yield is determined by dividing
the net investment income per
share earned during the period by the maximum offering price
per share on the last day of
the period and annualizing the result. Expenses accrued for
the period include any fees
charged to all shareholders during the 30-day base period.
According to the new
Securities and Exchange Commission formula:
6
Yield = 2 [(a-b + 1) -1]
cd
40/68
Where
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of shares outstanding
during the period that were
entitled to receive dividends.
d = the maximum offering price per share on the last
day of the period.
The average annual total return for each Portfolio for the
indicated period ended on the
date of the balance sheet contained herein is as follows:
Fund Name 1 Year 5 Years From Fund's
Inception(1/31/89)
New Century I Portfolio 14.93% 11.92% 9.42%
New Century Capital Portfolio 19.60% 15.44% 11.14%
As the following formula indicates, the average annual total
return is determined by
multiplying a hypothetical initial purchase order of $1,000
by the average annual
compound rate of return (including capital
appreciation/depreciation and dividends and
distributions paid and reinvested) for the stated period
less any fees charged to all
shareholder accounts and annualizing the result. The
calculation assumes that all dividends
and distributions are reinvested at the public offering
price on the reinvestment dates
during the period. The quotation assumes the account was
completely redeemed at the end
of each period and the deduction of all applicable charges
and fees. According to the new
Securities and Exchange Commission formula:
n
P(1 + T) = ERV
Where
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of hypothetical $1,000
payment made at the
beginning of the 1, 5 or 10 year
periods at the end of the 1, 5 or 10 year
periods (or fractional portion thereof).
Comparisons and Advertisements
To help investors better evaluate how an investment in the
Portfolios might satisfy their
investment objective, advertisements regarding the
Portfolios may discuss yield or total
return for the Portfolios as reported by various financial
publications and/or compare yield
or total return to yield or total return as reported by
other investments, indices, and
averages. The following publications, indices, and averages
may be used:
Shearson Lehman Hutton Treasury Index;
41/68
Salomon Bros. Corporate Bond Index;
U.S. Treasury Bills;
Consumer Price Index;
S&P 500;
Dow Jones Industrial Average; and
Mutual Fund returns calculated by the CDA Technologies,
Inc.
42/68
INVESTMENT ADVISOR
Weston Financial Group, Inc.
20 William Street
Wellesley, MA 02181
DISTRIBUTOR
Weston Securities Corp.
20 William Street
Wellesley, MA 02181
CUSTODIAN
The Bank of New York
New York, New York
TRANSFER AGENT
Fund/Plan Services, Inc.
P.O. Box 874
Conshohocken, PA 19428
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102-1707
43/68
NEW CENTURY CAPITAL
PORTFOLIO OF INVESTMENTS
October 31, 1995
Issuer Shares Value
INVESTMENT COMPANIES -100.1%
Aggressive Growth Funds 9.3%
AIM Aggressive Growth.......................46,110 $1,850,399
Kaufmann....................... 379,262 1,862,177
USAA Mutual Aggressive Growth.......... 40,773 1,012,798
4,725,374
Small Company Funds 5.8%
Heartland Value....................... 43,703 1,256,472
PBHG Emerging Growth....................... 609 12,303
PBHG Growth....................... 2,924 65,439
T. Rowe Price New Horizon..... 75,506 1,625,644
2,959,858
Growth Funds 45.2%
Davis New York Venture A...................294,813 4,422,208
Fidelity Advisor Equity Growth A.......... 104,407 4,078,145
Harbor Capital Appreciation.............. 146,288 3,393,883
Longleaf Partners....................... 463 9,986
MFS Value A....................... 158,285 1,880,428
T. Rowe Price Mid-Cap Growth............... 74,637 1,482,297
T. Rowe Price New America................. 129,943 4,551,895
Vanguard Prime Cap....................... 119,721 3,201,327
23,020,169
Growth and Income Funds 31.2%
AIM Charter....................... 215,573 2,291,539
MAS Value....................... 313,745 4,568,127
Neuberger & Berman Guardian................133,966 3,142,832
Selected American....................... 232,571 3,932,773
Vanguard Windsor II....................... 95,620 1,918,143
15,853,414
See accompanying notes to financial statements
44/68
NEW CENTURY CAPITAL
PORTFOLIO OF INVESTMENTS (CONT)
October 31, 1995
Issuer Shares Value
Equity-Income Funds 3.7%
Vanguard Equity-Income.....................120,770 $1,893,680
Foreign Stock Funds 4.9%
Scudder International.......................28,350 1,252,211
Vanguard International Growth............. 84,184 1,246,768
2,498,979
Total Investment Companies(Cost $46,268,063)
50,951,474
SHORT TERM OBLIGATIONS -0.6%
Corporate Short-Term Notes0.6%
Corp. of North America ,Associates 5.85095%, 11/01/95
(Cost $290,000)....................... 290,000 290,000
Total Investments -100.7%
(Cost, $46,558,063)....................... 51,241,474
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS - (.7%)
...............................................
