As filed with the Securities and Exchange Commission on February 28, 1997.
File No. 33-24041
811-5646
Securities and Exchange Commission
Washington, DC 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
Post-Effective Amendment No. 9
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [X]
Amendment No. 13 [X]
(Check appropriate box or boxes).
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 Cod (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, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate date of Proposed Public Offering: As soon as practicable
after the effective date of the registration statement.
It is proposed that this filing will become effective (check appropriate
box)
X immediately upon filing pursuant to paragraph (b).
_ on (date) pursuant to paragraph (b).
_ 60 days after filing pursuant to paragraph (a)(1).
_ on (date) pursuant to paragraph (a)(a)>
_ 75 days after filing pursuant to paragraph (a)(2).
_ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
_ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933 pursuant to Rule 24f-2 of the Investment Company
Act of 1940. Registrant filed its Rule 24f-2 Notice for Registrant's fiscal
year ended October 31, 1996 on December 24, 1996.
PROSPECTUS dated February 28, 1997
20 William Street, Wellesley, Massachusetts 02181
(1)239-0445
Weston Portfolios (the "Trust" or "Weston") 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 the 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 18, 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 28, 1997, 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.
Weston Portfolios
February 28, 1997
For investors seeking
consistent returns over time
Contents Page
Expense Table
Financial Highlights
Highlights
Performance
Investment Objective and Policies
of Each Portfolio
Investment Restrictions
Beneficial Shares
Board of Trustees
Investment Advisor
Distribution of Shares
Custodian
Transfer Agent
General Operations
Dividends,Distributions,Taxes
Determination of Net Asset Value
How to Purchase Shares
How to Redeem Shares
Special Plans
The following tables illustrate all expenses and fees that a
shareholder of the Fund will incur.
<TABLE>
Shareholder Transaction Expenses
<CAPTION>
Capital I
Portfolio Portfolio
<S> <C> <C>
Sales Load Imposed on Purchases none none
Sales Load Imposed on Reinvested Dividends none none
Redemption Fees none none
Exchange Fees none none
</TABLE>
<TABLE>
Annual Operating Expenses (as a percentage of average net assets)
<CAPTION>
Capital I
Portfolio Portfolio
<S> <C> <C>
Management and Advisory Fees 1.00% 1.00%
Shareholder and Custody Accounting Costs .16% .24%
12b-1 Fees .08% .14%
Other Expenses .23% .23%
Total Operating Costs 1.47% 1.61%
</TABLE>
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 its
fiscal year ended October 31, 1996.
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.
<TABLE>
<CAPTION> 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Capital Portfolio $15 $46 $80 $176
I Portfolio $16 $51 $88 $191
</TABLE>
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.
NEW CENTURY CAPITAL PORTFOLIO
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 the five most recent years are
part of the Portfolio's Financial
Statements included in the Statement of Additional Information.
The Portfolio's Financial Statements have been audited 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.
<TABLE>
(For A Share Outstanding Throughout The Period)
Year Ended October 31,
<CAPTION>
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of
period $13.12 $12.31 $12.74 $12.15 $12.28
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net investment income (loss) (0.09) (0.06) (0.08) (0.07) (0.02)
Net gain (loss) on securities
(both realized and unrealized) 1.90 2.16 0.64 2.39 0.27
Total from investment
operations 1.81 2.10 0.56 2.32 0.25
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Distributions from capital
gains (1.42) (1.29) (0.99) (1.73) (0.38)
Total distributions (1.42) (1.29) (0.99) (1.73) (0.38)
Net asset value, end of period $13.51 $13.12 $12.31 $12.74 $12.15
TOTAL RETURN 14.91% 19.60% 4.70% 20.83% 1.82%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $62,741 $50,889 $37,968 $39,001 $36,072
Ratio of expenses to average
net assets 1.47% 1.61% 1.60% 1.54% 1.58%
Ratio of net investment income
(loss) to average net assets -0.69% -0.52% -0.68% -0.53% -0.14%
Portfolio turnover rate 214.00% 206.00% 107.00% 133.00% 224.00%
</TABLE>
<TABLE>
(For A Share Outstanding Throughout The Period)
Year Ended October 31,
<CAPTION>
For the
Period
January 31,
1989<F1> to
October 31,
1991 1990 1989
<S> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of
period $9.39 $10.91 $10.00
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net investment income (loss) .09 .13 .18
Net gain (loss) on securities
(both realized and unrealized) 2.97 (1.02) .73
Total from investment
operations 3.06 (.89) .91
LESS DISTRIBUTIONS
Dividends from net investment
income (.17) (.26) --
Distributions from capital
gains -- (.37) --
Total distributions (.17) (.63) --
Net asset value, end of period $12.28 $9.39 $10.91
TOTAL RETURN 33.05% (8.76%) 12.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $36,243 $33,067 $41,455
Ratio of expenses to average
net assets 1.76% 1.90% 1.86%<F2><F3>
Ratio of net investment income
(loss) to average net assets 1.84% 1.56% 2.01%<F2><F4>
Portfolio turnover rate 156.00% 286.00% 64.00%
<FN>
<F1>Commencement of operations.
