As filed with the Securities and Exchange Commission on February 28, 1998
File No. 33-24041
811-5646
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 10 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. 14 [X]
WESTON PORTFOLIOS
(Exact name of Registrant as specified in Charter)
20 William Street, Wellesley, MA. 02181
(Address of Principal Executive Offices)
Registrant's Telephone Number: (781)-235-7055
Wayne M. Grzecki, President, Weston Portfolios
20 William Street, Wellesley, MA 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 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 pursuant to paragraph (b)
______ 60 days after filing pursuant to paragraph (a) (1)
______ on pursuant to paragraph (a) (1)
______ 75 days after filing pursuant to paragraph (a) (2)
______ on 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, 1997 on January 29, 1998.
<PAGE>
PROSPECTUS
February 28, 1998
Weston Portfolios (the "Trust") is an open-end diversified investment company.
It was organized as a series Maryland corporation on July 20, 1988 and
reorganized as a Massachusetts business trust on March 20, 1990. The Trust
currently offers shares of two series (each a "Portfolio"), each of which has a
specific investment objective. There is no assurance the objectives will be
achieved.
NEW CENTURY CAPITAL PORTFOLIO. The objective of the Portfolio is capital
growth, with the secondary objective being income while managing risk.
The Portfolio seeks to achieve its objective by concentrating in shares of
registered investment companies which emphasize investments in growth stocks
and by making other investments selected in accordance with the Portfolio's
investment policies and restrictions.
(See "Investment Objectives and Policies")
NEW CENTURY I PORTFOLIO. The objective of the Portfolio is income, with the
secondary objective being growth while managing risk. The Portfolio seeks to
achieve its objective by concentrating in shares of registered investment
companies which emphasize investments in fixed income securities, preferred
stocks and high dividend paying stocks and by making other investments selected
in accordance with the Portfolio's investment policies and restrictions. (See
"Investment Objectives and Policies") The shares of the Portfolios may be
purchased or redeemed at their next determined net asset value. Purchases or
Redemptions will be effected at net asset value next determined following
receipt of the investor's request. (See "Share Price", "Buying Shares" and
"Redeeming Shares.")
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This Prospectus sets forth concisely the information about the Trust that a
prospective investor ought to know before investing. Shares of mutual funds are
subject to investment risk, including possible loss of the principal amount
invested and will fluctuate in value. You may receive more or less than you paid
when you redeem your shares. 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, 1998, which is available at no
charge upon written request to the Trust. The Trust's Statement of Additional
Information is incorporated herein by reference.
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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.
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<PAGE>
Weston Portfolios
Prospectus
February 28, 1998
FOR INVESTORS SEEKING CONSISTENT RETURNS OVER TIME
Table of Contents
Page
Fund Expenses 3
Financial Highlights 4
Summary Investment Objectives 6
Investment Performance 7
Investment Objectives and Policies of Each Portfolio 8
Investment Restrictions 12
Beneficial Shares 13
Share Price 13
Dividends, Capital Gains and Taxes 14
Board of Trustees 15
Investment Advisor 16
Distribution of Shares 17
General Operations 17
Custodian 17
Transfer Agent and Dividend Disbursing Agent 17
Buying Shares 17
Redeeming Shares 18
Exchanging Shares 19
Types of Accounts - Special Plans 19
Glossary 20
<PAGE>
Fund Expenses
The following tables illustrate all expenses and fees that a shareholder of the
Fund will incur.
<TABLE>
<S> <C> <C>
New Century Capital New Century I
Portfolio Portfolio
___________________ _____________
Shareholder Transaction Expenses:
Sales Load Imposed on Purchases none none
Sales Load Imposed on Reinvested Dividends none none
Redemption Fees none none
Exchange Fees none none
Annual Operating Expenses
(as a percentage of average net assets):
Management and Advisory Expenses 1.00% 1.00%
Shareholder and Custody Accounting Costs .14% .12%
12b-1 Fees .13% .19%
Other Expenses .16% .10%
----- -----
Total Operating Costs 1.43% 1.41%
===== =====
</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, 1997.
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>
<S> <C> <C> <C> <C>
1 year 3 years 5 years 10 years
------ ------- ------- --------
New Century Capital Portfolio $15 $45 $78 $171
New Century I Portfolio $14 $45 $77 $169
</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.
<PAGE>
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 for
each of the five years in the period ended October 31, 1997 is part of the
Portfolio's Financial Statements included in the Statement of Additional
Information. The Portfolio's Financial Statements have been audited by
independent auditors, Briggs Bunting & Dougherty, LLP whose opinion thereon
(which is unqualified) is also included in the Statement of Additional
Information. The Portfolio's Financial Statements for each of the four years
in the period ended October 31, 1996 were audited by other auditors whose
reports thereon were unqualified. The Statement of Additional Information is
available at no charge upon written request to the Trust.
(For A Share Outstanding Throughout The Period)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Years Ended October 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning
of period $13.51 $13.12 $12.31 $12.74 $12.15 $12.28 $9.39 $10.91 $10.00
------- ------- ------- ------- ------ ------ ----- ------ ------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net investment income (loss) (0.10) (0.09) (0.06) (0.08) (0.07) (0.02) .09 .13 .18
Net gain on securities
(both realized and unrealized) 3.29 1.90 2.16 0.64 2.39 0.27 2.97 (1.02) .73
------- -------- -------- -------- ------- ------ ------ ------ ------
Total from investment operations 3.19 1.81 2.10 0.56 2.32 0.25 3.06 ( .89) .91
------- -------- -------- -------- ------- ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment
income - - - - - - (.17) ( .26) -
Distributions from capital gains (2.03) (1.42) (1.29) (0.99) (1.73) (0.83) - ( .37) -
------- -------- -------- -------- ------- ------ ------ ------ ------
Total distributions (2.03) 1.42 (1.29) (0.99) (1.73) (0.83) (.17) ( .63) -
------- -------- -------- -------- ------- ------ ------ ------ ------
Net asset value, end of period $14.67 $13.51 $13.12 $12.31 $12.74 $12.15 $12.28 $9.39 $10.91
======= ========= ========= ======== ======== ======= ======= ====== ======
TOTAL RETURN 27.22% 14.91% 19.60% 4.70% 20.83% 1.82% 33.05% (8.76%) 12.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $78,391 $62,741 $50,889 $37,968 $39,001 $36,072 $36,243 $33,067 $41,455
Ratio of expenses to average
net assets 1.43% 1.47% 1.61% 1.60% 1.54% 1.58% 1.76% 1.90% 1.86%(a)
**
Ratio of net investment income
(loss) to average net assets -0.76% -0.69% -0.52% -0.68% -0.53% -0.14% 1.84% 1.56% 2.01%(b)
**
Portfolio turnover 93% 214% 206% 107% 133% 224% 156% 286% 64%
</TABLE>
* Commencement of operations
** Annualized
(a) The ratio of operating expenses to average net assets without giving
effect to the voluntary waiver of a portion of the advisory fees would
have been 1.91% for the period.
(b) The ratio of net investment income to average net assets without giving
effect to the voluntary waiver of a portion of the advisory fees would
have been 1.96% for the period.