(352,825)
NET ASSETS - 100%$50,888,649
* Cost for federal income tax at October 31, 1995 was
$46,558,063 and net unrealized
appreciation consisted of:
Gross unrealized appreciation.............. $4,788,818
Gross unrealized depreciation............. (105,407)
Net unrealized appreciation $4,683,411
See accompanying notes to financial statements
45/68
NEW CENTURY CAPITAL
STATEMENT OF ASSETS AND LIABILITIES
October 31,1995
ASSETS
Investments, at value (Cost, $46,558,063) (Note 1a) ......$51,241,474
Cash....................... 965
Interest receivable 47
Total Assets 51,242,486
LIABILITIES
Payable for:
Investment advisory fee....................... 43,884
Administrative fee....................... 5,550
Capital stock redeemed....................... 265,000
Accrued expenses....................... 39,403
Total Liabilities 353,837
NET ASSETS
(applicable to 3,879,696 outstanding shares; unlimited
number
of shares of beneficial interest authorized, $.01 par
value.)$50,888,649
Net Asset Value, offering price and redemption price per
share
($50,888,649/3,879,696 shares of beneficial interest
outstanding)$13.12
Net Assets consist of:
Undistributed net realized gain on investments........... $5,106,231
Unrealized appreciation of investments .......................4,683,411
Paid-in capital....................... 41,099,007
Total Net Assets$50,888,649
See accompanying notes to financial statements
46/68
NEW CENTURY CAPITAL
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
October 31,1995
INVESTMENT LOSS:
Income:
Interest....................... $15,197
Dividends....................... 435,613
Total Investment Income 450,810
Expenses:
Distribution costs (Note 3)............... 66,871
Investment advisory fees (Note 2).........416,611
Transfer agent fees....................... 28,354
Legal and audit fees.......................24,280
Custodian fees...................... .52,204
Registration and filing fees................4,750
Administration fee (Note 2)........ 65,275
Trustees' fees....................... 4,906
Amortization of organization expense (Note 1b)
........................ 445
Other....................... 5,615
Total Expenses 669,311
NET INVESTMENT LOSS (218,501)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments........4,579,113
Capital gain distributions from regulated investment
companies....................... 1,339,353
Net unrealized appreciation of investments during the year
........................ 1,873,067
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
7,791,533
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$7,573,032
See accompanying notes to financial statements
47/68
NEW CENTURY CAPITAL
STATEMENT OF CHANGES IN NET ASSETS
October 31,
INCREASE (DECREASE) IN NET ASSETS
1995 1994
OPERATIONS
Net investment income (loss) ($218,501) ($257,308)
Net realized gain on investments 4,579,113 2,308,112
Capital gain distributions from regulated
investment companies 1,339,353 2,023,777
Net unrealized appreciation (depreciation)
of investments 1,873,067 (2,346,593)
Net increase in net assets resulting from
operations 7,573,032 1,727,988
Net equalization (Note 1d) - 6,679
DISTRIBUTION TO SHAREHOLDERS FROM:
Realized gains on investments
($1.29 and $.99 per share, respectively) (3,998,270) (2,979,470)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital share transactions (a)
9,346,385 211,460
Total increase (decrease) in net assets 12,921,147 (1,033,343)
NET ASSETS:
Beginning of period 37,967,502 39,000,845
End of period (including undistributed net
investment income of $-0- and $44,955,
respectively: $50,888,649 $37,967,502
(a) Summary of capital share transactions is as follows:
Shares Value Shares Value
Shares sold 743,530 $9,207,741 222,810 $2,611,434
Shares issued on reinvestment
of distributions 350,376 3,699,973 231,480 2,673,014
1,093,906 12,907,714 454,290 5,284,448
Shares redeemed (298,273) (3,561,329) (431,451) (5,072,988)
Net increase 795,633 $9,346,385 22,839 $211,460
See accompanying notes to financial statements
48/68
NEW CENTURY CAPITAL
Financial Highlights
For the Period
(For A Share Outstanding Throughout The Period) For
the Year Ended October 31,
January 31, 1989* to
October 31,
1995 1994 1993 1992 1991 1990 1989
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $12.31 $12.74 $12.15 $12.28 $9.39 $10.91 $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment
income (loss) (0.06) (0.08) (0.07)(0.02) 0.09 0.13 0.18