<F2>Annualized.
<F3>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.
<F4>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.
</FN>
</TABLE>
NEW CENTURY I PORTFOLIO
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 the five most recent years
are part of the Portfolio's Financial Statements
included in the Statement of Additional Information. The
Portfolio's Financial Statements have been audited 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.
<TABLE>
(For A Share Outstanding Throughout The Period)
Year Ended October 31,
<CAPTION>
1996 1995 1994 1993 1992
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $11.82 $11.22 $11.94 $11.36 $11.21
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.18 0.24 0.20 0.36 0.28
Net gain (loss) on securities
(both realized and unrealized) 1.30 1.28 (0.05) 1.61 0.28
Total from investment operations 1.48 1.52 0.15 1.97 0.56
LESS DISTRIBUTIONS
Dividends from net investment
income (0.18) (0.24) (0.19) (0.31) (0.28)
Distributions from capital gains (0.91) (0.68) (0.68) (1.08) (0.13)
Total distributions (1.09) (0.92) (0.87) (1.39) (0.41)
Net asset value, end of period $12.21 $11.82 $11.22 $11.94 $11.36
TOTAL RETURN 13.24% 14.93% 1.26% 18.90% 5.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $40,423 $30,124 $23,803 $22,534 $18,949
Ratio of expenses to average
net assets 1.61% 1.72% 1.73% 1.93% 1.83%
Ratio of net investment income
to average net assets 1.45% 2.14% 1.57 2.11% 2.52%
Portfolio turnover rate 172.00% 191.00% 130.00% 73.00% 172.00%
</TABLE>
<TABLE>
(For A Share Outstanding Throughout The Period)
Year Ended October 31,
<CAPTION>
For the
Period
January 31,
1989<F4> to
October 31
1991 1990 1989
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period $11.82 $11.22 $11.94
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) .37 .44 .35
Net gain (loss) on securities
(both realized and unrealized) 1.60 (.84) .53
Total from investment operations 1.97 (.40) .86
LESS DISTRIBUTIONS
Dividends from net investment
income (.46) (.39) (.31)
Distributions from capital gains -- (.08) --
Total distributions (.46) (.47) (.31)
Net asset value, end of period $11.21 $9.70 $10.57
TOTAL RETURN 20.83% (3.97)% 11.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $19,465 $19,679 $18,262
Ratio of expenses to average
net assets 1.96% 1.97% 1.98%<F1><F2>
Ratio of net investment income
to average net assets 3.52% 4.20% 4.32%<F1><F3>
Portfolio turnover rate 121.00% 197.00% 24.00%
<FN>
<F1>Annualized.
<F2>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 2.10% for the period.
<F3>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 4.20% for the period.
<F4>Commencement of operations.
</FN>
</TABLE>
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 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
Portfolios' transfer agent, FPS 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.
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 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, 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.
<TABLE>
<CAPTION> Moody's Standard & Poor's
<S> <C> <C>
High Grade Aaa AAA
High Quality Aa AA
Upper Medium Grade AA A
Medium Grade Baa BBB
</TABLE>
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 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 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
ncome (Equity) Funds
Growth and Income Stock Funds
Income (Mixed) Funds
Bond and Preferred Funds
Option/Income Funds
Balanced Funds
U.S. Government Income Funds
Precious Metals Funds/Gold Funds
International Equity Funds
Money Market Funds
International Bond Funds
GNMA Funds
International Money Market Funds
Global Bond Funds
Global Money Market Funds
Global Equity Funds
Aggressive Growth Funds
Sector Funds
Municipal Bond Funds
High Yield Bond Funds
Short Term Bond Funds
I 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.
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
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 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, 1996, the Advisor received $355,005 (1% of average net
assets) for the New Century I Portfolio and $571,221 (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 20 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 Agreement")
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 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.
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 FPS 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 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 each 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
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:
FPS Services, Inc.
P.O. Box 61503
King of Prussia, PA 19406-0903
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 required 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 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
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.
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 15% 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 domestic issuers. Foreign securities are subject to
heightened political and economic risks, 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.
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 liquid 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 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 affected
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 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 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.
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
FPS Services, Inc.