<PAGE>
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 for each of
the five years in the period ended October 31, 1997 is part of the Portfolio's
Financial Statements included in the Statement of Additional Information.
The Portfolio's Financial Statements for the year ended October 31, 1997
have been audited by independent auditors, Briggs Bunting Dougherty, LLP
whose opinion thereon (which is unqualified) is also included in the Statement
of Additional Information. The Portfolio's Financial Statements for each of the
four years in the period ended October 31, 1996 were audited by other auditors
whose reports thereon were unqualified. The Statement of Additional
Information is available at no charge upon written request to the Trust.
(For A Share Outstanding Throughout The Period)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Years Ended October 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period $12.21 $11.82 $11.22 $11.94 $11.36 $11.21 $9.70 $10.57 $10.00
------- ------- ------- ------- ------ ------ ----- ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.21 0.18 0.24 0.20 0.36 0.28 .37 .44 .35
Net gain (loss) on securities
(both realized and unrealized) 2.01 1.30 1.28 (0.05) 1.61 0.28 1.60 (.84) .53
------- -------- -------- --------- ------- ------- ------ ------ ------
Total from investment operations 2.22 1.48 1.52 0.15 1.97 0.56 1.97 (.40) .86
LESS DISTRIBUTIONS
Dividends from net investment
income (0.21) (0.18) (0.24) (0.19) (0.31) (0.28) (.46) (.39) (.31)
Distributions from capital gains (0.99) (0.91) (0.68) (0.68) (1.08) (0.13) - (.08) -
-------- -------- -------- --------- ------- ------- ------- ------- -----
Total distributions (1.20) (1.09) (0.92) (0.87) (1.39) (0.41) (.46) (.47) (.31)
-------- -------- -------- --------- ------- ------- ------- ------- -----
Net asset value, end of period $13.23 $12.21 $11.82 $11.22 $11.94 $11.36 $11.21 $9.70 $10.57
======== ========= ======== ========= ======= ======== ======== ======= =======
TOTAL RETURN 19.64% 13.24% 14.93% 1.26% 18.90% 5.02% 20.83% (3.97%) 11.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(in 000's) $48,893 $40,423 $30,124 $28,803 $22,534 $18,949 $19,465 $19,679 $18,262
Ratio of expenses to average
net assets 1.41% 1.61% 1.72% 1.73% 1.93% 1.83% 1.96% 1.97% 1.98%(a)
**
Ratio of net investment income
to average net assets 1.58% 1.45% 2.14% 1.57% 2.11% 2.52% 3.52% 4.20% 4.32%(b)
**
Portfolio turnover 80% 172% 191% 130% 73% 172% 121% 197% 24%
</TABLE>
* Commencement of operations
** Annualized
(a) The ratio of operating expenses to average net assets without giving
effect to the voluntary waiver of a portion of the advisory fees would
have been 2.10% for the period.
(b) The ratio of net investment income to average net assets without giving
effect to the voluntary waiver of a portion of the advisory fees would
have been 4.20% for the period.
<PAGE>
Summary Investment Objectives
INVESTMENT OBJECTIVES
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.
<PAGE>
RISK FACTORS
Prospective investors in each Portfolio should consider a number of factors:
(a) 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.
(b) 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.)
(c) 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.
(d) 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.
(e) Redeeming shareholders may pay redemption fees or brokerage costs if
shares are redeemed in-kind.
(f) 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.
INVESTMENT 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.
<PAGE>
THE FOLLOWING TABLE WAS PRESENTED AS A GRAPH IN THE PROSPECTUS:
- ---------------------------------------------------------------
COMPARISON OF THE CHANGE IN A $10,000 INVESTMENT IN THE WESTON PORTFOLIOS AND
THE STANDARD & POORS 500 INDEX AS OF OCTOBER 31, 1997
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended For the Years Ended
January 31, October 31,
----------------------------------------------------------------------------
1989 1989 1990 1991 1992 1993 1994 1995 1996 1997
Standard & Poors 500 Index $10,000 $12,032 $11,652 $15,169 $16,300 $17,925 $18,136 $24,928 $29,979 $37,530
New Century Capital Portfolio $10,000 $11,228 $10,693 $14,591 $14,670 $16,698 $16,708 $21,403 $24,515 $30,118
New Century I Portfolio $10,000 $11,109 $11,026 $13,554 $13,937 $16,100 $15,712 $19,304 $21,663 $25,095
</TABLE>
______________________________________________________________________________
AVERAGE ANNUAL RETURNS FOR THE PERIODS ENDED OCTOBER 31, 1997 *
1 Year 5 Year 10 Year
------ ------ -------
New Century Capital
Portfolio 27.22% 17.21% 13.30%
New Century I
Portfolio 19.64% 13.40% 10.98%
* Average annual return for the Portfolios assumes the reinvestment of all
dividends and distributions and the deduction of all fees and expenses
______________________________________________________________________________
Performance and data represent past performance. Investment return and
principal value of an investment in the Fund will fluctuate. Your shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
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" and "Investments in
Investment Companies and the Investment Company Industry".) 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
<PAGE>
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" and
"Investments in Investment Companies and the Investment Company Industry".)
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.
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The Portfolios may invest only in investment grade fixed income securities.
There are four categories which are referred to as investment grade. These are
the four highest ratings or categories as defined by Moody's Investors Service,
Inc. ("Moody's) and Standard and Poor's Corporation ("Standard & Poor's").
Categories below this have lower ratings and are considered more speculative in
nature. The following are bond ratings classified as investment grade by Moody's
and Standard and Poor's. Baa and BBB rated securities are considered to have
speculative characteristics.
Moody's Standard & Poor's
High Grade Aaa AAA
High Quality Aa AA
Upper Medium Grade AA A
Medium Grade Baa BBB
Ratings from "AA" to" B" may be modified by a plus or minus sign to show
relative standings within the categories.
The Advisor will attempt to monitor and respond to changing economic and market
conditions and if necessary reposition the portfolios' assets depending on the
trend analysis. Trends are analyzed by using a variety of technical and
fundamental indicators. Among the factors which are included in the analysis are
the direction of interest rates, economic growth, industry trends and various
moving averages. When the Advisor identifies an upward trend, the New Century
Capital Portfolio will seek to obtain growth over income while managing risk 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.)
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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 Income Income (Equity) Funds
Growth and Income 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
Municipal Bonds Municipal Bond Funds
Sector Funds Short Term Bond Funds
High Yield Bond Funds Intermediate Term Bond Funds
Income (Bond) Funds
The Portfolios will not invest in an investment company which charges a
contingent deferred sales load.
MONEY MARKET SECURITIES
Each portfolio may invest in money market securities, which include: marketable
securities issued or guaranteed as to principal and interest by the government
of the United States or by its agencies or instrumentalities; domestic bank
certificates of deposit; bankers' acceptances; prime commercial paper; and
repurchase agreements (secured by United States Treasury or agency obligations).
<PAGE>
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.
<PAGE>
(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.