Net gain (loss) on
securities (both realized
and unrealized) 2.16 0.64 2.39 0.27 2.97 (1.02) 0.73
Total from investment
operations 2.10 0.56 2.32 0.25 3.06 (0.89) 0.91
LESS DISTRIBUTIONS
Dividends from net
investment income - - - - (0.17) (0.26) -
Distributions from
capital gains (1.29) (0.99) (1.73) (0.38) - (0.37) -
Total distributions (1.29) (0.99) (1.73) (0.38)(0.17) (0.63) -
Net asset value,
end of period $13.12 $12.31 $12.74 $12.15 $12.28 $9.39 $10.91
TOTAL RETURN 19.60% 4.70% 20.83% 1.82%33.05% -8.76% 12.12%
RATIOS/SUPPLEMENTAL DATA
Net assets,
end of year (in 000's) $50,889 $37,968 $39,001 $36,072 $36,243$33,067$41,455
Ratio of expenses to
average net assets 1.61% 1.60% 1.54% 1.58% 1.76% 1.90%1.86% (a)*
Ratio of net investment income
(loss) to average
net assets -0.52% -0.68% -0.53% -0.14% 0.84% 1.56% 2.01% (b)**
Portfolio turnover 206% 107% 133% 224% 156% 286% 64%
* Commencement of Operations
** Annualized
(a) The ratio of operating expenses to average net assets
without giving effect to the
voluntary waiver of a portion of the advisory fees would
have been 1.91% for the period.
(b) The ratio of net investment income to average net assets
without giving effect to the
voluntary waiver of a portion of the advisory fees would
have been 1.96% for the period.
49/68
NEW CENTURY I
PORTFOLIO OF INVESTMENTS
October 31, 1995
Issuer Shares Value
INVESTMENT COMPANIES -98.3%
Small Company Funds 6.7%
T. Rowe Price New Horizon............ 93,442 $2,011,809
Growth Funds 20.4%
Davis New York Venture A..............91,910 1,378,648
Harbor Capital Appreciation.......... 31,795 737,633
Longleaf Partners....................... 463 9,986
MFS Value A....................... 139,830 1,661,179
T. Rowe Price New America............ 38,104 1,334,780
Vanguard Prime Cap....................38,246 1,022,705
6,144,931
Growth and Income Funds 25.1%
Lexington Corporate Leaders...... 74,703 986,831
MAS Value....................... 178,872 2,604,375
Neuberger & Berman Guardian.......... 92,049 2,159,462
Selected American....................106,627 1,803,055
7,553,723
Convertible Securities Fund1.5%
Value Line Convertible................36,047 442,651
Equity-Income Funds 3.9%
Portico Growth & Income Institutional.30,176 833,772
Vanguard Equity-Income................22,868 358,570
1,192,342
See accompanying notes to financial statements
50/68
NEW CENTURY I (CONT)
PORTFOLIO OF INVESTMENTS
October 31, 1995
Issuer Shares Value
High Yield Bond Funds 11.2%
Mainstay High Yield Corporate.......155,858 $1,265,564
PIMCo High Yield Institutional......192,694 2,117,705
3,383,269
Government Treasury Bond Funds3.1%
Vanguard Fixed Income
L/T U.S. Treasury.................. .87,511 926,738
Worldwide Bonds 11.4%
Capital World Bond..................129,763 2,224,130
PIMCo Foreign Institutional Bond.... 58,939 603,536
PIMCo Global Institutional Bond 58,309 602,915
3,430,581
Foreign Stock Funds 4.6%
Scudder International................15,615 689,694
Vanguard International Growth........47,232 699,510
1,389,204
Total Investment Companies (cost $28,075,735)
29,601,991
SHORT TERM OBLIGATIONS -0.9%
Corporate Short-Term Notes0.9%
Associates 5.85095%, 11/01/95
(Cost $280,000)..... ....280,000 280,000
Total Investments -99.2%
(Cost, $28,355,735). ......................29,881,991
CASH AND OTHER ASSETS
LESS LIABILITIES - .8%....... 242,383
NET ASSETS - 100% $30,124,374
* Cost for federal income tax at October 31, 1995 was
$28,355,735 and net unrealized
appreciation consisted of:
Gross unrealized appreciation................ $1,591,584
Gross unrealized depreciation........................ (65,328)
Net unrealized appreciation $1,526,256
See accompanying notes to financial statements
51/68
NEW CENTURY I
STATEMENT OF ASSETS AND LIABILITIES
October 31,1995
ASSETS
Investments, at value (Cost, $28,355,735)...........$29,881,991
Cash....................... 1,767
Receivables for:
Investment securities sold.................... 275,475
Dividends and interest....................... 38,544
Total Assets 30,197,777
LIABILITIES
Payable for:
Investment advisory fee...................... 26,202
Administrative fee....................... 3,277
Accrued expenses & other payables...................... 43,924
Total Liabilities 73,403
NET ASSETS
(applicable to 2,547,817 outstanding shares; unlimited
number
of shares of beneficial interest authorized, $.01 par
value.) $30,124,374
Net Asset Value, offering price and redemption price per