P.O. Box 61503
King of Prussia, PA. 19406-0903
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
WESTON PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION Dated February 28, 1997
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 28, 1997. RETAIN THIS STATEMENT OF ADDITIONAL INFORMATION
FOR FUTURE REFERENCE.
TABLE OF CONTENTS
THE FUND'S INVESTMENTS Page
Rising Trend Strategy
Declining Trend Strategy
Other Factors
Investment Company Securities
Money Market Securities
Portfolio Turnover
INVESTMENT RESTRICTIONS
INVESTMENT ADVISOR
DISTRIBUTOR
ALLOCATION OF PORTFOLIO BROKERAGE
TRANSFER AGENT
PURCHASE OF SHARES
Tax-Sheltered Retirement Plans
Systematic Withdrawal Plan
OFFICERS AND TRUSTEES OF WESTON
GENERAL INFORMATION
Audits and Reports
Custodian
PERFORMANCE
FINANCIAL STATEMENTS
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 objectives 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 Trust may recognize a more
conservative strategy to achieve 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
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 Portfolios' 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 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 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 Trust 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 Trust's Board
of Trustees or by a vote of a majority of the outstanding voting
securities of the respective Portfolio of the Trust 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 Trust's Board of Trustees or by a
majority vote of the outstanding shares of the Trust, 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, 1996, 1995 and 1994, the
Advisor received fees related to its management of the New Century
I Portfolio and the New Century Capital Portfolio of $355,055 and
$571,221; $260,474 and $416,611; and $232,680 and $381,083,
respectively. For the fiscal years ended October 31, 1996, 1995
and 1994, the Advisor received fees related to administrative
services provided to the New Century I Portfolio and the New
Century Capital Portfolio of $47,840 and $72,631; $40,742 and
$65,275; and $39,832 and $65,011, 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 Trust); and Joseph Robbat, Jr., Chief Executive
Officer and Treasurer (a Trustee of the Trust).
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 Trust's Board
of Trustees or by a vote of a majority of the outstanding voting
securities of the respective Portfolio of the Trust 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, 1996, the
Distributor received the following fees from the Trust for costs
incurred in connection with the distribution of the shares of each
portfolio: the New Century I Portfolio, $49,532; the New Century
Capital Portfolio, $47,310. 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 Trust, 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 Trust
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 Trust. 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 would be
charged to the Trust 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, 1996 the Distributor
received sales commissions and other compensation of $95,499 and
$39,219 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 Trust'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
FPS 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 Trust 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 Trust.
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 Trust's shares and all other confirmable transactions in
stockholders' accounts, recording reinvestment of dividends and
distributions of the Trust'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 Trust are continuously offered
by the Distributor. Orders for the purchase of shares of a
Portfolio of the Trust 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 Trust 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 Trust or set up a new 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 Trust 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.
<TABLE>
OFFICERS AND TRUSTEES OF WESTON
<CAPTION>
Principal Occupation
Position and During the past
Name and Address Age Office with Five Years
Trust
<S> <C> <C> <C>
Douglas A. Biggar<F1> 49 President and Executive Vice President and Clerk,
20 William Street Trustee Weston Financial Group, Inc.;
Wellesley, MA 02181 Clerk and Treasurer of Weston Secu-
rities Corporation.
Joseph Robbat, Jr.<F1> 46 Trustee Chief Executive Officer and
20 William St. Treasurer, Weston Financial
Wellesley, MA 02181 Group, Inc.
Stanley H. Cooper,
Esq. 48 Trustee Partner, Kahalas and Cooper (law
15 North Beacon Street firm).
Allston, MA 02134
Roger Eastman, C.P.A. 62 Trustee Financial Consultant for financial
32 Meetinghouse Square services companies. Formerly
Middleton, MA 01949 Partner, Arthur Andersen & Co.
Michael A. Diorio,
C.P.A. 47 Trustee Partner, Diorio, Hudson &
25 Birch St. Pavento, P.C.
Unit B-44
Milford, MA 01757
Paul Vierbickas 49 Treasurer Vice President, Weston Financial
20 William St. and Secretary Group, Inc.
Wellesley, MA 02181
Ronald A. Sugameli 46 Vice President Senior Counselor, Weston Financial
20 William St. Group, Inc.
Wellesley, MA 02181
Wayne M. Grzecki 47 Vice President Senior Counselor, Weston Financial
20 William St. Group, Inc.
Wellesley, MA 02181
Karl Steinbrecher 32 Assistant Assistant Portfolio Manager, Weston
20 William St. Treasurer Financial Group, Inc.
Wellesley, MA 02181
<FN>
<F1>Interested trustee as defined in the Investment Company Act of 1940
(the "1940 Act").