SHARE PRICE
The net asset value of a Portfolio share is determined as of 5 p.m. Eastern time
on each day the New York Stock Exchange is open for unrestricted trading from
Monday through Friday. The net asset value is determined by dividing the value
of the Portfolio's securities, plus any cash and other assets, less all
liabilities, by the number of shares outstanding. Expenses and fees of the
Portfolio, including the advisory and the distributor fees, are accrued daily
and taken into account for the purpose of determining 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
<PAGE>
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.
DIVIDENDS, CAPITAL GAINS 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 and,
(2) realization of 90% of annual gross income from dividends, interest,
gains from sales of securities, or other "qualifying income,".
"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
<PAGE>
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 during the period beginning 45 days
before each dividend date and ending 90 days thereafter 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.
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, Suite 330, Wellesley, Massachusetts
02181-4102, 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.
These fees are higher than the investment advisory fees paid by most other
mutual funds. The Advisor currently provides investment advisory services for
approximately $280 million of assets of individuals, trusts and estates. Weston
has provided discretionary investment advisory services relating to investments
in mutual funds since 1981.
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, 1997, the Advisor received $703,591
(1% of average net assets) for the New Century Capital Portfolio and
$455,053 (1% of average net assets) for the New Century I 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
<PAGE>
served in various management positions with the Advisor since 1986 and is
President of the Trust. 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 Corporation, (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, Suite 330, Wellesley, Massachusetts 02181-4102.
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.
<PAGE>
The SEC is currently reviewing Rule 12b-1, plans adopted under 12b-1, and the
implementation of such plans. If the SEC adopts any new rules or regulations,
the 12b-1 Trustees may require or approve changes in the implementation or
operation of the Plans and may also require the total expenditures by each
Portfolio under its Plan be kept within limits lower than the maximum amount
permitted by the Plan as stated above.
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.
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., King of Prussia, Pennsylvania to serve
as its transfer agent, dividend disbursing agent, and as redemption agent for
redemptions.
BUYING SHARES
Shares of each Portfolio are distributed by Weston Securities Corporation (the
Distributor), and by selected dealers. Purchases are made at the net asset value
per share next computed after receipt of an order by the Portfolio's Transfer
Agent, FPS Services, Inc. (the "Transfer Agent").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
or charge assessed on the New Century Capital Portfolio or the New Century I
Portfolio. 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.
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.
3200 Horizon Drive
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: (781) 239-0445.
<PAGE>
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.
REDEEMING SHARES
Shareholders may redeem their shares of the Portfolios without charge on any day
on which the Portfolios calculate their net asset values (see "Share Price").
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. 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.
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.
<PAGE>
Shares may be redeemed by calling Weston at (781) 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.
EXCHANGING SHARES
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 at (781) 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.
TYPES OF ACCOUNTS - SPECIAL PLANS
Each Portfolio also offers its shares for use in certain Tax Sheltered
accounts, including IRA, Roth IRA, Keogh, 401(k) and 403(b)(7) plans.
In addition, each Portfolio offers Systematic Withdrawal Plans and Automatic
Investment Programs. Information on these types of accounts is available
from the Portfolios' Distributor or by reviewing the Statement of Additional
Information.
<PAGE>
GLOSSARY
Description of various securities invested in, and investment techniques
employed by, mutual funds in which Weston may invest.
ILLIQUID AND RESTRICTED SECURITIES. An underlying fund may invest not more than
10% of its net assets in securities for which there is no readily available
market ("illiquid securities") which would include securities the disposition of
which would be subject to legal restrictions (so-called "restricted securities")
and repurchase agreements having more than seven days to maturity. A
considerable period of time may elapse between an underlying fund's decision to
dispose of such securities and the time when the fund is able to dispose of
them, during which time the value of the securities (and therefore the value of
the underlying fund's shares held by a Portfolio) could decline.
FOREIGN SECURITIES. An underlying fund may invest up to 100% of its assets in
securities of foreign issuers. There may be less publicly available information
about these issuers than is available about companies in the U.S. and
foreign auditing requirements may not be comparable to domestic issuers.
Foreign securities are subject to heighted 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
<PAGE>
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 U.S.
Government securities equal to the difference between (a) the market value of
the securities sold short at the time they were sold short and (b) the value of
the collateral deposited with the broker in connection with the short sale (not
including the proceeds from the short sale). While the short position is open,
the fund must maintain daily the segregated account at such a level that (1) the
amount deposited in it plus the amount deposited with the broker as collateral
equals the current market value of the securities sold short and (2) the amount
deposited in it plus the amount deposited with the broker as collateral is not
less than the market value of the securities at the time they were sold short.
Depending upon market conditions, up to 80% of the value of a fund's net assets
may be deposited as collateral for the obligation to replace securities borrowed
to effect short sales and allocated to a segregated account in connection with
short sales.
The fund will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the fund replaced the borrowed security. The fund will realize a gain
if the security declines in price between those dates. The amount of any gain
will be decreased and the amount of any loss increased by the amount of any
premium, dividend or interest the fund may be required to pay in connection with
a short sale.
A short sale is "against the box" if at all times when the short
position is open the fund owns an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for, securities
of the same issue as the securities sold short.
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).
<PAGE>
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.
<PAGE>
There are several risks in connection with the use of futures contracts. In the
event of an imperfect correlation between the futures contract and the portfolio
position which is intended to be protected, the desired protection may not be
obtained and the fund may be exposed to risk of loss. Further, unanticipated
changes in interest rates or stock price movements may result in a poorer
overall performance for the fund than if it had not entered into any futures on
debt securities or stock index.
In addition, the market prices of futures contracts may be effected by
certain factors. First, all participants in the futures market are
subject to margin deposit and maintenance requirements. Rather than
meeting additional margin deposit requirements, investors 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.
<PAGE>
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.
<PAGE>
INVESTMENT ADVISOR
Weston Financial Group, Inc.
20 William Street, Suite 330
Wellesley, MA 02181-4102
DISTRIBUTOR
Weston Securities Corporation
20 William Street, Suite 330
Wellesley, MA 02181-4102
CUSTODIAN
The Bank of New York
90 Washington Street, 22nd Floor
New York, New York 10286-0001
TRANSFER AGENT
FPS Services, Inc.
3200 Horizon Drive
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
Briggs Bunting & Dougherty, LLP
Two Logan Square, Suite 2121
Philadelphia, PA 19103-4901
<PAGE>
WESTON PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
Dated February 28, 1998
20 William Street, Suite 330, Wellesley, Massachusetts 02181-4102
The Distributor may be telephoned at (781) 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, 1998. Retain this
statement of additional information for future reference.
<PAGE>
WESTON PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 28, 1998
TABLE OF CONTENTS
The Fund's Investments Page
----
Rising Trend Strategy 3
Declining Trend Strategy 3
Other Factors 3
Investment Company Securities 3
Money Market Securities 4
Portfolio Turnover 5
Investment Restrictions 5
Investment Advisor 6
Distributor 6
Allocation Of Portfolio Brokerage 6
Transfer Agent 7
Purchase Of Shares 7
Tax-Sheltered Retirement Plan 7
Systematic Withdrawal Plan 8
Officers And Trustees Of Weston 9
General Information 10
Audits and Reports 10
Custodian 10
Performance 10
Comparisons and Advertisements 11
Financial Statements 21
<PAGE>
WESTON PORTFOLIOS INVESTMENTS
Each Portfolio seeks to achieve its objective by concentrating in shares of
investment companies and by making other investments selected in accordance with
the Portfolio's investment restrictions and policies. Each Portfolio will vary
its investment strategy as described in the Portfolios' prospectus to seek to
achieve its objective. This Statement of Additional Information contains further
information concerning the techniques and operations of each Portfolio, the
securities in which it will invest, and the policies it will follow.