share
($30,124,374/2,547,817 shares of beneficial interest
outstanding) $11.82
Net Assets consist of:
Undistributed net realized gain on investments...... $2,121,244
Unrealized appreciation of investments.................1,526,256
Paid-in capital....................... 26,476,874
Total Net Assets $30,124,374
See accompanying notes to financial statements
52/68
NEW CENTURY I
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
October 31,1995
INVESTMENT INCOME:
Income:
Interest....................... $7,147
Dividends....................... 997,193
Total Investment Income 1,004,340
Expenses:
Distribution costs (Note 3)................ 35,857
Investment advisory fees (Note 2)...........260,474
Transfer agent fees....................... 32,390
Legal and audit fees....................... 14,122
Custodian fees....................... 50,789
Registration and filing fees..................3,513
Administration fee (Note 2)................ 40,742
Trustees' fees....................... 3,852
Amortization of organization
expense (Note 1b) .......................470
Other....................... 4,808
Total Expenses 447,017
NET INVESTMENT INCOME 557,323
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments..........1,756,920
Capital gain distributions from
regulated investment companies..............515,124
Net unrealized appreciation of
investments during the year.................879,774
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 3,151,818
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 3,709,141
See accompanying notes to financial statements
53/68
1995 1994
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income $557,323 $364,445
Net realized gain on investments 1,756,920 837,103
Capital gain distributions
from regulated investment companies 515,124 824,721
Net unrealized appreciation
(depreciation)of investments 879,774 (1,739,943)
Net increase in net assets resulting from
operations 3,709,141 286,326
Net equalization (Note 1d) - 60,487
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income($.24 and $.19 per (557,793) (373,934)
share respectively)
Realized gains on investments
($.68 and $.68 per share,
respectively) (1,418,765) (1,301,840)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital
share transactions (a) 4,588,657 2,598,263
Total increase in net assets 6,321,240 1,269,302
NET ASSETS:
Beginning of period 23,803,134 22,533,832
End of period (including undistributed net
investment income of $ -0- and $197,986,
respectively $30,124,374 $23,803,134
(a) Summary of capital share transactions is as follows:
Shares Value Shares Value
Shares sold 445,659 $4,911,647 270,342 $3,015,991
Shares issued on reinvestment
of distributions 177,565 1,828,804 135,809 1,499,389
623,224 6,740,451 406,151 4,515,380
Shares redeemed (196,223) (2,151,794) (172,956) (1,917,117)
Net increase 427,001 $4,588,657 233,195 $2,598,263
See accompanying notes to financial statements
54/68
NEW CENTURY I
Financial Highlights
For the Period
(For A Share Outstanding Throughout The Period)
For
the Year Ended October 31,
January 31, 1989* to
October 31,
1995 1994 1993 1992 1991 1990 1989
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period $11.22 $11.94 $11.36 $11.21$9.70 $10.57 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income (loss) 0.24 0.20 0.36 0.28 0.37 0.44 0.35
Net gain (loss) on securities 1.28 (0.05) 1.61 0.28 1.60 (0.84) 0.53
(both realized and unrealized)
Total from investment operations1.52 0.15 1.97 0.56 1.97 (0.40) 0.88
LESS DISTRIBUTIONS
Dividends from net
investment income (0.24) (0.19) (0.31)(0.28)(0.46) (0.39)(0.31)
Distributions from capital gains(0.68)(0.68) (1.08)(0.13) - (0.08) -
Total distributions (0.92) (0.87) (1.39)(0.41)(0.46)(0.47) (0.31)
Net asset value, end of period$11.82 $11.22 $11.94 $11.36$11.21 $9.70 $10.57
TOTAL RETURN 14.93% 1.26% 18.90% 5.02%20.83%-3.97%11.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) 30,124 $23,803$22,534 $18,949 $19,465$19,679 $18,262
Ratio of expenses to
average net assets 1.72% 1.73% 1.93% 1.83% 1.96% 1.97%1.98% (a)*
Ratio of net investment income
to average net assets 2.14% 1.57% 2.11% 2.52% 3.52% 4.20%4.32% (b)**
Portfolio turnover 191% 130% 73% 172% 121% 197% 24%
* Commencement of Operations
** Annualized
(a) The ratio of operating expenses to average net assets
without giving effect to the
voluntary waiver of a portion of the advisory fees would
have been 1.91% for the period.