</FN>
</TABLE>
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 Trust pays each Trustee who is not affiliated with the Administrator,
Advisor or Distributor quarterly fees.
The following table shows aggregate compensation paid to each non-affiliated
Trustee by the Trust in the fiscal year ended October 31, 1996.
<TABLE>
<CAPTION>
(1) (2) (3)
Name of Person, Aggregate Pension or Retirement
Position Compensation from Benefits Accrued as
Registrant Part of Trust
<S> <C> <C>
Stanley H.
Cooper, Esquire
- Trustee $3,000 $-0-
Roger
Eastman, C.P.A.
- Trustee $3,000 $-0-
Michael A.
Diorio, C.P.A.
- Trustee $3,000 $-0-
</TABLE>
<TABLE>
<CAPTION>
(1) (4) (5)
Name of Person, Estimated Annual Total
Position Benefits Upon Compensation
Retirement
<S> <C> <C>
Stanley H.
Cooper, Esquire
- Trustee $-0- $3,000
Roger
Eastman, C.P.A.
- Trustee $-0- $3,000
Michael A.
Diorio, C.P.A.
- Trustee $-0- $3,000
</TABLE>
GENERAL INFORMATION
Audits and Reports
The accounts of the Trust are audited each year by Tait, Weller &
Baker of Philadelphia, PA, independent certified public accountants
whose selection must be approved annually by the Board of Trustees.
Shareholders receive semi-annual and annual reports of the Trust
including the annual audited financial statements and a list of
securities owned.
Custodian
The Trust has retained The Bank of New York, New York, NY (the
"Custodian Bank"), to act as custodian of the securities and cash
of the Trust.
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
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:
<TABLE>
<CAPTION> From Fund's
Fund Name 1 Year 5 Years Inception (1/31/89)
<S> <C> <C> <C>
New Century I Portfolio 14.91% 12.10% 11.62%
New Century Capital
Portfolio 3.24% 10.50% 9.90%
</TABLE>
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 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;
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.
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
FPS Services, Inc.
P.O. Box 61503
King of Prussia, PA 19406
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
<TABLE>
NEW CENTURY CAPITAL
PORTFOLIO OF INVESTMENTS<F1>
October 31, 1996
<CAPTION>
Issuer Shares Value
<S> <C> <C> <C>
INVESTMENT COMPANIES - 100.00%
Aggressive Growth Funds 13.6%
IDS Strategy Aggressive 82,858 1,778,123
Invesco Dynamics 49,716 702,983
Kaufmann 570,095 3,409,171
USAA Mutual Aggressive Growth 26,405 788,442
WPG Tudor 70,760 1,854,614
8,533,333
Small Company Funds 6.1%
Eclipse Financial Asset Equity 115,016 1,866,709
Managers Special Equity 35,404 1,835,014
PBHG Advisors Inner Circle 1,061 26,467
PBHG Growth 2,924 76,725
3,804,915
Growth Funds 44.1%
IDS New Dimensions 94,814 1,987,295
Invesco Growth 807,910 4,718,197
Janus 132,075 3,519,789
Longleaf Partners 478 11,581
MFS Research 352,465 6,587,579
Mutual Shares 107 10,102
Sound Shore 36,080 800,263
T. Rowe Mid-Cap Growth 123,183 2,912,037
T. Rowe New America 84,803 3,454,881
Value Line 173,504 3,706,049
27,707,773
Growth and Income Funds 27.2%
Lexington Growth & Income 76,324 1,465,412
MFS Mass Invest Trust 470,012 7,064,280
SAFECO Equity 273,395 4,472,736
SEI S&P 500 Index 86,999 1,976,623
Vanguard Index 500 19,712 1,308,279
WPG Growth & Income 26,368 793,687
17,081,017
Equity-Income Funds 4.0%
SAFECO Income 120,006 2,492,530
Foreign Stock Funds 5.0%
T. Rowe International 134,953 1,817,822
Vanguard Intl Growth 79,697 1,298,265
3,116,087
Total Investment Companies
(Cost $59,399,083) 62,735,655
Total Investments 100.00%
(Cost, $59,399,083)<F2> 62,735,655
CASH IN EXCESS OF LIABILITIES
AND OTHER ASSETS 0.0% 5,702
NET ASSETS - 100% $62,741,357
<FN>
<F1>See accompanying notes to financial statements.