RISING TREND STRATEGY
During periods when the Portfolios' investment advisor Weston Financial Group,
Inc. (the "Advisor") determines that there is a rising trend in the securities
markets, it will seek to achieve the Portfolios' investment objective by
concentrating in a portfolio of shares of investment companies which the advisor
believes will benefit from such a trend. The Advisor will use a risk adjusted
analysis (which considers the relative volatility of its various investments) to
evaluate the investment companies' performance under various market conditions
and to consider the potential reward and potential risk. The Advisor will not
select such investment companies based solely upon their previous performance.
(See "Investments in Investment Companies and the Investment Company Industry"
in the prospectus.) In order to make allowance for cash flow needs of each
Portfolio or when a Portfolio is otherwise pursuing appreciation, a Portfolio
may also invest up to 75% of its asset value in other investment vehicles such
as common or preferred stocks of companies which are not investment companies,
investment companies which are money market funds, cash equivalents, or may hold
its assets as cash. Though not required by its policies to do so, Weston may
make such investments, if necessary, to qualify as a "regulated investment
company" under the Internal Revenue Code (the "IRC"). (See "Dividends,
Distributions and Taxes" in the prospectus for a discussion of qualification
under sub chapter M of the IRC.)
DECLINING TREND STRATEGY
The primary emphasis of the New Century Capital Portfolio is on capital growth
over income and for the New Century I Portfolio is on income over growth.
Nevertheless, when the Advisor determines that there is a generally declining
trend in the securities markets, it may seek to reduce risk by investing some or
all of either Portfolio in investments, including investment company securities,
which are believed by the manager to present a lower degree of risk. During such
periods, the 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.
<PAGE>
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 100% of the market value of the Portfolio's net assets
would be invested in such repurchase agreements together with any other illiquid
assets.
<PAGE>
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.
<PAGE>
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,
1997, 1996 and 1995, the Advisor received fees related to its management of the
New Century Capital Portfolio and the New Century I Portfolio of $703,591 and
$455,053; $571,221 and $355,005; and $416,611 and $260,474, respectively. For
the fiscal years ended October 31, 1997, 1996 and 1995, the Advisor received
fees related to administrative services provided to the New Century Capital
Portfolio and the New Century I Portfolio of $58,965 and $27,593; $72,631 and
$47,840; and $65,275 and $40,742, 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 (Chairman 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") bears on behalf of each Portfolio, the
expenses of printing all sales literature, including prospectuses. 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, 1997, 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 Capital
Portfolio, $94,429; the New Century I Portfolio, $82,481. 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.
<PAGE>
For the fiscal year ending October 31, 1997 the Distributor received sales
commissions and other compensation of $77,284 and $31,283 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.
<PAGE>
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, The Bank of New York 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.
<PAGE>
OFFICERS AND TRUSTEES OF WESTON
<TABLE>
<S> <C> <C> <C>
Position and Principal Occupation
Name and Address Age Office with Trust During the past Five Years
- ---------------- ------------- ----------------- --------------------------
*Douglas A. Biggar 51 Chairman and Executive Vice President and Clerk,
20 William Street, Suite 330 Trustee Weston Financial Group, Inc.;
Wellesley, MA 02181 Clerk and Treasurer of Weston Securities
Corporation.
*Joseph Robbat, Jr. 47 Trustee Chief Executive Officer and Treasurer,
20 William St., Suite 330 Weston Financial Group, Inc.
Wellesley, MA 02181
Stanley H. Cooper, Esq. 50 Trustee Attorney in private practice
One Ashford Lane
Andover, MA 01810
Roger Eastman, C.P.A. 67 Trustee Executive Vice President and Chief Operating
32 Meetinghouse Square Officer, Danvers Savings Bank; Formerly Partner,
Middleton, MA 01949 Arthur Andersen & Co.
Michael A. Diorio, C.P.A. 52 Trustee Partner, Diorio, Hudson & Pavento, P.C.
25 Birch St., Unit B-44
Milford, MA 01757
Wayne M. Grzecki 48 President Senior Counselor, Weston Financial Group, Inc.
20 William St., Suite 330
Wellesley, MA 02181
Ronald A. Sugameli 47 Vice President Senior Counselor, Weston Financial Group, Inc.
20 William St., Suite 330
Wellesley, MA 02181
Ellen M. Bruno 32 Treasurer Vice President, Weston Financial Group, Inc.;
20 William St., Suite 330 and Secretary Consultant, United Asset
Wellesley, MA 02181 Management Corporation.
Karl Steinbrecher 33 Assistant Treasurer Assistant Portfolio Manager, Weston Financial
20 William St., Suite 330 Group, Inc.
Wellesley, MA 02181
Clara Prokup 51 Assistant Secretary Comptroller, Weston Financial Group, Inc.
20 William St., Suite 330
Wellesley, MA 02181
</TABLE>
*Interested trustee as defined in the Investment Company Act of 1940
(the "1940 Act")
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.
<PAGE>
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, 1997.
<TABLE>
<S> <C> <C> <C> <C>
(1) (2) (3) (4) (5)
Name of Person, Aggregate Compensation From Pension or Retirement Estimated Annual Total
Position Registrant Benefits Accrued as Benefits Upon Compensation
Part of Trust Expenses Retirement
Stanley H. Cooper, Esquire
- - Trustee $3,000 $-0- $-0- $3,000
Roger Eastman, $3,000 $-0- $-0- $3,000
C.P.A. - Trustee
Michael A. Diorio, C.P.A.
- - Trustee $3,000 $-0- $-0- $3,000
</TABLE>
GENERAL INFORMATION
AUDITS AND REPORTS
The accounts of the Trust are audited each year by Briggs Bunting & Dougherty,
LLP, 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
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 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>
<S> <C> <C> <C>
Fund Name 1 Year 5 Years From Fund's Inception(1/31/89)
- --------- ------ ------- ------------------------------
New Century I Portfolio 27.22% 17.21% 13.30%
New Century Capital Portfolio 19.64% 13.40% 10.98%
</TABLE>
<PAGE>
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:
Lehman 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.
<PAGE>
INVESTMENT ADVISOR
Weston Financial Group, Inc.
20 William Street, Suite 330
Wellesley, MA 02181-4102
DISTRIBUTOR
Weston Securities Corporation
20 William Street, Suite 330
Wellesley, MA 02181-4102
CUSTODIAN
The Bank of New York
90 Washington Street, 22nd Floor
New York, New York 10286-0001
TRANSFER AGENT
FPS Services, Inc.