(b) The ratio of net investment income to average net assets
without giving effect to the
voluntary waiver of a portion of the advisory fees would
have been 1.96% for the period.
55/68
Weston Portfolios
Notes to Financial Statements
October 31, 1995
1. Significant Accounting Policies:
Weston Portfolios Inc. (the Fund) is organized as a
Massachusetts business trust which is
registered under the Investment Company Act of 1940, as
amended, as an open-end
diversified management investment company and currently
offers shares of two series:
New Century I Portfolio and New Century Capital Portfolio
(together, "The Portfolios").
The following is a summary of significant accounting
policies consistently followed by the
Portfolios in the preparation of their financial statements.
a.) Investment Valuation. Investments, representing
primarily capital stock of other
open-end investment companies, are valued at their net asset
value as reported by such
companies. In the absence of readily available market
quotations, investments are valued
at fair value as determined by the Board of Trustees.
Short-term investments are valued at
amortized cost which approximates market value.
b.) Organization Expenses. The costs incurred in
connection with the organization and
initial registration of the Portfolios were advanced by
Weston Financial Group. These
costs were deferred and were amortized on a straight line
basis over the five year period
beginning with the commencement of operations. Weston
Financial Group Profit Sharing
Plan and Trust has agreed that in the event that any of the
initial shares are redeemed
during the amortization period, the redemption proceeds will
be reduced by any such
unamortized organizational expenses in the same proportion
as the number of initial shares
being redeemed bears to the number of initial shares
outstanding at the time of the
redemption.
c.) Federal Income Taxes. It is the policy of each
Portfolio to comply with the
requirements of the Internal Revenue Code applicable to
regulated investment companies
and to distribute substantially all of their taxable income
to their shareholders in a manner
which results in no tax to the Portfolios. Therefore, no
federal income or excise tax
provision is required.
d.) Equalization. The Portfolios follow the accounting
practice known as equalization by
which a portion of the proceeds from sales and costs or
repurchases of capital shares
equivalent, on a per share basis, to the amount of
undistributed net investment income on
the date of transaction is credited or charged to
undistributed net investment income. As a
result, undistributed net investment income per share is
unaffected by sales or redemptions
of a Portfolio's shares.
e.) Investment Transactions. Investment transactions are
recorded on a trade date basis.
Realized gains and losses from investment transactions are
determined using the first in,
first out method.
f.) Income Recognition. Interest is accrued on portfolio
investments daily. Dividend
income is recorded on the ex-dividend date.
g.) Cost of Operations. The Portfolios bear all costs of
their operations other than
expenses specifically assumed by the Advisor. Expenses
directly attributable to a Portfolio
are charged to that Portfolio; other expenses are allocated
proportionately among each
Portfolio in relation to the net assets of each Portfolio.
2. Investment Advisory Fee, Administration Agreement and
Trustees' Fee
Fees paid by the Portfolios pursuant to a contract (the
"Investment Advisory Agreement")
with Weston Financial Group, Inc. are computed daily and
paid monthly at an annualized
rate of 1% on the first $100 million of average daily assets
and .75% of net
56/68
assets
exceeding that amount. The advisory fees are based on the
net assets of each of the
Portfolios separately, and not on the total net assets of
the two series.