<F2>Cost for federal income tax at October 31, 1996 was $59,399,083
and net unrealized appreciation consisted of:
Gross unrealized appreciation $3,469,721
Gross unrealized depreciation (133,149)
Net unrealized appreciation $3,336,572
</FN>
</TABLE>
<TABLE>
NEW CENTURY CAPITAL
STATEMENT OF ASSETS AND LIABILITIES<F1>
October 31, 1996
<S> <C>
ASSETS
Investments, at value (Cost, $59,399,083)
(Note 1a) $62,735,655
Cash 113,890
Subscriptions receivable 25,625
Total Assets 62,875,170
LIABILITIES
Payable for:
Investment advisory fee 53,367
Administrative fee 5,400
Accrued expenses 75,046
Total Liabilities 133,813
NET ASSETS
(applicable to 4,643,171 outstanding shares; unlimited number of
shares of beneficial interest authorized, $.01 par value.) $62,741,357
Net Asset Value, offering price and redemption price per share
($62,741,357/4,643,171 shares of beneficial
interest outstanding) $13.51
Net Assets consist of:
Undistributed net realized gain on investments $8,794,130
Unrealized appreciation of investments 3,336,572
Paid-in capital 50,610,655
Total Net Assets $62,741,357
<FN>
<F1>See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
NEW CENTURY CAPITAL
STATEMENT OF OPERATIONS<F1>
FOR THE YEAR ENDED
October 31, 1996
<S> <C>
NET INVESTMENT LOSS:
Income:
Interest $4,330
Dividends 438,062
Total Investment Income 442,392
Expenses:
Distribution costs (Note 3) 47,310
Investment advisory fees (Note 2) 571,221
Transfer agent fees 32,107
Legal and audit fees 23,855
Custody and accounting fees 60,898
Registration and filing fees 14,812
Administration fee (Note 2) 72,631
Trustees' fees 6,156
Other 8,456
Total Expenses 837,446
NET INVESTMENT LOSS
REALIZED AND UNREALIZED (395,054)
GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 6,130,110
Capital gain distributions from regulated
investment companies 3,377,702
Net unrealized depreciation of investments
during the year (1,346,839)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 8,160,973
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $7,765,919
<FN>
<F1>See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
NEW CENTURY CAPITAL
STATEMENT OF CHANGES IN NET ASSETS<F1>
October 31
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment loss ($395,054) ($218,501)
Net realized gain on investments 6,130,110 4,579,113
Capital gain distributions from
regulated investment companies 3,377,702 1,339,353
Net unrealized appreciation
(depreciation) of investments (1,346,839) 1,873,067
Net increase in net assets resulting
from operations 7,765,919 7,573,032
DISTRIBUTION TO SHAREHOLDERS FROM:
Realized gains on investments
($1.42 and $1.29 per share,
respectively) (5,424,859) (3,998,270)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital
share transactions (a)<F2> 9,511,648 9,346,385
Total increase in net assets 11,852,708 12,921,147
NET ASSETS:
Beginning of period 50,888,649 37,967,502
End of period $62,741,357 $50,888,649
<FN>
<F1>See accompanying notes to financial statements.
<F2>(a) Summary of capital share transactions is as follows:
Shares Value Shares Value
Shares sold 806,181 $10,480,616 743,530 $9,207,741
Shares issued on
reinvestment
of distributions 422,545 5,180,407 350,376 3,699,973
1,228,726 15,661,023 1,093,906 12,907,714
Shares redeemed (465,251) (6,149,375) (298,273) (3,561,329)
Net increase 763,475 $9,511,648 795,633 $9,346,385
</FN>
</TABLE>
<TABLE>
NEW CENTURY CAPITAL
FINANCIAL HIGHLIGHTS<F1>
(For A Share Outstanding Throughout The Period)
Year Ended October 31,
<CAPTION>
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of
period $13.12 $12.31 $12.74 $12.15 $12.28
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net investment income (loss) (0.09) (0.06) (0.08) (0.07) (0.02)
Net gain (loss) on securities
(both realized and unrealized) 1.90 2.16 0.64 2.39 0.27
Total from investment
operations 1.81 2.10 0.56 2.32 0.25
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Distributions from capital
gains (1.42) (1.29) (0.99) (1.73) (0.38)
Total distributions (1.42) (1.29) (0.99) (1.73) (0.38)
Net asset value, end of period $13.51 $13.12 $12.31 $12.74 $12.15
TOTAL RETURN 14.91% 19.60% 4.70% 20.83% 1.82%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $62,741 $50,889 $37,968 $39,001 $36,072
Ratio of expenses to average
net assets 1.47% 1.61% 1.60% 1.54% 1.58%
Ratio of net investment income
(loss) to average net assets -0.69% -0.52% -0.68% -0.53% -0.14%
Portfolio turnover rate 214.00% 206.00% 107.00% 133.00% 224.00%
<FN>
<F1>See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
NEW CENTURY I
PORTFOLIO OF INVESTMENTS
October 31, 1996
<CAPTION>
Issuer Shares Value
<S> <C> <C> <C>
INVESTMENT COMPANIES - 99.3%
Small Company Funds 6.9%
Eclipse Financial Asset Equity 20,086 326,000
Managers Special Equity 37,325 1,934,540
Stein Roe Capital Opportunity 18,532 543,742