3200 Horizon Drive
P.O. Box 61503
King of Prussia, PA 19406-7098
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Briggs Bunting & Dougherty, LLP
Two Logan Square, Suite 2121
Philadelphia, PA 19103-4901
<PAGE>
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)*
<PAGE>
(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) Reorganization opinion and consent of counsel.
(Filed with Post-effective amendment No. 3)*
<PAGE>
(11) (a) The consent of Tait, Weller & Baker,
Independent Certified Public Accountants.
(b) The consent of Briggs Bunting & Dougherty, LLP
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, 1998, is as follows:
(1) (2)
Title of Class Number of Record Holders
Common stock $.01 par value:
New Century Capital Portfolio 734
New Century I Portfolio 325
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:
<PAGE>
(i) by the Board of Trustees by a majority vote of a
quorum which consists of the trustees who are neither
"interested persons" of the company as defined in
Section 2(a)(19) of the 1940 Act, nor parties to the
proceedings, or,
(ii) if the required quorum is not obtainable or if a
quorum of such trustees so directs, by independent
legal counsel in a written opinion. No
indemnification will be provided by the company to
any trustee or officer of the company for any
liability to the company or shareholders to which he
would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless
disregard of duty.
As permitted by Article 11.2 (a)(v)of the Declaration of Trust, reasonable
expenses incurred by a trustee who is a party to a proceeding may be paid by
the Trust in advance of the final disposition of the action, after
authorization in the manner described above and upon receipt by the trust of
a written undertaking by the trustee or officer to repay the amount if it is
ultimately determined that he is not entitled to be indemnified by the Trust.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee,
officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
The principal business of Weston Financial Group, Inc. is to provide
investment counsel and advice to individual and institutional
investors.
Item 29. PRINCIPAL UNDERWRITERS.
(a) Weston Securities Corp., the only principal
underwriter of the Registrant, does not act as
principal underwriter, depositor or investment
advisor to any other investment company.
(b) Herewith is the information required by the following
table with respect to each trustee, officer or
partner of the only underwriter named in answer to
Item 21 of Part B:
Position and Position and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
I.Richard Horowitz President None
20 William St.,
Suite 330
Wellesley, MA 02181
Douglas A. Biggar Clerk and Chairman
20 William St., Treasurer and Trustee
Suite 330
Wellesley, MA 02181
(c) Not applicable.
<PAGE>
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,
Suite 330, Wellesley, Massachusetts 02181-4102, FPS Services,
Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania 19406-0903
or The Bank of New York, 90 Washington Street, 22nd Floor,
New York, New York 10286-0001.
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.
<PAGE>
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 27th day of February, 1998.
WESTON PORTFOLIOS
Registrant
By: /s/ Wayne M. Grzecki
Wayne M. Grzecki
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.
/s/ Douglas A. Biggar Chairman, Principal February 27, 1998
Douglas A. Biggar Executive Officer and
Trustee
/s/ Joseph Robbat, Jr. Trustee February 27, 1998
Joseph Robbat, Jr.
/s/ Wayne M. Grzecki President February 27, 1998
Wayne M. Grzecki
/s/ Stanley H. Cooper Trustee February 27, 1998
Stanley H. Cooper
/s/ Michael A. Diorio Trustee February 27, 1998
Michael A. Diorio
/s/ Roger Eastman Trustee February 27, 1998
Roger Eastman
/s/ Ellen M. Bruno Treasurer, Secretary February 27, 1998
Ellen M. Bruno Principal Financial
and Accounting Officer
<PAGE>
EXHIBIT INDEX
Item 24:
(b) (11) (a) Consent of Independent Auditors
(b) Consent of Independent Auditors
(b) (16) Schedule of Computation of Performance Quotations
(b) (17) Financial Data Schedules
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm in the Registration Statement,
(Form N-1-A), and related Statement of Additional Information of Weston
Portfolios and the inclusion of our report dated November 22, 1996 to the
Shareholders and Board Trustees of Weston Portfolios.
/s/ Tait, Weller & Baker
Tait, Weller & Baker
Philadelphia, Pennsylvania
February 27, 1998
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated December 4, 1997, accompanying the
October 31, 1997 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. 14 to this
Registration Statement and Prospectus. We consent to the use of the
aforementioned report in the Registration Statement and Prospectus.
/s/ Briggs, Bunting & Dougherty, LLP
Briggs, Bunting & Dougherty, LLP
Philadelphia, Pennsylvania
February 27, 1998
<PAGE>
EXHIBIT 16
WESTON PORTFOLIOS
New Century Capital Portfolio;
New Century I Portfolio
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
1. Standard Total Return (Average Annual Total Return)
n
P (1 + T) = ERV
From Inception to 10/31/97
NEW CENTURY CAPITAL
P = $ 1,000
T = 13.30 %
n = 8.75
ERV = $ 2,892.03
NEW CENTURY I
P = $ 1,000
T = 10.98 %
n = 8.75
ERV = $ 2,488.23
<PAGE>
ANNUAL REPORT
YEAR ENDED OCTOBER 31, 1997
<PAGE>
WESTON PORTFOLIOS
CONTENTS
- ------------------------------------------------------------------------------
MANAGER'S MESSAGE 1
NEW CENTURY CAPITAL PORTFOLIO
Portfolio of Investments
October 31, 1997 2
Statement of Assets and Liabilities
October 31, 1997 4
Statement of Operations
Year ended October 31, 1997 5
Statement of Changes in Net Assets
Years ended October 31, 1997 and 1996 6
Financial Highlights
Five years in the period ended October 31, 1997 7
NEW CENTURY I PORTFOLIO
Portfolio of Investments
October 31, 1997 8
Statement of Assets and Liabilities
October 31, 1997 10
Statement of Operations
Year ended October 31, 1997 11
Statement of Changes in Net Assets
Years ended October 31, 1997 and 1996 12
Financial Highlights
Five years in the period ended October 31, 1997 13
NEW CENTURY CAPITAL AND I PORTFOLIOS
Notes to Financial Statements 14
Report of Independent Certified Public Accountants 17
- ------------------------------------------------------------------------------
<PAGE>
MANAGER'S MESSAGE
Dear Fellow Shareholders:
I am proud to present our Eighth Annual Report.
During the ten-month period ended October 31, 1997, the U.S. economy continued
to enjoy healthy corporate earnings and relatively low inflation. During this
period, we witnessed a number of events that threatened to derail the financial
markets. In March, the Federal Reserve Board raised interest rates to slow an
overheating economy. In July, inflation fears, softening corporate earnings,
and a weakening dollar triggered a rotation to small and mid-cap companies from
the large-cap companies. In the final weeks of October, the economic crisis in
Southeast Asia sent a shock wave through the financial markets. The U.S.
equity markets, as measured by the Dow Jones Industrial Average, plunged 554
points in a single day -- only to bounce back more than 337 points on the
next day.