The Portfolios pay each Trustee who is not affiliated with
Weston Financial $2,000
annually.
Fees paid by the Portfolio pursuant to a contract (the
"Administration Agreement") with
Weston Financial Group to administer the ordinary course of
the Portfolios' business are
paid monthly from a detail of actual expenses incurred in
the overseeing of the Portfolios'
affairs. All expenses incurred overseeing the Portfolios'
affairs are reimbursed monthly.
3. Distribution Plan and Other Transactions With
Affiliates
The Portfolios have adopted a Distribution Plan (the
"Distribution Plan") under Section
12(b) of the Investment Company Act of 1940 and Rule 12(b)-1
thereunder. Under the
plan, each Portfolio may pay up to .25% of its average daily
net assets to Weston
Securities Corp. (the "Distributor") for activities
primarily intended to result in the sale of
shares. Under its terms, the Plan shall remain in effect
from year to year, provided such
continuance is approved annually by a vote of a majority of
the Trustees and a majority of
those Trustees who are not "interested persons" of the
Portfolios and who have no direct
or indirect financial interest in the operation of the Plan
or in any agreement related to the
Plan (the "Qualified Trustees").
During the year ended October 31, 1995 Weston Securities
Corp. received sales
commissions and other compensation of $37,284 and $29,262 in
connection with the
purchase of investment company shares by New Century Capital
Portfolio and New
Century I Portfolio, respectively. Weston Securities Corp.
has voluntarily agreed to waive
payments made by each Portfolio pursuant to the distribution
plans in amounts equal to
the sales commissions and other compensation.
Certain officers and trustees are also officers and/or
directors of Weston Financial Group,
Inc. and Weston Securities Corp.
4. Investment Transactions
For the year ended October 31, 1995 the cost of purchases
and the proceeds from sales of
securities other than short-term notes were as follows:
Purchases Sales
New Century Capital Portfolio $92,317,717 $85,534,969
New Century I Portfolio $52,912,679 $49,263,433
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
Weston Portfolios
Wellesley, Massachusetts
We have audited the statements of assets and
liabilities of Weston Portfolios
(comprising, respectively, New Century Capital Portfolio
and New Century I Portfolio),
including the portfolios of investments, as of October 31,
1995, the related statements of
operations for the year then ended, and the statements of
changes in net assets for each of
the two years in the period then ended and the financial
highlights for each of the five
years in the period then ended. These financial statements
and financial highlights are the
responsibility of the Trust's management. Our
responsibility is to express an opinion on
these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards.
Those standards require that we plan and perform the audits
to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of
material misstatement. An audit includes examining, on a
test basis, evidence supporting
the amounts and disclosures in the financial statements.
Our procedures included
confirmation of securities owned as of October 31, 1995 by
correspondence with the
custodian. An audit also includes assessing the accounting
principles used and significant
estimates made by management, as well as evaluating the
overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above
present fairly, in all material respects, the financial
position of Weston Portfolios as of
October 31, 1995, the results of its operations for the year
then ended, the changes in its
net assets for each of the two years in the period then
ended and the financial highlights
for each of the five years in the period then ended, in
conformity with generally accepted
accounting principles.
TAIT, WELLER &
BAKER
Philadelphia, Pennsylvania
November 30, 1995
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This Report and the financial statements contained herein are
submitted for the general information of the shareholders of
the Portfolios. This report is authorized for distribution to
prospective investors in the Portfolios only if preceded or
accompanied by an effective Prospectus which contains
details concerning the management fee expense and
other pertinent information.
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PART C
OTHER INFORMATION
Item 24.FINANCIAL STATEMENTS AND EXHIBITS.
Herewith are all financial statements and exhibits filed as a part of this
registration statement:
(a)Financial Statements:
(Attached to Part B of this N-1A)
(b)(1)(a)Registrant's Articles of Incorporation.
(Filed with registration on Form N-1A)*
(b)Articles of Amendment. (Filed with Pre-effective amendment No. 1)*
(c)Declaration of Trust. (Filed with Post-effective amendment No. 3)*
(2)(a)Corporate Bylaws. (Filed with registration on Form N-1A)*
(b)Trust Bylaws. (Filed with Post-effective amendment No. 3)*
(3)Not applicable, because there is no voting trust agreement.