2,804,282
Growth Funds 22.3%
Invesco Growth 253,782 1,482,086
Janus 28,688 764,533
Longleaf Partners 478 11,581
MFS Research 174,425 3,260,007
Mutual Shares 107 10,102
Sound Shore 46,113 1,022,794
T. Rowe MidCap Growth 46,358 1,095,896
Value Line 63,390 1,354,014
9,001,013
Growth and Income Funds 23.2%
Founders Blue Chip 274,801 2,209,398
Lexington Corporate Leaders 79,737 1,247,081
Lexington Growth & Income 82,582 1,585,574
MFS Mass Invest Trust 193,489 2,908,146
SEI S&P 500 Index 48,538 1,102,774
WPG Growth & Income 10,125 304,753
9,357,726
Convertible Securities Fund 4.2%
Fidelity Convertible 14,468 258,407
Value Line Convertible 49,838 727,642
Vanguard Convertible 56,995 726,690
1,712,739
Equity-Income Funds 7.7%
Portico Growth & Income 19,274 637,571
SAFECO Income 118,788 2,467,227
3,104,798
General Corporate Bond Funds 3.7%
Janus Flexible Income 83,899 809,624
Strong Corporate Bond 63,249 672,968
1,482,592
High Quality Bond Funds 2.6%
Dodge & Cox Income 43,152 507,469
Scudder Income 41,027 545,657
1,053,126
High Yield Bond Funds 11.7%
Mainstay High Yield 251,648 2,093,713
Nicholas Income 206,391 718,241
Northeast Investors 174,567 1,930,710
4,742,664
Government Treasury Bond Funds 2.3%
Vanguard F/I Intermediate G/T 89,964 941,926
Worldwide Bonds 11.1%
Capital World Bond 60,330 1,039,482
PIMCO Foreign Bond 181,031 2,105,394
PIMCO Global Bond 123,878 1,329,215
4,474,091
Foreign Stock Funds 3.6%
T. Rowe International 61,310 825,846
Vanguard Intl Growth 39,453 642,689
1,468,535
Total Investment 100.00%
(Cost, $38,105,153)<F2> 40,143,492
CASH AND OTHER ASSETS LESS LIABILITIES - (.7%) 279,343
NET ASSETS - 100% $40,422,835
<FN>
<F1>See accompanying notes to financial statements.
<F2>*Cost for federal income tax at October 31, 1996 was $38,105,153
and net unrealized appreciation consisted of:
Gross unrealized appreciation $2,084,251
Gross unrealized depreciation (45,912)
Net unrealized appreciation $2,038,339
</FN>
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES<F1>
October 31, 1996
<S> <C>
ASSETS
Investments, at value (Cost, $38,105,153)
(Note 1a) $40,143,492
Cash 386
Receivables for:
Investment securities sold 325,00
Capital stock sold 28,000
Dividends and interest 38,687
Total Assets 40,535,565
LIABILITIES
Payable for:
Investment advisory fee 34,232
Administrative fee 3,400
Accrued expenses & other payables 75,098
Total Liabilities 112,730
NET ASSETS
(applicable to 3,310,281 outstanding shares; unlimited number of
shares of beneficial interest authorized,
$.01 par value.) $40,422,835
Net Asset Value, offering price and redemption price per share
$40,422,835/3,310,281 shares of beneficial interest outstanding) $12.21
Net Assets consist of:
Undistributed net realized gain on investments $3,084,337
Unrealized appreciation of investments 2,038,339
Paid-in capital 35,300,159
Total Net Assets $40,422,835
<FN>
<F1>See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
NEW CENTURY I
STATEMENT OF ASSETS AND LIABILITIES<F1>
October 31, 1996
<S> <C>
NET INVESTMENT LOSS:
Income:
Interest $2,344
Dividends 1,083,026
Total Investment Income 1,085,370
Expenses:
Distribution costs (Note 3) 49,532
Investment advisory fees (Note 2) 355,005
Transfer agent fees 32,447
Legal and audit fees 12,438
Custody and accounting fees 54,155
Registration and filing fees 11,330
Administration fee (Note 2) 47,840
Trustees' fees 4,053
Other 5,389
Total Expenses 572,189
NET INVESTMENT INCOME 513,181
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 1,884,467
Capital gain distributions from regulated
investment companies 1,421,812
Net unrealized appreciation of investments
during the year 512,083
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 3,818,362
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $4,331,543
<FN>
<F1>See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
NEW CENTURY I
FINANCIAL HIGHLIGHTS<F1>
(For A Share Outstanding Throughout The Period)
Year Ended October 31,
<CAPTION>
1996 1995 1994 1993 1992
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $11.82 $11.22 $11.94 $11.36 $11.21
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.18 0.24 0.20 0.36 0.28
Net gain (loss) on securities
(both realized and unrealized) 1.30 1.28 (0.05) 1.61 0.28
Total from investment operations 1.48 1.52 0.15 1.97 0.56
LESS DISTRIBUTIONS
Dividends from net investment
income (0.18) (0.24) (0.19) (0.31) (0.28)
Distributions from capital gains (0.91) (0.68) (0.68) (1.08) (0.13)
Total distributions (1.09) (0.92) (0.87) (1.39) (0.41)
Net asset value, end of period $12.21 $11.82 $11.22 $11.94 $11.36
TOTAL RETURN 13.24% 14.93% 1.26% 18.90% 5.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $40,423 $30,124 $23,803 $22,534 $18,949
Ratio of expenses to average
net assets 1.61% 1.72% 1.73% 1.93% 1.83%
Ratio of net investment income