I am pleased to report that during this period, each Portfolio's disciplined
investment methodology -- which is based upon sector allocation, short-term
performance criteria, and diversification -- reduced investment volatility and
produced a level of investment return consistent with the Portfolio's investment
objective. For the ten-month period ended October 31, 1997, the New Century
Capital Portfolio produced a return of 22.86%; and, the New Century I Portfolio
produced a return of 15.84%. During this period, the Standard & Poor's 500
posted an increase of 25.19%. The three-year Beta was 0.89 for the Capital
Portfolio and 0.61 for the I Portfolio. (Beta measures the risk of a fund
relative to the variability of an index, in this case, the Standard & Poor's
500. A fund with a Beta less than 1.0 would be expected to fall less than the
index during a declining market and to rise less than the index during a rising
market.)
Through July, sector allocation led us to focus our equity investments in the
larger capitalized companies by concentrating in the growth and the growth and
income sectors. In July, we shifted capital into the small and mid-cap
sectors. Most recently, we shifted back to the large-cap sector in response to
the foreign financial crisis. Throughout the period, we minimized our
participation in the foreign sector.
As we look forward to the next six months, our investment goal is to balance
each Portfolio's investment allocation among the strongest sectors and to
diversify our investments within each sector among the mutual funds that provide
superior risk-adjusted performance.
We are confident that our investment methodology will continue to provide a
risk-adjusted performance consistent with each Portfolio's objectives.
Sincerely,
Wayne M. Grzecki
Portfolio Manager
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED 10/31/97
1 Year 5 Years Since Inception (1/31/89)
------ ------- ------------------------
New Century
Capital 27.22% 17.21% 13.30%
New Century I 19.64% 13.40% 10.98%
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1997
- ------------------------------------------------------------------------------
Issuer Shares Value
INVESTMENT COMPANIES - 99.8%
AGGRESSIVE FUNDS - 5.3%
Jaus Olympus 73,330 $ 1,350,004
Oppenheimer Capital 70,986 2,779,824
--------------
4,129,828
GROWTH AND INCOME FUNDS - 27.7%
Goldman Sachs Growth & Income 155,643 4,382,919
MFS Massachusetts 208,288 3,680,453
SEI Index S&P 500 Index 89,754 2,604,664
Selected American 85,590 2,371,710
T. Rowe Price Dividend 44,242 866,693
Vanguard Index 500 90,887 7,787,229
--------------
21,693,668
GROWTH FUNDS - 41.5%
Davis NY Venture 293,399 6,630,824
Janus 108,582 3,187,956
Legg Mason Value 111,263 4,893,353
Longleaf Partners 535 15,427
MFS Research 297,807 6,414,760
Neuberger & Berman Partners 66,176 2,100,441
Scudder Value 123,767 2,828,076
Sound Shore 57,215 1,635,786
Vanguard Index Growth 103,572 2,220,593
Vanguard PrimeCap 64,444 2,638,979
--------------
32,566,195
SMALL COMPANY FUNDS - 22.3%
Eclipse Equity 198,320 3,464,648
Mutual Discovery Z 604 12,238
Neuberger & Berman Genesis 337,754 5,623,605
Nicholas II 80,696 3,260,938
Oakmark Small Cap 112,743 2,215,406
State St Research Aurora 144,749 2,931,164
--------------
17,507,999
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
October 31, 1997
Issuer Shares Value
FOREIGN STOCK FUNDS - 3.0%
BT Investment International Equity 85,116 1,745,729
Vanguard International Growth 34,812 600,152
--------------
2,345,881
Total investment
companies (Cost $65,488,209) 99.8% 78,243,571
Cash and other assets in
excess of liabilities 0.2% 147,760
-------- ----------------
Net assets 100.0% $ 78,391,331
====== ================
Cost for federal income tax at October 31, 1997 was $65,488,209 and net
unrealized appreciation consisted of:
Gross unrealized appreciation $ 12,808,986
Gross unrealized depreciation (53,624)
--------------
Net unrealized appreciation $ 12,755,362
==============
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1997
- ------------------------------------------------------------------------------
ASSETS
Investments, at value (Cost $65,488,209)
(Note 1A) $ 78,243,571
Cash 290,219
Subscriptions receivable 1,424
--------------
Total assets 78,535,214
LIABILITIES
Payable for
Investment advisory fee 69,202
Administrative fee 5,557
Accrued expenses 69,124
-------------
TOTAL LIABILITIES 143,883
NET ASSETS
(applicable to $5,345,265 outstanding
shares; unlimited number of shares
of beneficial interest authorized,
$.01 par value.) $ 78,391,331
=================
Net asset value, offering price
and redemption price per share
($78,391,331/5,345,265 shares of
beneficial interest outstanding) $14.67
======
NET ASSETS CONSIST OF:
Undistributed net realized gain on investments $ 6,754,947
Unrealized appreciation of investments 12,755,362
Paid-in capital 58,881,022
--------------
TOTAL NET ASSETS $ 78,391,331
==============
- -----------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1997
- ------------------------------------------------------------------------------
NET INVESTMENT LOSS
Income
Interest $ 4,251
Dividends 470,291
--------------
TOTAL INVESTMENT INCOME 474,542
Expenses
Distribution costs (Note 3) 94,429
Investment advisory fees (Note 2) 703,591
Transfer agent fees 28,925
Legal and audit fees 28,493
Custody and accounting fees 66,908
Registration and filing fees 9,913
Administration fee (Note 2) 58,965
Trustees' fees 10,520
Other 7,240
-----------
TOTAL EXPENSES 1,008,984
NET INVESTMENT LOSS (534,442)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 3,495,771
Capital gain distributions from
regulated investment companies 4,265,671
Net unrealized appreciation of
investments during the year 9,418,790
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 17,180,232
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 16,645,790
=================
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Years ended October 31, 1997
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
1997 1996
---- ----
OPERATIONS
Net investment loss $ (534,442) $ (395,054)
Net realized gain on investments 3,495,771 6,130,110
Capital gain distributions from regulated
investment companies 4,265,671 3,377,702
Net unrealized appreciation (depreciation)
of investments 9,418,790 (1,346,839)
-------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 16,645,790 7,765,919
DISTRIBUTIONS TO SHAREHOLDERS
Realized gains on investments
($2.03 and $1.42 per share,
respectively) (9,266,183) (5,424,859)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital
share transactions (a) 8,270,367 9,511,648
--------------- ------------------
TOTAL INCREASE IN NET ASSETS 15,649,974 11,852,708
NET ASSETS
Beginning of period 62,741,357 50,888,649
-------------- --------------
END OF PERIOD $ 78,391,331 $ 62,741,357
============== ==============
(a) Summary of capital share transactions is as follows:
<TABLE>
<S> <C> <C>
1997 1996
--------------------------------------------- --------------------------------
Shares Value Shares Value
Shares sold 426,511 $ 5,744,452 806,181 $ 10,480,616
Shares issued on
reinvestment of distributions 757,190 8,965,128 422,545 5,180,407
---------- ------------ ------------- ------------------
1,183,701 14,709,580 1,228,726 15,661,023
Shares redeemed (481,607) (6,439,213) (465,251) (6,149,375)
----------- --------------- ----------- --------------
NET INCREASE 702,094 $ 8,270,367 763,475 $ 9,511,648
========== ============= ============= ==================
</TABLE>
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
(For a Share Outstanding Throughout each Period)
Years ended October 31
<TABLE>