(4)(a)Specimen copy of each security to be issued by the registrant.
(Filed with registration on Form N-1A)*
(b)Specimen copy of beneficial share certificates.
(Filed with Post-effective amendment No. 3)*
(5)(a)Form of Investment Advisory Agreement between Weston Financial
Group, Inc. and the Registrant (Corporate Form) for the
New Century Capital Portfolio.
(Filed with registration on Form N-1A)*
(b)Form of Investment Advisory Agreement between Weston Financial Group,
Inc. and the Registrant (Corporate Form) for the
New Century I Portfolio.
(Filed with registration Form N-1A)*
(c)Form of Investment Advisory Agreement between Weston Financial Group,
Inc. and the Registrant (Trust Form) Trust for
New Century Capital Portfolio.
(Filed with Post-effective amendment No. 3)*
(d)Form of Investment Advisory Agreement between Weston Financial Group,
Inc. and the Registrant (Trust Form) for New Century I Portfolio.
(Filed with Post-effective amendment No. 3)*
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(6)(a)Form of principal underwriting agreement between Weston Securities Corp.
and the Registrant (Corporate Form) for the
New Century Capital Portfolio.
(Filed with registration on Form N-1A)*
(b)Form of principal Underwriting Agreement between Weston Securities
Corporation and the Registrant (Corporate Form) for the
New Century I Portfolio.
(Filed with registration on Form N-1A)*
(c)Form of principal Underwriting Agreement between Weston Securities
Corporation and the Registrant (Trust Form) for the
New Century Capital Portfolio.
(Filed with Post-effective amendment No. 3)*
(d)Form of principal Underwriting Agreement between Weston Securities
Corporation and the Registrant (Trust Form) for the
New Century I Portfolio.
(Filed with Post-effective amendment No. 3)*
(7)Not applicable, because there are no pension, bonus or other
agreements for the benefit of trustees and officers.
(8)(a)Form of Custodian Agreement between Registrant and the
National Westminster Bank. (Filed with registration on Form N-1A)*
(b)Amendment to Custodian Agreement.
(Filed with Post-effective amendment No. 3)*
(9)(a)Form of Administration Agreement between Weston Financial Group, Inc.
and the Registrant (Corporate Form) for the
New Century Capital Portfolio.
(Filed with Pre-effective Amendment No. 2 to Form N-1A)*
(b)Form of Administration Agreement between Weston Financial Group, Inc.
and the Registrant (Corporate Form) for the New Century I Portfolio.
(Filed with Pre-effective Amendment No. 2 to Form N-1A)*
(c)Form of Administration Agreement between Weston Financial Group, Inc.
and the Registrant (Trust Form) for the New Century Capital Portfolio.
(Filed with Post-effective amendment No. 3)*
(d)Form of Administration Agreement between Weston Financial Group, Inc.
and the Registrant (Trust Form) for the New Century I Portfolio.
(Filed with Post-effective amendment No. 3)*
(e)Agreement and Plan of Reorganization.
(Filed with Post-effective amendment No. 3)*
(10)(a)Opinion and consent of counsel as to the legality of the
registrant's securities being registered.
(To be supplied annually pursuant to Rule 24f-2 of the
Investment Company Act of 1940.)
(b)Reorganization opinion and consent of counsel.
(Filed with Post-effective amendment No. 3)*
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(11)The consent of Tait, Weller & Baker Independent Certified
Public Accountants.
(12)Not applicable.
(13)Letter from contributors of initial capital to the Registrant that
purchase was made for investment purposes without any present
intention of redeeming or selling.
(Filed with Pre-effective Amendment No. 2 to Form N-1A)*
(14)Not applicable.
(15)(a) Rule 12b-1 Plan of Distribution for the New Century Capital Portfolio.
(Filed with registration on Form N-1A)*
(b)Rule 12b-1 Plan of Distribution for the New Century I Portfolio.
(Filed with registration on Form N-1A)*
(c)Rule 12b-1 Plan of Distribution for the New Century I Portfolio.
(Filed with Post-effective amendment No. 3)*
(d)Rule 12b-1 Plan of Distribution for the New Century I Portfolio.
(Filed with Post-effective amendment No. 3)*
(16)Schedule of Computation of Performance Quotations.
*Previously filed and incorporated by reference.
Item 25.PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE REGISTRANT.
NONE
Item 26.NUMBER OF HOLDERS OF SECURITIES.