to average net assets 1.45% 2.14% 1.57 2.11% 2.52%
Portfolio turnover rate 172.00% 191.00% 130.00% 73.00% 172.00%
<FN>
<F1>See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
NEW CENTURY I
STATEMENT OF CHANGES IN NET ASSETS<F1>
October 31
<CAPTION> 1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income $513,181 $557,323
Net realized gain (loss) on investments 1,884,467 1,756,920
Capital gain distributions from
regulated investment companies 1,421,812 515,124
Net unrealized appreciation
of investments 512,083 879,774
Net increase in net assets
resulting from operations 4,331,543 3,709,141
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income ($.18 and
$.24 per share), respectively (513,181) (557,793)
Realized gains on investments
($.91 and $.68 per share,
respectively) (2,343,186) (1,418,765)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital
share transactions (a)<F2> 8,823,285 4,588,657
Total increase in net assets 10,298,461 6,321,240
NET ASSETS:
Beginning of period 30,124,374 23,803,134
End of period $40,422,835 $30,124,374
<FN>
<F1>See accompanying notes to financial statements.
<F2> (a) Summary of capital share transactions is as follows:
Shares Value Shares Value
Shares sold 699,661 $8,169,881 445,659 $4,911,647
Shares issued
on reinvestment of
distributions 233,112 2,660,469 177,565 1,828,804
932,773 10,830,350 623,224 6,740,451
Shares redeemed (170,309) (2,007,065) (196,223) (2,151,794)
Net increase 762,464 $8,823,285 427,001 $4,588,657
</FN>
</TABLE>
Weston Portfolios
Notes to Financial Statements
October 31, 1996
1. Significant Accounting Policies:
Weston Portfolios (Weston) 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 investment objective of the New
Century Capital Portfolio is capital growth, with the secondary
objective being income while managing risk. This Portfolio seeks
to achieve its objective by concentrating in shares of registered
investment companies which emphasize investments in growth
stocks. The investment objective of New Century I Portfolio is
income, with the secondary objective being growth while managing
risk. This 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. The price of shares of
these Portfolios fluctuates daily and there are no assurances
that the Portfolios will be successful in achieving their stated
investment objectives. 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.) 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.
c.) 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.
d.) Income Recognition. Interest is accrued on portfolio
investments daily. Dividend income is recorded on the ex-
dividend date.
e.) 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.
f.) Use of Estimates. In preparing financial statements in
accordance with generally accepted accounting principles,
management is required to make estimates and assumptions that
affect the reported amount of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of
the financial statements, and revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
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 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 $3,000 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, 1996 Weston Securities Corp.
received sales commissions and other compensation of $95,499 and
$39,219 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, 1996 the cost of purchases and the
proceeds from sales of securities other than short-term notes
were as follows:
<TABLE>
<CAPTION> Purchases Sales
<S> <C> <C>
New Century Capital Portfolio $128,811,814 $121,810,907
New Century I Portfolio $68,847,392 $60,702,440
</TABLE>
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, 1996, 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, 1996 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, 1996,
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 22, 1996
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.
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)*
(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)*
(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.
(17) Financial Data Schedules.
* 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, 1997, is as
follows:
(1) (2)
Title of Class Number of Record Holders
Common stock $.01 par value:
New Century Capital Portfolio 739
New Century I Portfolio 344
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:
(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:
<TABLE>
<CAPTION> Position and Position and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
<S> <C> <C>
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
</TABLE>
(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, FPS Services,
Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania 19406
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.
The Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
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
25th day of February, 1997.
WESTON PORTFOLIOS
Registrant
By: Douglas A. Biggar
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.
Douglas A. Biggar President, February 25, 1997
Douglas A. Biggar Principal Executive
Stanley H. Cooper Officer and Trustee February 25, 1997
Stanley H. Cooper
Michael A. Diorio Trustee February 25, 1997
Michael A. Diorio
Roger Eastman Trustee February 25, 1997
Roger Eastman
Joseph Robbat, Jr. Trustee February 25, 1997
Joseph Robbat, Jr.
Paul Vierbickas Treasurer, Secretary February 25, 1997
Paul Vierbickas Principal Financial
and Accounting Officer
Exhibit Index
Item 24:
(b) (11) Consent of Independent Auditors.
(b) (16) Schedule of Computation of Performance Quotations.
(b) (17) Financial Data Schedules.
Exhibit 11 EDGAR EXHIBIT EX-99.B11
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated November 22, 1996, accompanying the
October 31, 1996 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. 13 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, 1997
Exhibit 16 EDGAR EXHIBIT EX-99.B16
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
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's Annual Report to Shareholders dated October 31, 1996 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000838802
<NAME> WESTON PORTFOLIOS
<SERIES>
<NUMBER> 1
<NAME> NEW CENTURY CAPITAL
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 59,399,083
<INVESTMENTS-AT-VALUE> 62,735,655
<RECEIVABLES> 25,625
<ASSETS-OTHER> 113,890
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 62,875,170
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 133,813
<TOTAL-LIABILITIES> 133,813
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 50,610,655
<SHARES-COMMON-STOCK> 4,643,171
<SHARES-COMMON-PRIOR> 3,879,696
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,794,130
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,336,572
<NET-ASSETS> 62,741,357
<DIVIDEND-INCOME> 438,062
<INTEREST-INCOME> 4,330
<OTHER-INCOME> 0
<EXPENSES-NET> 837,446
<NET-INVESTMENT-INCOME> (395,054)
<REALIZED-GAINS-CURRENT> 9,507,812
<APPREC-INCREASE-CURRENT> (1,346,839)
<NET-CHANGE-FROM-OPS> 7,765,919
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 5,424,859
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 806,181
<NUMBER-OF-SHARES-REDEEMED> 465,251
<SHARES-REINVESTED> 422,545
<NET-CHANGE-IN-ASSETS> 11,852,708
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 5,106,231
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 571,221<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 837,446
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 13.12
<PER-SHARE-NII> (0.09)
<PER-SHARE-GAIN-APPREC> 1.90
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.42
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.51
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>See Note 2 to the Registrant's Notes to Financial Statements dated
October 31, 1996 as contained in its Annual Report to Shareholders
dated October 31, 1996.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
the Registrant's Annual Report to Shareholders dated October 31, 1996
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000838802
<NAME> WESTON PORTFOLIOS
<SERIES>
<NUMBER> 2
<NAME> NEW CENTURY I
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 38,105,153
<INVESTMENTS-AT-VALUE> 40,143,492
<RECEIVABLES> 391,687
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 386
<TOTAL-ASSETS> 40,535,565
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 112,730
<TOTAL-LIABILITIES> 112,730
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,300,159
<SHARES-COMMON-STOCK> 3,310,281
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2,547,817
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,084,337
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,038,339
<NET-ASSETS> 40,422,835
<DIVIDEND-INCOME> 1,083,026
<INTEREST-INCOME> 2,344
<OTHER-INCOME> 0
<EXPENSES-NET> 572,189
<NET-INVESTMENT-INCOME> 513,181
<REALIZED-GAINS-CURRENT> 3,306,279
<APPREC-INCREASE-CURRENT> 512,083
<NET-CHANGE-FROM-OPS> 4,331,543
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 513,181
<DISTRIBUTIONS-OF-GAINS> 2,343,186
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 699,661
<NUMBER-OF-SHARES-REDEEMED> 170,309
<SHARES-REINVESTED> 233,112
<NET-CHANGE-IN-ASSETS> 10,298,461
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2,121,244
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 355,005<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 572,189
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.82
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 1.30
<PER-SHARE-DIVIDEND> 0.18
<PER-SHARE-DISTRIBUTIONS> 0.91
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.21
<EXPENSE-RATIO> 1.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
<FN>
<F1>See Note 2 to the Registrant's Notes to Financial Statements dated
October 31, 1996 contained in its Annual Report to Shareholders
dated October 31, 1996.
</FN>
</TABLE>