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
-------- --------- ------- ------- ----
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $13.51 $13.12 $12.31 $12.74 $12.15
------ ------- -------- ---------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment loss (0.10) (0.09) (0.06) (0.08) (0.07)
Net gain on securities
(both realized and unrealized) 3.29 1.90 2.16 0.64 2.39
-------- -------- -------- -------- ----------
TOTAL FROM INVESTMENT OPERATIONS 3.19 1.81 2.10 0.56 2.32
---- ------ -------- --------- ----------
LESS DISTRIBUTIONS
Distributions from capital gains (2.03) (1.42) (1.29) (0.99) (1.73)
-------- -------- -------- -------- -------------
NET ASSET VALUE, END OF PERIOD $14.67 $13.51 $13.12 $12.31 $12.74
====== ======= ======== ======== ==========
TOTAL RETURN 27.22% 14.91% 19.60% 4.70% 20.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 78,391 $ 62,741 $ 50,889 $ 37,968 $ 39,001
Ratio of expenses to
average net assets 1.43 % 1.47 % 1.61 % 1.60 % 1.54%
Ratio of net investment loss to
average net assets -0.76 % -0.69 % -0.52 % -0.68 % -0.53%
Portfolio turnover 93 % 214 % 206 % 107 % 133%
</TABLE>
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY I PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1997
- ------------------------------------------------------------------------------
Issuer Shares Value
INVESTMENT COMPANIES - 100.0%
EQUITY INCOME FUNDS - 1.7%
Portico Growth & Income 21,236 $ 834,155
--------------
GROWTH AND INCOME FUNDS - 25.7%
Goldman Sachs Growth & Income 55,847 1,572,650
Lexington Corporate Leaders 96,678 1,518,809
Lexington Growth & Income 88,897 2,040,192
MFS Massachusetts Inv A 135,854 2,400,538
Mutual Shares Z 589 13,237
SEI Index S&P 500 Index E 50,075 1,453,164
Vanguard Index 500 41,687 3,571,753
--------------
12,570,343
GROWTH FUNDS - 19.0%
Davis NY Venture 83,668 1,890,897
Legg Mason Value 35,165 1,546,557
Longleaf Partners 534 15,414
MFS Research A 75,470 1,625,618
Scudder Value 51,573 1,178,443
Sound Shore 35,012 1,001,006
Vanguard Index Growth 33,874 726,249
Vanguard PrimeCap 31,434 1,287,209
--------------
9,271,393
SMALL COMPANY FUNDS - 11.7%
Eclipse Equity 118,404 2,068,517
Baron Asset 10,335 479,249
Neuberger & Berman Genesis 163,841 2,727,955
Nicholas II 11,022 445,397
--------------
5,721,118
CONVERTIBLE SECURITY FUNDS - 3.6%
MainStay Convertible A 358 5,424
Pacific Horizon Capital 68,474 1,309,216
SBSF Convertible Securities 29,585 422,772
--------------
1,737,412
GENERAL CORPORATE BOND FUNDS - 3.6%
Strong Corporate Bonds 158,161 1,752,419
--------------
- -----------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY I PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
October 31, 1997
- ------------------------------------------------------------------------------
Issuer Shares Value
Government Treasury Bond Funds - 3.7%
American Century - Benham Target 2005 4,735 313,163
Federated U.S. Government 14,204 147,864
Vanguard F/I Intermediate 129,073 1,372,046
--------------
1,833,073
HIGH QUALITY BOND FUNDS - 4.5%
Dodge & Cox Income 93,968 1,133,252
Scudder Income 78,521 1,056,102
--------------
2,189,354
HIGH YIELD BOND FUNDS - 14.9%
MainStay High Yield 323,630 2,792,929
Nicholas Income 310,238 1,141,674
Northeast Investors 283,243 3,325,273
--------------
7,259,876
FOREIGN STOCK FUNDS - 2.8%
BT Investment International Equity 51,819 1,062,800
Vanguard International Growth 18,524 319,351
--------------
1,382,151
WORLDWIDE BOND FUNDS - 8.8%
Capital World Bond 20,143 331,748
PIMCO Foreign Bond Inst 192,422 2,056,993
PIMCO Global Bond Inst 191,856 1,924,315
--------------
4,313,056
Total investment companies
(Cost $42,922,855) 100.0% 48,864,350
Cash and other assets in
excess of liabilities 0.0% 28,878
-------- --------------
Net assets 100.0% $ 48,893,228
====== ==============
Cost for federal income tax at October 31, 1997 was $42,922,855 and net
unrealized appreciation consisted of:
Gross unrealized appreciation $ 5,973,160
Gross unrealized depreciation (31,665)
-------------
Net unrealized appreciation $ 5,941,495
=============
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY I PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1997
- ------------------------------------------------------------------------------
ASSETS
Investments, at value (Cost $42,922,855)
(Note 1A) $ 48,864,350
Cash 37,806
Receivables for
Capital stock sold 31,525
Dividends and interest 30,126
---------------
TOTAL ASSETS 48,963,807
LIABILITIES
Payable for
Investment advisory fee 42,665
Administrative fee 3,463
Accrued expenses and other payables 24,451
---------------
TOTAL LIABILITIES 70,579
NET ASSETS
(applicable to $3,694,503 outstanding
shares; unlimited number of shares
of beneficial interest authorized,
$.01 par value.) $ 48,893,228
=================
Net asset value, offering price
and redemption price per share
($48,893,228/3,694,503 shares of
beneficial interest outstanding) $13.23
======
NET ASSETS CONSIST OF:
Undistributed net realized gain on investments $ 3,270,515
Unrealized appreciation of investments 5,941,495
Paid-in capital 39,681,218
--------------
Total net assets $ 48,893,228
==============
- -------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY I PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1997
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 803
Dividends 1,360,864
-------------
Total investment income 1,361,667
Expenses
Distribution costs (Note 3) 82,481
Investment advisory fees (Note 2) 455,053
Transfer agent fees 18,891
Legal and audit fees 10,456
Custody and accounting fees 36,709
Registration and filing fees 4,381
Administration fee (Note 2) 27,593
Trustees' fees 4,912
Other 2,684
-----------
Total expenses 643,160
Net investment income 718,507
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 999,388
Capital gain distributions from
regulated investment companies 2,526,932
Net unrealized appreciation of
investments during the year 3,903,156
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 7,429,476
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,147,983
================
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
NEW CENTURY I PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Years ended October 31, 1997
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
1997 1996
---- ----
OPERATIONS
Net investment income $ 718,507 $ 513,181
Net realized gain (loss) on investments 999,388 1,884,467
Capital gain distributions from regulated
investment companies 2,526,932 1,421,812
Net unrealized appreciation of investments 3,903,156 512,083
-------------- ---------------
Net increase in net assets resulting
from operations 8,147,983 4,331,543
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income
($0.21 and $0.18 per share, respectively) (718,507) (513,181)
Realized gains on investments
($0.99 and $0.91 per share, respectively) (3,340,142) (2,343,186)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital share
transactions (a) 4,381,059 8,823,285
--------------- -----------------
TOTAL INCREASE IN NET ASSETS 8,470,393 10,298,461
NET ASSETS
Beginning of period 40,422,835 30,124,374
-------------- --------------
End of period $ 48,893,228 $ 40,422,835
============== ==============
(a) Summary of capital share transactions is as follows:
<TABLE>
<S> <C> <C>
1997 1996
------------------------------------ ----------------------------------------
Shares Value Shares Value
Shares sold 446,249 $ 5,543,984 699,661 $ 8,169,881
Shares issued on
reinvestment of distributions 330,831 3,867,560 233,112 2,660,469
----------- ------------- ------------- ------------------
777,080 9,411,544 932,773 10,830,350