The number of record holders of each class of securities of the
registrant as of January 31, 1996, is as follows:
(1) (2)
Title of Class Number of Record Holders
Common stock $.01 par value:
New Century Capital Portfolio 674
New Century I Portfolio 314
Item 27.INDEMNIFICATION.
The company shall indemnify any person who was or is a trustee, officer
or employee of the Trust;
provided however, that any such indemnification (unless ordered by a court)
shall be made by the company only as authorized in the specific case upon a
determination that indemnification of such persons is proper in the
circumstances. Such determination shall be made:
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(i)by the Board of Trustees by a majority vote of a quorum which consists
of the trustees who are neither "interested persons" of the company as
defined in Section 2(a)(19) of the 1940 Act, nor parties to the
proceedings, or,
(ii)if the required quorum is not obtainable or if a quorum of such
trustees so directs,by independent legal counsel in a written opinion.
No indemnification will be provided by the company to any trustee or
officer of the company for any liability to the company or shareholders
to which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of duty.
As permitted by Article 11.2 (a)(v)of the Declaration of Trust,
reasonable expenses incurred by a trustee who is a party to a
proceeding may be paid by the Trust in advance of the final disposition
of the action, after authorization in the manner described above and upon
receipt by the trust of a written undertaking by the trustee or officer
to repay the amount if it is ultimately determined that he is not
entitled to be indemnified by the Trust.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons
of the Registrant, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding.)
is asserted by such trustee, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 28.BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
The principal business of Weston Financial Group, Inc. is to provide
investment counsel and advice to individual and institutional investors.
Item 29.PRINCIPAL UNDERWRITERS.
(a)Weston Securities Corp., the only principal underwriter of the
Registrant, does not act as principal underwriter, depositor or
investment advisor to any other investment company.
(b)Herewith is the information required by the following table with
respect to each trustee, officer or partner of the only underwriter
named in answer to Item 21 of Part B:
Position and Position and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
I. Richard Horowitz President None
20 William St.
Wellesley, MA 02181
Douglas A. Biggar Clerk and President
20 William St. Treasurer and Trustee
Wellesley, MA 02181
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(c)Not applicable.
Item 30.LOCATION OF ACCOUNTS AND RECORDS.
Each account, book or other document required to be maintained by
Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to 31a-3)
promulgated thereunder is in the physical possession of Weston Financial
Group, Inc., 20 William Street, Wellesley, Massachusetts 02181,
Fund/Plan Services, Inc., 3 Elm St., Conshohocken, Pennsylvania 19428 or
The Bank of New York, New York, New York.
Item 31.MANAGEMENT SERVICES.
All management services are covered in the management agreement between
the registrant and Weston Financial group , as discussed in Parts A and B.
Item 32.UNDERTAKINGS.
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets
all of the requirements for effectiveness of this registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the city of
Wellesley, and State of Massachusetts on the 22nd day of February, 1996.
WESTON PORTFOLIOS
Registrant
By:DOUGLAS A. BIGGAR
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
President, February 21. 1996
DOUGLAS A. BIGGAR Principal Executive
Officer and Trustee
Trustee February 21. 1996
STANLEY H. COOPER
Trustee February 21. 1996
MICHAEL A. DIORIO
Trustee February 21. 1996
ROGER EASTMAN
Trustee February 21. 1996
JOSEPH ROBATT, JR
Treasurer, Secretary February 21. 1996
PAUL VIERBICKAS Principal Financial
and Accounting Officer
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Exhibit Index
Item 24:
(b) (11) Consent of Independent Auditors
(b) (16) Schedule of Computation of Performance Quotations
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CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated November 30, 1995, accompanying the
October 31, 1995 financial statements of Weston Portfolios (comprising,
respectively, the New Century Capital Portfolio and the New Century I
Portfolio) which are included in Part B of Post-Effective Amendment No. 12
to this Registration Statement and Prospectus. We consent to the use of the
aforementioned reports in the Registration Statement and Prospectus.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 23, 1996
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Exhibit 16
WESTON PORTFOLIOS
New Century Capital Portfolio;
New Century I Portfolio
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
1.Standard Total Return (Average Annual Total Return)
n
P (1 + T) = ERV
From Inception to 10/31/95
New Century Capital
P=1,000
T=11.14%
n=6.75
ERV=$2,040.45
New Century I
P=1,000
T=9.42%
n=6.75
ERV=$1,835.71
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