Shares redeemed (392,858) (5,030,485) (170,309) (2,007,065)
----------- ------------- ---------- --------------
Net increase 384,222 $ 4,381,059 762,464 $ 8,823,285
=========== ============== ============= ==================
</TABLE>
- ------------------------------------------------------------------------------
See notes to financial statements
NEW CENTURY I PORTFOLIO
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
(For a Share Outstanding Throughout each Period)
Years ended October 31, 1997
<TABLE>
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
-------- --------- ------- ------- ----
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.21 $ 11.82 $ 11.22 $ 11.94 $ 11.36
------ ------- -------- --------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.21 0.18 0.24 0.20 0.36
Net gain (loss) on securities
(both realized and unrealized) 2.01 1.30 1.28 (0.05) 1.61
-------- -------- -------- -------- ---------
TOTAL FROM INVESTMENT OPERATIONS 2.22 1.48 1.52 0.15 1.97
---- ------ -------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income (0.21) (0.18) (0.24) (0.19) (0.31)
Distributions from capital gains (0.99) (0.91) (0.68) (0.68) (1.08)
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.20) (1.09) (0.92) (0.87) (1.39)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $13.23 $ 12.21 $ 11.82 $ 11.22 $ 11.94
====== ======= ======== ======== =========
TOTAL RETURN 19.64 % 13.24 % 14.93 % 1.26 % 18.90 %
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 48,893 $ 40,423 $ 30,124 $ 23,803 $ 22,534
Ratio of expenses to
average net assets 1.41 % 1.61 % 1.72 % 1.73 % 1.93 %
Ratio of net investment loss to
average net assets 1.58 % 1.45 % 2.14 % 1.57 % 2.11%
Portfolio turnover 80 % 172 % 191 % 130 % 73%
</TABLE>
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
WESTON PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
October 31, 1997
- ------------------------------------------------------------------------------
(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.
- -------------------------------------------------------------------------------
<PAGE>
WESTON PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS - (Continued)
October 31, 1997
- ------------------------------------------------------------------------------
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, ADMINISTRATIVE 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, 1997, Weston Securities Corp. received
sales commissions and other compensation of $77,284 and $31,283 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.
- ------------------------------------------------------------------------------
<PAGE>
WESTON PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS - (Continued)
October 31, 1997
- -------------------------------------------------------------------------------
(4) INVESTMENT TRANSACTIONS
For the year ended October 31, 1997, the cost of purchases and the
proceeds from sales of securities other than short-term notes were as
follows:
Purchases Sales
New Century Capital Portfolio $67,240,112 $64,646,757
New Century I Portfolio $39,843,708 $36,024,890
<PAGE>
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, the New Century Capital Portfolio and the New
Century I Portfolio), including the portfolios of investments, as of October
31, 1997, and the related statements of operations and changes in net assets,
and the financial highlights for the year 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 audit.
The statements of changes in net assets for the year ended October 31, 1996
and the financial highlights for each of the four years in the period ended
October 31, 1996 were audited by other auditors whose report dated November
22, 1996, expressed an unqualified opinion on the statements and financial
highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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, 1997 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 audit provides 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, 1997, the results of its operations, the changes in
its net assets, and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles.
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
December 4, 1997
<PAGE>
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.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary information extracted from the
Registrant's Annual Report to Shareholders dated October 31, 1997 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 Portfolio
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<EXCHANGE-RATE> 1.00
<INVESTMENTS-AT-COST> 65,488,209
<INVESTMENTS-AT-VALUE> 78,243,571
<RECEIVABLES> 1,424
<ASSETS-OTHER> 290,219
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 78,535,214
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 143,883
<TOTAL-LIABILITIES> 143,883
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 58,881,022
<SHARES-COMMON-STOCK> 5,345,265
<SHARES-COMMON-PRIOR> 4,643,171
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,754,947
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,755,362
<NET-ASSETS> 78,391,331
<DIVIDEND-INCOME> 470,291
<INTEREST-INCOME> 4,251
<OTHER-INCOME> 0
<EXPENSES-NET> 1,008,984
<NET-INVESTMENT-INCOME> (534,442)
<REALIZED-GAINS-CURRENT> 7,761,442
<APPREC-INCREASE-CURRENT> 9,418,790
<NET-CHANGE-FROM-OPS> 16,645,790
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 9,266,183
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 426,511
<NUMBER-OF-SHARES-REDEEMED> 481,607
<SHARES-REINVESTED> 757,190
<NET-CHANGE-IN-ASSETS> 15,649,974
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 8,794,130
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 703,591
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,008,984
<AVERAGE-NET-ASSETS> 70,389,318
<PER-SHARE-NAV-BEGIN> 13.51
<PER-SHARE-NII> (.10)
<PER-SHARE-GAIN-APPREC> 3.29
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.67
<EXPENSE-RATIO> 1.43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</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, 1997 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 PORTFOLIO
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<EXCHANGE-RATE> 1.00
<INVESTMENTS-AT-COST> 42,922,855
<INVESTMENTS-AT-VALUE> 48,864,350
<RECEIVABLES> 61,651
<ASSETS-OTHER> 37,806
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 48,963,807
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 70,579
<TOTAL-LIABILITIES> 70,579
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,681,218
<SHARES-COMMON-STOCK> 3,694,503
<SHARES-COMMON-PRIOR> 3,310,281
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,270,515
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,941,495
<NET-ASSETS> 48,893,228
<DIVIDEND-INCOME> 1,360,864
<INTEREST-INCOME> 803
<OTHER-INCOME> 0
<EXPENSES-NET> 643,160
<NET-INVESTMENT-INCOME> 718,507
<REALIZED-GAINS-CURRENT> 3,526,320
<APPREC-INCREASE-CURRENT> 3,903,156
<NET-CHANGE-FROM-OPS> 8,147,983
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 718,507
<DISTRIBUTIONS-OF-GAINS> 3,340,142
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 446,249
<NUMBER-OF-SHARES-REDEEMED> 392,858
<SHARES-REINVESTED> 330,831
<NET-CHANGE-IN-ASSETS> 8,470,393
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,084,337
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 455,053
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 643,160
<AVERAGE-NET-ASSETS> 45,524,796
<PER-SHARE-NAV-BEGIN> 12.21
<PER-SHARE-NII> .21
<PER-SHARE-GAIN-APPREC> 2.01
<PER-SHARE-DIVIDEND> .21
<PER-SHARE-DISTRIBUTIONS> .99
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.23
<EXPENSE-RATIO> 1.41
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
